10 Things I Have Done That You Should NEVER Ever Do

April 19, 2012

I recently read a blog post about the biggest money mistakes that people make. I was shocked to see that I had done almost all of them.

No, I take that back. I wasn’t shocked at all.

I wasn’t embarrassed either.

I was just pissed off.

I wonder how I could have been so ignorant. How did the high intelligence that I supposedly have (as was once evidenced by an IQ test) never enter into the equation when I was thinking about finances?

So I’ve been thinking, what stupid things  have I done that I wouldn’t want even my worst enemy to do?

1. Think of credit as free money.I really can’t believe how naive I was when I spent money on credit cards. I regularly thought “I’ll pay it off next month/when I make more money/when I get my tax return. And you know what, It NEVER happened. I always found something else to spend my money on.

2. Charge more on a credit card than can be paid off each month. When I first started using credit cards, it never occurred to me that I shouldn’t charge anything more than I could pay off each month. I can actually remember thinking, “If I could pay it off each month, what’s the point in using a credit card? Why not just use cash?” I really just didn’t get it.

3. Live without an Emergency Fund. I didn’t know what an emergency fund was until I first started looking into controlling my finances in 2003. Prior to that, I had thought of savings accounts but it was always saving for something. Something to buy. Stuff.

4. Go  to College via Student Loans  Yep I did. Not once but twice. When I went to school as an undergrad, I got a couple of small scholarships and a grant due to my parent’s income levels but the rest was funded by student loans and the mindset that “I can always pay it off when I have a real job.” I have since gone back to school, again thanks to student loans. My situation is a very rare one and I don’t think it was necessarily the right choice for most to take but I did it to get out of my mom’s house and back on my own.

5. Go on a trip/buy a car/furnish your apartment with money from student loans.  I can’t say that I have done this with my student loans specifically. But I did take the maximum in student loans so that I could have extra money along the way. I remember people in school saying “I’m taking an extra loan out so I can go to South Padre (or Daytona or Mexico, take your pick).”

6. Cash in your retirement for a life event.  Yep I did this too! I cashed in my first retirement plan when I chose to stay home with my first child in 2003. It wasn’t a lot of money after the penalties and we didn’t use it for anything smart, I’m sure. But if I had kept it in there, it would probably be $15,000 by now and that is $15,000 I don’t currently have saved for retirement. I know someone who has cashed in every 401K he has ever received. He’s now 44 and has nothing saved up for retirement. As a single dad with two kids to care for, that is sad and quite scary too. He’ll be working the rest of his life.

7. Use Credit cards for impulse purchases. – If you do not have the cash for it, then you can’t buy it. Let me say it again, this time with a kick ass graphic to go with it.

 It really is as simple as that and I NEVER got it. I never cared enough about myself to say “no” to myself. I didn’t care enough about my future to stop and think. Impulse shopping is so very dangerous to our current budgets but also to our future financial stability.

8. Fully Finance a Vehicle  I bought a car in 1994 for $6,500. It was a great little car. But my sole purpose in buying it was that the monthly payment be less than $150. That was my only requirement. I bought the car with out a deposit or a trade in. When I paid it off in 1999, it was because my mom paid the last $1,000 for me. I couldn’t pay for it because I had charged up my credit cards so badly (this was just before I filed bankruptcy) and I was in jeopardy of losing the car. I don’t even like to think about how much money was paid in interest on that little car. If I had done without a car, (and I really could have by finding a different job that was close to campus) and saved my money, I wouldn’t have wasted so much money and almost risked my mom’s credit because she was my co-signer.

9. Fund Trips on Credit Card  This is where the bulk of my current debt is from. When I was in the beginning of my newly single life, my favorite band reunited and I spent THOUSANDS of dollars traveling to cities across the US to see them. I put 100% of those trips on credit cards. What do I have now? A bunch of great memories that are tainted by the guilt of the debt.

10. Ignore the future. There is a quote that I once read “I know not what the future holds, but I know who holds the future.” (Author Unknown). In the past I lived my life thinking that since I can’t predict the future, why worry about it. But if I hope to be an active participant in it, I need to prepare. The future is coming and I plan to be a part of it. Living in denial is no longer an option.


