I made a mistake. A big one.
In my previous post, I wrote about the idea of upgrading one’s life after achievement. Essentially, people have a tendency to increase their standard of living once they get a job/raise/promotion. Their spending keeps pace (or in my case, outpaces) their income. I fell into this harmful thinking, and I paid dearly for it.
Please turn your attention to Exhibit A:
When I finished my doctorate in May of 2015, I went from making negative income (funded by student loans) to having a respectable income of $80,179 per year. My wife made a similar income, bringing our household income to $160k. After 8 years of hard work in college, I decided to treat myself. I was a doctor, dammit, and I deserved a nice car. Despite being nearly $110,000 in debt, I decided to take the plunge and buy a BMW. I thought I did due diligence — I bought used instead of new, I paid cash for the car, I even had a mechanic look it over before buying to ensure I wasn’t getting ripped off.
However, life has a way of punishing you for financial mistakes when you are least prepared.
Anyone who has owned a less-than-reliable car know the feeling: the fear of turning your vehicle’s ignition key and nothing happens. Sure, the car may lie to you, making all sorts of whining and whacking, blinking all kinds of lights on the dashboard, but the reality is clear — the car is not going to run. When it happened to me, I was hit with several waves of realizations:
- This is embarrassing.
- I am stranded.
- This is going to be expensive.
A few hours later, a man in a flatbed showed up and hauled my baby away. It was the second to last time I would ever see her.
Why did I know it was going to be expensive? Because everything about a damn BMW is expensive.
I present to you Exhibit C:
Here is the complete service record (including car washes!) for the ~6.5 months I owned the BMW. Notice the very large charge at the very top — that was the engine repair to get my car running again. In case you haven’t whipped out your calculator yet, I spent $4,018.51 (not including gas) keeping the car running. That is an average of $618.23 a month in vehicle maintenance! The wildest part of this whole thing? The repair I had on 11/9/16 was only enough to get the car running — the mechanic quoted me over $8,000 to “do the job right.”
That was it. Despite how much I loved the car, I sold it and bought a used Ford sedan.
I read “Millionaire Next Door” and began my financial renaissance. I started reading blogs about personal finance and listening to podcasts about the same. I got serious about killing the monster called student loans, and I gave the man in the mirror a punch in the face.
In fact, I may have punched too hard.
I was filled with financial regret. I made an enormous mistake, setting us back months in financial progress. My BMW escapades cost us thousands of dollars, which translated to time I would never get back. Those were months of work which could have allowed us to have kids sooner, to buy a house sooner, and to retire sooner. This realization made me sick to my stomach, and I came down hard on myself.
However, it is never too late to turn your life around. You have to forgive yourself for the mistakes you made in the past, overcome the regret that comes with those mistakes, and form defined, actionable goals to prevent them in the future. Learn and adapt.
I was listening to the “Millennial Money Minutes” podcast (make sure to check ’em out!), and there was a saying that I had never heard before:
The best time to plant a tree was 20 years ago. The second best time is now.
I think this saying has so much value, especially when it comes to personal finance and debt management. We all make mistakes. Yes, it is important to identify those mistakes and to change the behaviors that led to the mistakes, but it is never too late to change your future. You control your destiny. Be the change you want to see. If anything, it will make for a good story (or blog post!) further down the line.
What kinds of financial mistakes did you overcome? Let me know in the comments below. Thanks for reading!