One time I asked myself this question when I was about 26:
What would my bank account look like if I never ate out or drank alcohol in college?
Then the what if game started getting a little crazy.
What if I hadn’t consumed all the calories during those late-night bar crawls and college tailgates.
What if I had all the money from the clothes I bought during my lifetime that I never even liked.
And so the game went on and on.
Which led to me to where I am right this second. Writing an article about the dumb purchases I have made over my lifetime.
A large part of personal finance, in my opinion-fact, is self-discipline. However, getting to where financial discipline becomes second nature takes some work up.
Prior to diving into all the dumb purchases, I have made, and maybe you too, I think it is vital to point out the fact that in order prevent more frivolous spending it starts with daily consistency.
In on of my posts not so long ago, I asked whether we as people really need all the stuff. The cars, clothes, fancy technology, you name it.
Myself included, I am guilty of just about every dumb purchase you could ever make.
However, here is something I have eluded to a lot recently. The entire point of developing financial discipline, learning to delay gratification, and becoming frugal in certain areas is this:
Creating more options.
Options to help yourself. Options to help your future kids or current kids. Options to help family. Options to travel. Options on top of options.
By creating the daily discipline now… you can create more options later. Typically, having the option to say yes is better than always having to say no.
We wouldn’t have been able to pay off $57,000 in student loans in 2017 if we didn’t delay on some things – as well as stop making silly purchases.
So now that you know WHY it is important to keep the dumb purchases on the low, here is a list of a few dumb purchases I have made as an adult.
Be it the 2007 Honda Civic Si that cost $18,000 or the brand new 2014 GMC Sierra at $37,000, I have made some bad financial choices when it comes to vehicles.
Transportation to me is like being stuck in between a rock and a hard place.
I have had the worst luck with tires, alignments and hitting potholes. I think in my lifetime, I have had to replace at least 5 tires due to potholes (poor driving might be part of the problem).
None the less, while cars are a necessary evil, there are smart ways to buy … and not so smart ways.
For starters, never buy brand new. In 2014 I bought a brand new GMC Sierra – trading in my paid Honda Civic. With depreciation at over 20% per year, the money I threw away was pure insanity.
While I get some people may disagree with my stance on vehicles, my belief is if you can’t buy it cash you can’t afford it. Now I drive a Kia Rio 2013 and it was a one-time payment.
Do I miss my nice truck? Yes, sometimes. Does it make me less happy not having it? Not at all!
If you really need to buy a new-to-you vehicle, a general rule of thumb is no more then 25% of your annual net income. So if you make $40,000 stay at $10,000.
2. New Technology
Between iPhones, in-game purchases, and a busted website I have spent some money on technology. Some of the not so wise purchases include an iPhone 6, Candy Crush purchases, and a Wix Website.
The iPhone 6 cost me $700 when it was said and done and it was absolute crap. I had a paid for iPhone 5 with 64 gigs, and to get on a plan with my wife Sprint said they would take care of us.
One catch – hand over my paid-off iPhone 5 for the “New iPhone 6.” What they forgot to mention was that it only had 16 gigs on it and I would be leasing it.
I had no clue that leasing was a thing, prior to 2015 when I did all of this you bought a phone and every two years got a new one. Needless to say – dumb move – I should have just kept my iphone 5!
iPad In Game Purchases
Between Candy Crush and this silly shooting game I played back in 2012, I probably spent $50 on in game purchases.
Quite possibly the most wasted spending one could ever do. Never again will I fall for that!
Wix Website – $220
Yeah, so before Money Life Wax, there was MoneyLifeandTheWholeBallofWax dot com.
I know a mouthful right?
My original plan – create a personal finance blog, website, and everything else under the sun in one website. I had never heard of Bluehost or WordPress.
So I started a site with Wix, used the drag and drop features, and like that I had the domain that is way too long to type out again form above.
Long story short I wasted about $220 because I quickly realized my limitations with Wix. While it can be a beneficial platform for some, such as new business owners, for my goals it was just not the right platform.
I quickly switched to Bluehost and transferred my new domain, MoneyLifeWax.com over and since then I have been smooth sailing. Luckily, I did this all when I had about 14 blog posts, not 60+.
Wix would not even offer a prorated refund. So that was money I just had to eat. If you have ever considered starting a blog or any site for that matter, check out my exclusive link here to get going.
It is actually really simple and easy. You can also make some side hustle money from the comfort of your home!
3. Food, Food, Food.
I alluded to it earlier – but I have personally spent a pretty penny on eating out.
Recently, I read that the average millennial spends almost $2,700 annually eating out. The Forbes article went on to say that $2,700 makes up about 44% of food costs per year.
I bet I was higher at some points in my life… and I can only imagine if you include bar tabs.
While I personally love grabbing lunch with friends or taking Lauren to dinner dates, I realize there are smart ways to dine and not so smart ways.
The #1 strategy to curb food spending is just to be prepared and not buy out of hunger/impulse.
When you go out to eat, go with a plan and a purpose.
4. Random Stuff
I don’t want to even know how much random stuff I have bought over the last 10 years out of just sheer impulse.
Who is with me on this one?
The stuff I convince myself I really “need” at that moment is actually just that – stuff. It is stuff I don’t need or don’t really care about.
While over the years I have gotten better, it used to not always be the case.
Here is how I go about buying things these days:
- Will this matter in 4-5 years
- Do I have something already similar that still functions?
- Will it save me enough time in life to make it worth the purchase?
These three questions help me when it comes to buying new things.
E-commerce has made consumerism easier in my mind. In fact, Amazon has gained such a reputation for having better prices, people don’t even question their prices.
(I bought an accessory for my phone, it was $10 at target, but $14 on Amazon – case in point).
My point on dumb purchases!
Always check around before buying ANYTHING. At the end of the year saving $2-5 here and there can really add up.
We all make and will continue to make some dumb purchases. However, developing some awareness will help us avoid the dumb purchases that add up quickly!
While I need a car, a phone, and food – I don’t have to spend thousands more annually to get around, communicate and eat.
Not included on the list are my Home Depot & Costco trips that have completely tipped my budget in the past.
Having awareness, learning from prior mistakes and moving forward is key to making personal finance fun.
Q: What is 1 dumb purchase you have made?
Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $300,000 in student loans with his wife in less than five years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post, and many more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their newborn son, their chocolate lab named Morgan, working out, being outside, traveling, and helping others with their finances! In case you were wondering, Josh uses Personal Capital to track his net worth and his first investment account ever was an Acorns account 😎