I know you are smart people and have done none of these things and never EVER will! I also know that if you have kids, you are going to tell them all about this crazy girl who did this really dumb things and ended up being living with her mom, unemployed, broke up to her eyeballs and without even a penny in the bank. You are going to then tell your kids the RIGHT things to do, aren’t you?

Sharing my stories about debt and (a lack of) financial education is cathartic for me. It helps me work through why I did what I did. More importantly, I hope it gives you places to start conversations with the people you love the most. Sharing this information is caring!

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24 Responses to 10 Things I Have Done That You Should NEVER Ever Do

  1. Jen @ SheBloggs on April 19, 2012 at 9:48 am

    #1, #2 and #7 were my biggest mistakes and the reason I ended up in so much debt. I also never considered paying off my balance right away and before I knew it, it got out of control. I really did look at it as ‘free money’ although I wouldn’t have admitted it then.
    Jen @ SheBloggs recently posted..


    • Jessica The DebtPrincess on April 19, 2012 at 10:29 am

      It’s amazing how easy it is to lie to ourselves. The simple act of denial is very effective! I’m so glad to have overcome “most” of those impulses!


  2. Sarah BB @ East9thStreet
    on April 19, 2012 at 12:47 pm

    I am guilty of many of your points as well! I 100% financed my trip to Hawaii with my student loans when I was in undergrad and didn’t even think twice about it. Now I think about it every month – when I make that student loan payment!
    Sarah BB @ East9thStreet recently posted..My Goodbye Pictures


  3. Dakotapam
    on April 19, 2012 at 1:43 pm

    I was totally guilty of the student loan thing. Currently not very good about the emergency fund, but we are debt free except for the house, so that takes a huge weight off!
    Dakotapam recently posted..Happy 8th Birthday Ethan!


  4. Andie on April 19, 2012 at 4:53 pm

    I wholeheartedly believei n all of these. Especially number two. However, we are not in that position just yet. We need a better plan…


  5. Elizabeth @ Broke Professionals on April 19, 2012 at 7:24 pm

    I agree with all of them – and haven’t committed any of them – except for #4. Why is it so bad to go to college on student loans? I financed part of my undergrad and graduate degrees with loans; granted, that was when you could still consolidate loans to interest rates under 2%, which is impossible these days. Education is about access just as much as it is about learning; the two schools I attended have helped me so much simply because of their name brand recognition, making the cost totally worth it in my point of view.
    Elizabeth @ Broke Professionals recently posted..The Cost of Jury Duty


  6. Jamie on April 20, 2012 at 1:58 am

    I can relate to this post a lot =) I regret my credit card debt, severely!!!

    I don’t regret the student loans though because that was the only way to get me through school, and I will cherish that degree forever. 2 more years and they’ll be paid off and it will be the best feeling in the world! =)


  7. Dannielle @ Odd Cents
    on April 20, 2012 at 7:24 am

    The first time that I used my first credit card was on a trip to Toronto for my cousin’s wedding. I shopped like there was no tomorrow. When I got back home and I saw that bill, my eyes popped and that was enough of a learning experience. I never shopped like that ever again…And everytime I travel and use my credit card, I keep a record of what I spent.


  8. Eternal*Voyageur
    on April 20, 2012 at 10:47 am

    Credit cards aren’t popular in Europe, so I’ve never used one. I do second the part about the emergency fund — I only have a small one since a few months!
    Eternal*Voyageur recently posted..


  9. Trish on April 20, 2012 at 10:51 am

    Our culture is so debt-centric it really is amazing. Even teenagers have credit cards! When I was in my early 20′s I got into a lot of trouble with credit cards. I paid them all off and closed them all and didn’t have a credit card for over a decade. I only recently opened a couple because while my credit score is excellent, it could be better if I had a history of paying credit card debt. This is our culture. I’m hoping to teach my kids not to go into debt. If you can’t afford it, you don’t need it. And if it’s a big ticket item, then save your money until you can pay cash for it.


