Money can be scary. One of the problems is that we just don’t talk about money enough. Because there’s a huge taboo surrounding financial matters, many people aren’t as savvy as they could be – and a lack of information can lead to big mistakes. Here, 10 women share their financial regrets (with names changed to protect their privacy) – and we’ve got essential tips and resources that can prevent you from following in their footsteps.
“I chose a graduate program that I wasn't really sure about, in a field I'd never worked in. I'm now $55,000 in the red for a year of my life that I'll never get back.”
Lesson learned: Before you even take out student loans, do your research. Begin by asking yourself some basic questions (how much money you really need, how long will it take you to pay the loans back, etc.) and then get down to the details. Carefully consider if private loans are right for you. You don’t want to create a financial burden that you will really regret.
“I was in an abusive marriage and my husband pressured me to take out the full amount of my student loans, and I did because I thought it would make him happier and thus make our lives easier. I knew he had problems with impulsive spending though, and we shared a bank account, and the loans are in my name. He bought himself a lot of nice things but his rage problem got worse. I finally divorced him, and now that he's flown the country, I'm left with $50,000 of debt.”
Lesson learned: Keep your student loans in your name and deposit the money in an account not accessible to your spouse, children, or other relatives. Only take out the amount of loans of you need and pay them back as soon as you are able—which will require planning, proper management, and sacrifice. Here are six reasons to pay off your student debt now.
“Basically anything and everything involving cars has ended up being a financial regret. I didn’t do enough research about buying a car before I bought one and ended up paying too much for mine. I paid the list price without negotiating at all. I also didn’t shop around for auto insurance when I bought my first plan. I was young, just out of school, and overwhelmed with adulthood. ”
Lesson learned: Always, always, always do your research. This is the Internet Age. It’s easier to access quality information than ever before. Get a quote online and go from there. Soon you’ll have to answer many questions, like should you get a comprehensive auto insurance plan or a liability auto insurance plan?
“I’m totally rent burdened because I wanted to live in a house, not an apartment. Now I’m paying for it big time. My house is beautiful, with a nice yard and patio, but I pretty much spend all of my free time at home. I don’t have enough money to go out.”
Lesson learned: Getting your own place may sound liberating, but be realistic. Can you actually afford it? If you live in a major metro area, chances are you’ll need either a high salary or a roommate. Even if some smaller areas, that’s the case. It depends on what rent is like where you live. If you do end up getting a roommate, discuss how you’re going to share expenses in an equitable way.
“I’m a compulsive shopper. I’ve spent far too much money on things I didn’t need or even really want, which has left me in massive credit card debt.”
Lesson learned: Prioritizing your spending can be difficult, but if you seem to be far worse at this life skill than the average person, you may need psychological help. There is no shame in seeking a therapist—better to get treated early but late is still better than never. You don’t want one too many shopping sprees to kill your credit score. You know, that thing that sometimes seems to dictate every adult decision you have to make. Here are the biggest credit score myths debunked.
“My biggest financial regret is buying a house too young. I hadn’t yet decided where I wanted to live and what I wanted to do, but I figured that buying a house would be a smart investment. It turns out, the city I chose was right for myself at age 23 but not right for me now at age 27. It was a mistake thinking I would want to live in my college town forever, or [even] several years. Now I’m stuck. This is not a city with high enough rental demand, except right by the university, which isn’t where my house is located.”
Lesson learned: Buying isn’t always better than renting. (Your first step in determining that should be to use a Rent vs. Own calculator.) Plus, where you buy matters big-time, too. Here are five things you should know about a neighborhood before you buy a house there.
“I started a business with no business plan. It wasn’t a passion project, either. I was desperate after I was laid off. I took out loans I didn’t need and spent far too much money without really thinking.”
Lesson learned: A business plan is essential, as is a business preparedness plan. If you decide you want to leave your business to your kids or other relatives, you need a business succession plan, too. Basically, running a successful business involves a lot of planning so plan, plan, plan.
“I was such a foodie that I insisted on blowing big bucks on fancy restaurants all the time. Honestly, most of those meals weren’t even worth the money. I don’t know who I was trying to impress! I should’ve stayed home and cooked for myself most nights.”
Lesson learned: It may be easier to talk about not eating out than to actually stop eating out. So if you’re going to keep eating out, you might as well learn how to save money dining out.
“Someone broke into my [place] and I didn’t have renters insurance. They stole all of my valuables and a bunch of little things of sentimental value, too. I had to replace all of my electronics, fine jewelry, designer clothes, and more, all by myself. I have a power job so dressing down is not an option. Whoever burgled me must’ve known that I was the girl with high-end taste.”
Lesson learned: After you move into your new place, you probably just want to unpack and get settled in. Well, settling in isn’t all about deciding where to hang your favorite movie poster. You need to find a renters insurance plan that works for you. Your stuff is probably more valuable than you think!
“Not keeping my finances separate from my ex's during our marriage is one of my biggest financial regrets. I expected to have trust during marriage. However, my ex was financially controlling and by the end of the marriage, not only did I not have my savings or credit intact, I also had his bill collectors chasing me for accounts I did not even know he had opened.”
Lesson learned: When you and your partner or spouse move in together, you will likely merge some finances, but that doesn’t mean you should combine everything. Consider keeping at least one bank account that is all yours. That way you still control some of your own money.
Want more advice on making smart financial decisions for yourself? Allstate can connect you with a Personal Financial Representative today.