Financial Regrets and How Not to Repeat Them

As the saying goes… hind sight is always 20/20 vision. Unfortunately though, the only way to live life is to move forward and because this is reality, mistakes will always be made and some of them are really regrettable.

Just because you can accept that mistakes are a part of life doesn’t mean you shouldn’t examine them and strive to avoid making the same mistakes in the future. An experience that teaches you nothing is bound to recur, so unless you want to relive your past blunders it is best to highlight them now and find the lesson you were meant to learn.

Some of the past years most common financial errors are listed below to jumpstart the thinking process:

Allowing Credit Card Debt to Get Out-of-Control

Credit cards are an alluring threat to those who simply can’t handle the responsibility of paying them off on time. Millions of Americans have made the same mistake. In fact, Innovest Inc. (an investment management consultancy) estimates that credit card companies will write-off an estimated $96 billion in sour debt for 2009 compared to roughly $41 billion in 2008. These statistics show that credit cards are an alarming problem for many people. On an individual level, excessive credit card debt can destroy your credit rating and seriously delay achieving any other goal while you spin your wheels day and night just to keep up with the interest payments.

Life Lesson: Always look before you leap or you may end up falling into a hole much deeper than you anticipated.

Jumping into Buying a House

Many people rush into buying a house because they have a notion in their heads of what they should be doing at a certain age, or because they think that the price is right and they shouldn’t miss out on a golden opportunity or even because they think that real estate values always appreciate. As it happens there is only one real reason to buy a house and that is because you are financially stable and fully able to take on the commitment of a mortgage. If this one stipulation holds true, you will realize that age is not a reason to bind yourself to a huge debt, there will always be another gem worth buying and a gem you can’t afford is really not a gem at all and whatever happens to home prices won’t matter so much if you can comfortably afford the home you’re in.

Life Lesson: Never bite off more than you can chew, or you just might end up choking on it.

Not Planning for the Unexpected

Nobody expects you to be the financial Mac Gyver, but you should at the very least have some savings in case you need access to money in a hurry. The ideal situation is to have an emergency fund that is equivalent to approximately 3 to 6 months of your monthly salary. While you are in the process of building that up it is also good form to have an idea of little ways you can make extra money if the need ever arose. For instance, could you do odd jobs for neighbors or turn your hobby into a small business?

Life Lesson: “It wasn’t raining when Noah built the Ark.” Howard Ruff, author of the book “How to Prosper During the Coming Bad Years in the 21^st Century”.

You can only have two reactions to what you have just read. The first is a sense of pride that you have managed not to fall prey where others have stumbled badly. The second is a sense of sincere regret that you did.

To those who have reason to celebrate, by all means give yourselves a pat on the back, but remember that the journey is not over and in all likelihood you have quite a long way left to travel so stay alert and keep trying to learn as much as you can about your finances.

To those who wish they had done things differently, it pays to remember that sometimes it takes a hard knock to get you to a place where you really appreciate all that you have and hold tight to the lessons of yesterday, lest you repeat them.