  10. [email protected] on April 21, 2012 at 1:39 pm

    I definitely made some of the mistakes you mention with credit cards. However, I am so glad that we have never touched our retirement savings. That example you give of a 44 year old with no retirement savings is scary!
    [email protected] recently posted..


  11. Ryan on April 24, 2012 at 2:23 pm

    Sadly, I’ve done most of these as well. We financed 100% of the value of our current vehicle, but I wish we hadn’t. We’re a little underwater on it now, but thankfully it’s still running well.
    Ryan recently posted..Never Pay Full Price for These Things


  12. Emily on April 25, 2012 at 10:50 pm

    I agree with a lot of your points but I don’t agree with your comments about student loans. That was the only way I could afford to go to college. My parents didn’t make enough money to have a college fund and they co-signed my loan for me and paid the interest payments while I was in school, which was a requirement of the loan type I had. They also paid for my apartment (cheaper than the dorms) and for that, I’m very thankful. I got what scholarships I could, (I had a 4.0 in college and ended up with a whopping $400 merit scholarship from the school. Yay Me!) but needed loans to pay for the rest of it. I took a job on campus to pay for utilities, groceries, books, spring break and the occasional outfit.

    When I graduated, I couldn’t find a job right away and decided to go to grad school. That was 100% funded by loans and b/c I moved to a new city, I was broke. I found a full-time job that allowed me the flexibility to go to school full-time but did not pay all of my bills (I didn’t have any credit card debt or car payment b/c I paid my car off by this point) and I needed that money to help me eat (in, not eat out.) so I needed to take the student loan refund that was offered to me, in order to supplement my paychecks and pay my rent and utilities for 6 months. The job I took only paid me $17,000 a year; I needed the additional $5,000 in order to pay for rent, groceries, insurance, etc.

    Today, I have a Master’s degree, a very good job and I’m able to afford my college loan payments. I would not be where I am today without using student loans. I do agree that using loan refunds from your school on non-necessities is an idiotic idea. That $1000 trip to Cancun is not worth 20 years of payments! Living in a safe neighborhood for the 18 months I was in graduate school, was.

    I think better advice to give someone about loans is choosing a school that has a good program that you are interested in, at an affordable cost. I went to a state school and ended up with a MUCH better education than the people that paid twice as much to go to the neighboring private university. I am so much more prepared for my career and it shows, in our work levels and job quality that we’re offered.

    My loan payments are under $300 a month because I was able to consolidate and lock in a SUPER low interest rate. By making 3 years of payments on-time, my interest rate dropped another 1% (until I miss a payment.)

    Without the loans, there’s no way, I’d be where I am today.


    • Jessica The DebtPrincess on April 25, 2012 at 11:56 pm

      I’m not going to be able to give your reply the justice it deserves because I’m studying for an exam right now but I want to address it.

      I disagree with funding college completely on student loans for a number of reasons. While there are some people who may find it helped them, you clearly are one of them, I do not think it is that way for many people. You are paying off both undergrad AND graduate school loans with just a $300 payment? Do you know how incredibly rare that is? My undergrad payments alone were over $200.

      Also think about all the extra money you are paying in interest. If you could be putting that student loan money into an investment, you’d be a millionaire long before retirement.

      There is no reason to go to college straight out of high school on loans. Get a job, ANY job and work. Save up for classes one at a time if you have to. Work as closely to your targeted career goal as you can to get first hand experience to know that is indeed what you want to do with your life. Millions of people have degrees that are useless because they aren’t in the field they thought they wanted to be in.

      There are far FAR better ways to get a college education than to fund it 100% from school loans.

      Did you know that student loan interest rates are set to double in the coming months? I really hope your payment doesn’t double. I personally will be in a hell of a lot of trouble and I’m freaking out about it.

      I do not believe that student loan debt is good debt anymore. That may have been the case 20 years ago when jobs required a degree but with the economy the way that it is and very little signs of improvement, it is far wiser to start working when you are young, work your way up in the career path you are interested while going to school concurrently.

      I’m taking a blogging break right now but I hope to address this clearer and with better examples in the coming weeks when I return. I hope you’ll stick around to read it. Thanks again for your great reply.


