Let me tell you a story. Long, long ago, in a town just down the road, I was born into a lower-income family with parents who never graduated high school. Although, we were immaculate and well taken care of, we lived
quite modestly in our tiny house (actually a trailer, but tiny house sounds trendy and cool!) and I never wanted for anything…except a big, suburban house and a ton of cash in the bank :) Other than material things, however, my childhood was perfect. Really! Then one day, I decided I could actually go to college and get an education and get on the path to the big, suburban pie in the sky! I did just that. I hit that goal before I was 30 years old, too. Before turning 30, I was living the American Consumerism Dream. I was engaged, we had the new, big house with an in-ground pool, and together we earned $200k/year. Not too shabby for such humble beginnings, eh?
You see, despite not having a big financial platform from the start, I made smart financial decisions. I graduated high school and started working at a local factoring soldering electrical components. There, I met an engineer who told me I could go to college with very little money. He opened my eyes to the community college. I did just that. I stayed at the factory, went to school at night, and gave every dime I made to the community college for my classes. After 4 years, I had my associates degree. After that, I was accepted to one of the best, local colleges around, Franklin & Marshall! I was ecstatic! But, Houston, we had a problem! F&M wouldn’t give me a single dollar towards financial aid simply because I was a transfer student. The only option was taking loans that would’ve amounted to about ~$50k (This is what my memory is telling me. It could’ve been a little more or less) in debt for 2 years of school. Their current annual tuition is $50,300/yr. Crazy. Even though I was enamored with the idea of attending my dream school, I wasn’t so nuts as to think it was worth the debt, even at my young age. So, I kept looking and applied and was accepted to another private college not too far from F&M. Elizabethtown College offered me an academic scholarship. And, despite their tuition also being pricey, I was able to attend for less than $20k for BOTH years! I did just that! I graduated in two years, again, with honors! I eventually was able to earn my graduate degree with 100% reimbursement from my current employer. All told, I spent roughly 30k, out-of-pocket, on my education that has awarded me with a high-paying career in a scientific field. I was smart, smart, smart when it came to my finances and education. Yep. Good decisions. But, just wait…
Personal Life & Housing
After earning my undergraduate degree, I found a high-paying job in my industry and my boyfriend proposed! Yay! Things were going just the way I planned. We were both high earners, so we decided to purchase the pie in the sky! We went from our very comfortable and affordable townhouse, to a huge, waste of space, brand new, suburban house. We even put in the pool. Another huge waste of money. Nonetheless, here it is! I was living the dream. I had come a long way from that trailer, baby! I was educated, making great money, contributing 15% to my 401k, maxing out my IRA, and living in a cookie cutter house…the kind I only dreamed about living in as a child. All this before I turned 30 years old. Go me.
I was doing so well, in fact, that I bought my parents a house. I moved them out of that tiny trailer and bought them a modest, semi-detached home in a nearby town. Of course, I bought this house just before the real estate bubble burst in 2007. I overpaid by about $20-$30k, which I was unaware of at the time. I moved them in and subsidized their living expenses to the tune of about $800/month. After all, there was a reason they were living in that trailer. That is what they could easily afford.
Then, my fiance and I broke up. Since I moved into HIS townhouse in the beginning of our relationship, HE owned all of our things. We moved HIS things to the big house when we bought it. I contributed to the big house purchase, but my name wasn’t on the deed since we weren’t married. We didn’t put a ton of money down (we spent it on the pool) so I was okay with not being on the deed until we tied the knot. Yikes. So, I moved out. I left with 4 lawn chairs, my bath towel, and my pillow. I got back the $5,000 I put into the new house and was on my way. Here I was, 31 years old with nothing to my name except $5,000 and my retirement savings. Naturally, I moved into the home I bought for my parents just a few short months ago. But, emotionally, I couldn’t handle living with my parents at that age. And, I couldn’t sell the house I just moved them into, where would they live? So, I did what any emotional mess would do. I stopped ALL contributions to my retirement accounts and got myself an apartment. Now, I was not only subsidizing their living expenses, I was also paying another $1000/month for mine.
The Snowball Effect
Before I knew it, I found myself finding comfort with someone who wasn’t the best choice for me. The long and short of it…I became pregnant and he didn’t stick around for the long haul. Ugh. How did I get myself into this situation? I did everything in my power to overcome my past and build a better life for myself and here I was, in my early 30s, a single mom, living in an apartment, subsidizing my parents, and NOT saving a dime.
My next bad decision…I moved out of my apartment because I wanted to give my daughter a backyard. Damn you to Hell, Emotions! I didn’t want her living in an apartment (silly, I know). So, I scraped together enough money from my tax return and bonus to purchase another house, while still maintaining my parents in the semi-detached. I almost made a good decision here and moved back into the home with my parents (actually only my mom at that time, since my dad had passed away). This would’ve been the absolute BEST decision I could’ve made. That would’ve given me time to pay that house down significantly before buying another house in a better school district before my daughter turned 5. But, I did not do just that. I moved us into a new house that I could barely afford. We were strapped. Really strapped. So much so that I didn’t buy a washer and dryer for a year. I would take our laundry to my mom’s house every week. And so it went, for nearly a decade.
Finally, I got my head out of my ass and started moving forward again. I dated and dated and dated until I found a good one! We married a few months ago and myself and daughter couldn’t be happier. We have a strong financial plan and aren’t going to sell the small home I bought a few years ago. We’re staying put and we’re going to reach our financial goals, damn it! We’ve gone so far as to cut the cable and stopped buying things that others think of as necessities. We have adopted an uber-frugal lifestyle to combat the 7 years I was unable to contribute to my retirement accounts or significantly reduce my debts due to my poor financial decisions. Mr. MMM also has a financial story to tell, but we’ll save that for another post.
So, let’s just say that moving into the apartment instead of staying in the home I bought for my parents after splitting up with my fiance, was the Single Biggest Financial Mistake Of My Life. And, it came at a critical time for wealth building :( For the better part of my 30s, I have made poor financial decisions based on emotion. It is extremely important to Engage Brain when dealing with emotions and finances. Don’t let the two intermingle. And, don’t allow your emotions to drive your finances. They’ll inevitably drive them into a ditch. Case in point.
My apologies for all of the cursing, but I’m on FIRE!
What was your Biggest Financial Disaster, and how are you recovering?
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