Have I made mistakes? Of course! Just to list them quickly:
Renting the ‘nicest’ apartment
Buying a new car
Buying a car for the fun of it
The credit card
Now to give further explanation into them.
Renting the ‘nice’ apartment
This was my biggest mistake. When I moved to my current city, I went looking for an apartment. Because of my hectic schedule before I moved, I was unable to take the time to look myself. So I hired a lady to do the work for me. She charged a one-time fee of $200. She did everything from from finding the places to negotiating exactly what I wanted.
Overall, I was quite happy with the process and would do it again in a heartbeat. The process was easy and painless.
Regrettably, I only gave her a week to do research, so when I got there she had only mapped out 7 options for me. Quite good for only being able to look for a week. I set a price range of $500-$600 a month for a two bedroom apartment, which is the norm for an apartment that size in my area.
I realize now – I asked for a two bedroom apartment and barely had any furnishings to fill it with. (I still mentally kick myself for wanting a two bedroom apartment!)
As we visited each apartment, I was unhappy because they were all extremely small and came with no utilities. Just recently, I found out I could have had a one bedroom all-inclusive for the same price. Just as I was getting tired of seeing place after place turn out to be a dump, we arrived at the last apartment. To my surprise, it was extremely spacious, in a great neighbourhood, and had recently been redone. The only downside was it was $150 over what I was looking to spend and did not include utilities.
Nonetheless, I made up my mind in seconds and signed the lease within a day of visiting the apartment.
Buying a new car
When I was in high school, I worked part-time jobs that provided me with the income to buy myself a used car, which I payed off in a year. It was a good car, in great shape, and had low mileage. When I bought the car, it was 7 years old, and that was 4 years ago. Because I didn’t do regular maintenance on the car (learned my lesson), my brake lines rusted out and it would have cost much more to fix the car than it was actually worth.
Thus I went ahead and financed a new 2011 Ford Focus SE. It was an unexpected expense and, without a down payment, ended up costing me $338 a month. This pretty much ate up the wiggle room I had in my budget, which was supposed to be roughly $400 after all my expenses.
Buying a car for the fun of it
I spent almost a year working at a car dealership while I was in high school. During that time I developed a fascination with fast cars. While I was taking my technician course, I got the chance to buy a used ‘sports’ car. I thought it was a great deal at the time and gladly paid the $4200 the guy wanted. This is probably my biggest regret, because I used up all my savings to buy that car.
After owning it for less than a year I sold it to my cousin for $2000. I have only ever seen $1000, but I decided to leave it be; I don’t want to lose family over a car.
The credit card
My story is undoubtedly no different than anyone else’s. Due to all of the above, I had trouble paying everything but bills. My borrowed credit kept rising and rising. Due to rising minimum payments, some months I really had a hard time finding money for food. After about a six months with a credit card limit over its max, I finally got a raise at work that enabled me to start making heavier payments on my card. I figured the best way to pay of my credit card would be to put as much money as I could on the card. This was a bad mistake as I ended up having to draw from my credit card again for day-to-day expenses. This led to a cycle where I have been unable (until recently!!) to lower my credit card balance.
For my next post, I will be posting about how I am slowly recovering from debt and on the path to being debt free within 6 months.
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