folktales of financial faux pas
I think it’s important to admit that everyone makes mistakes, even the mighty current president of the USA (no way!?) and even Mr Money Mustache. There is no avoidance of this fact so the best thing is to admit it when you make one, use it as a learning experience and move on with your life without regret (perhaps easier said than done depending on the consequences, I’m not sure how I would have handled inventing the atom bomb for example but there we go).
As this is supposedly a personal finance blog today we’re talking about financial faux pas. I’m going to write down some of my worst monetary sins for you to laugh at, and feel free to use this as a forum to admit your own.
There is no judging allowed on this page, think of it as free group therapy courtesy of your old pal TFS.
So cleanse your souls my FI brethren and join me…
cash machine cock ups
We’re starting small here, but sometimes I can be very absent minded and walk away from cash machines with my card but without the money. One time way back it was around £50 I think and so I rang the bank and got them to reimburse me, which they kindly did! But more recently in the last year I would say I’ve done this 3 times now with values of £10, £20 and then £10 again. The thing with all of those times is that it was in a very busy square in London and so there is no chance the money would have gone back in – I believe there is a time limit of about 30 seconds then the money goes back in and you can get reimbursed or are automatically reimbursed – so I *shock* couldn’t even be bothered to ring the bank to see if I could get it back.
This is shockingly lazy to not even try I know, but part of me thought I needed to be punished financially for being such a dufus (clearly this did not work) so I thought I’d just leave it.
The final £10 was actually even more ridiculous as I was at the same cash machine as where it happened before and I thought to myself “Oh… better not leave the money in the machine this time” and then the next thing I knew I was 50 metres away and there was no cash in my wallet.
Do my ears deceive me or is that my self fulfilling prophecy klaxon going off?
It would seem my subconcious only heard the last few words of that thought… “leave the money in the cash machine” 1. It was like a hole in the space time continuum had opened up in my brain and I honestly can’t remember what happened for those 30 seconds between my last thought and checking my wallet. Gadzooks!
Anyway so that is £40 in a year of cash machine confusion!
Total cost over the last 5 years: £90
I’m really good at losing clothes, especially coats. I cannot tell you how many coats I’ve left in places over the years. Let’s crank up the admission time another notch here: Yes I am mainly drunk when this happens.
I don’t know what it is with alcohol that makes me want to part ways with my clothes (snigger) but it happens with an astonishing frequency.
I guess the only upside is that I tend to buy cheap coats so each time I’m only looking at a £20-£30 replacement cost, but let’s face it this is still a ridiculously daft thing to be doing.
Total cost is probably 1 coat per year so we’re looking at around £150 over the last 5 years…!
I’ve made many stupid bets over the years which I won’t bore you with 2 but this gaffe refers to the fact that I decided to try to pay off my credit card balance by gambling. I will repeat that in case you we’re floored by the stupidity of this plan the first time and couldn’t absorb it properly:
I decided to pay off my credit card balance by gambling
I was fresh out of University and in all fairness it was a 0% deal which was valid for 6 months after you finished Uni, so running up the balance in the first place wasn’t that bad. Obviously it was still money I didn’t have and had to pay back pretty sharpish though! I also didn’t have a decent job so paying it back quickly was looking like a tough task working on office temp pay.
So my plan was hatched to win some big bets and pay it off. The balance was around £1,500 if I recall correctly.
There are clearly a thousand holes in this otherwise “watertight” plan but the main one I found was that whenever I won a bit I tended to think I was doing well and so spent the money rather than paying it off (oops) and then inevitably ended up losing a few bets after that and the balance would either revert to what it was before or even go up slightly. Not good!
In a huge stroke of luck, the credit card company changed their rules and started charging cash transaction charges on bookmaker deposits. It turned out even the young and financially loose TFS was not stupid enough to pay these charges – they were extortionate – and so my plan was “foiled” and I decided to just pay it off the old fashioned way by getting a proper job and making monthly payments instead. I think I cleared it within 3 months in the end which was a lot less stressful than relying on my original plan 🙂
The lesson here, that should have been obvious by watching any Guy Ritchie Brit gangster flick, is don’t bet with other peoples money!!!
I’m not sure how much this cost me in monetary terms (perhaps nothing) but it certainly was stupid and caused far more stress than it was worth.
We once decided to spend £500 on a night in a hotel. Yep,
500 big ones
Half a bag of sand
I think we’re all up to speed with the amount now so let’s move on.
A bit of context, we were are the end of travelling around South America in 2008 and wanted a treat, to be pampered after enduring countless 12+ hour uncomfortable (but in some ways still very fun) bus journeys, and staying in hostels for 3 months.
So we pretty much looked up the most expensive hotel in Rio we could find: The Copacabana Palace.
It was £500 for the night and this didn’t even include dinner which was another £100 on top of that.
Needless to say none of this seemed “worth it” at all after the event but at least we had a story to tell about it. At the end of the day it was just a pretty nice hotel room and a slightly above average dinner, while being made to feel a bit uncomfortable as we didn’t belong there, clearly not being uber rich!
Anyway I just realised I already told this story before here so if you want any more details have another read of that post, but I thought it might be fun to work out what that money would be worth now if I’d invested it instead.
As luck would have had it, this was in the depths of the financial crash: November 2008, the FTSE was at the dizzying heights of 4377 according to the Yahoo Finance chart. This now sits at 7343 at the time of writing so our £600 would have turned into a cool grand. However this doesn’t take reinvested dividends into account and surely we’d have diversified over a global basket of funds as well.
Seeing as the Vanguard LS100 fund has increase by over 100% since it’s inception in June 2011 when the FTSE 100 was around the 6000 mark, I think it’s fair to say that our £600 would have at least tripled to £1800 if we’d have invested it at the depths on the 2008 crash in something similar? Does that sound right?
I can’t find any decent graphs for indices with dividends reinvested so if anyone out there knows of any that would be cool!
How about you? What are worst financial faux pas? Repent your sins here and all will be forgiven!
- I’ve read that subconciouses can get things wrong like this on occasion, especially with golf: “Don’t hit the ball in the water, don’t hit the ball in the water” – I think you get the point by now 🙂 ↩
- actually some are hilarious and are worth hearing, but I will save that for a separate post one day I think ↩