      • Emily on April 26, 2012 at 11:10 am

        I consolodated my loans after I graudated so my interest rate has been locked in at 2.8% and it won’t go up for the entire life of my loan. And the loan program that my state had at the time gave me a 1% interest rate reduction if I made 3 years of payments on-time. I did that, so until I miss a payment my interest rate is locked in at 1.8%. That to me, is a great investment. I am painfully aware of how much money I’ll be paying in interst over the years, but I also know that it is far less than I will be paying in interest on a mortgage. I also know that b/c I have the education that I do, I’m farther ahead in my career at 29 than if I had waited to go to school and I’m also farther ahead in my my savings plan for that mortgage than someone that went to more expensive schools and got the same degree.

        As a high school senior, I knew that I would be funding my education on loans and I was very careful when I evaluated the programs I wanted to attend. I chose a school that had a great program but would cost less than a fancy car. I did the same with my graduate degree.

        My comment on your blog was meant to illustrate that I think the better advice to give your readers is to choose a college that is reasonably priced, espeically if you are planning to fund your education on loans.

        Where I’m from, there aren’t any jobs and it has always been that way. You have to move away to find any decent paying work. We don’t even have a McDonalds that you can work at. Most of the people that live where I did, drive more than 90 minutes to get to their job each day. It is a long epic journey. In order for me to have worked and save for college, I would have likely needed to move away and then all of the money I’d be making from an entry level job would have paid for my living expenses and nothing more, there wouldn’t be any savings. If I went that route, I’d still be there. I would have never gone to college and I’d never be financially secure.

        I knew how much I wanted a good future and I was smart when I chose a school and a loan package. It worked to my advantage that loan rates dropped as I was graduating and I was able to consolodate and lock in a super low rate.

        I think that loans are there for a reason and the system works when you plan your loans to live within your means. There’s a reason the housing market crashed as badly as it did. People bought a $500,000 house when they could only afford $100,000 and theyd didn’t care, they were excited to do it. The same goes with student loans, only buy into what you can afford. I knew what I could afford and I bought an amazing $45,000 education… total. Some people choose a school where that only covers one year.


      • Emily on April 26, 2012 at 11:11 am

        And good luck on your test! :)

        (I didn’t want that to get lost in the other comment)


  13. Martha on April 26, 2012 at 9:00 am

    We live in a “catch 22″ world. When we paid cash out of our pockets/purse, we where much more aware of our spending, and subject to thieves looking for that cash.Now it’s electronic and safer in one respect, but creates a disconnect between us and our money.I feel a little panic when I take what’s left of my paycheck and drop it into savings, leaving very little to spend.Credit card is for emergencies only, balance paid in full upon receipt.Out of sight, out of mind works for me, but it took these 62yrs. to learn:)


  14. Christa on April 26, 2012 at 2:56 pm

    I also took out two college loans and got the max every semester. I never thought twice about it because I thought it would guarantee a great job later. Even though I did get a good job out of college, I wish now that I had been more frugal in college.


  15. Jessica Sanders
    on April 27, 2012 at 2:13 pm

    I currently don’t have an emergency fund. My boyfriend and I (we have joined finances) keep saying, next month we’ll take that extra and put it away and we never do. If something awful happened we would be screwed right now – so thanks for reminding me that we REALLY need to actually do that!


  16. Jennifer from Credit Karma on April 27, 2012 at 7:34 pm

    Great post, Jessica! Thank you for letting us learn from your mistakes! That must’ve been one great band to spend that much money to see them. :)


  17. Shannon-ReadyForZero on April 30, 2012 at 5:23 pm

    “I never cared enough about myself to say “no” to myself.” – What a great quote! I’m not sure many people think about debt this way – that caring for yourself has more to do with saying no so you can have a better future rather than just saying yes to what you want at the moment. I’m sure if more people had this quote running through their mind at the time of a purchase, they’d be a lot more likely to turn back and say no! Thanks for writing so candidly about your experience and sharing it with all of us. These lessons can be learned and understood so much easier through hearing about other people’s experiences.


  18. B-Boy Stance and Link Love! on May 18, 2012 at 3:54 pm

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