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To err is human. But you can avoid catastrophe by heeding others’ advice.

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Even financial experts make money mistakes

John Rampton has one career that spans several jobs. He’s a financial expert who writes for national publications, speaks at national conventions, and invests in national companies. [6]

Yet the point here isn’t to praise John Rampton, but to tell you his most embarrassing money mistake. Many years ago, he was broke — and it was his fault.

“I had a massive car payment, and I didn’t have a penny to my name,” he told Debt.com last month at FinCon, one of the many financial conferences where he’s a rock star. [7] “I was driving a brand new BMW, but I couldn’t afford the payments. I was living paycheck to paycheck.”

Eventually, he decided to do something about it.

“I swallowed my pride a little bit and sold my BMW X5,” Rampton says, with pain in his voice. “It was my brand-new pride and joy. I then took the money that I was making on the car payment, and I bought a used Ford Focus.”

While it was a solid financial move, it still hurt.

“It wasn’t beautiful,” he says. “It was missing two hubcaps and a gas cap. But two years, I was able to use the money I saved to pay off all my student debt.”

Debt.com spoke to other financial experts at FinCon and asked them to recount their worst money mistakes. Here are our five favorites…

Gerri Detweiler, credit expert: I have made more than a few financial mistakes in my life, I will confess. Some of them were more expensive than others but I think one of them was buying a bigger house than I needed. I have a small family. We bought a house out of foreclosure, so it seemed like a great deal, but it was a pretty big house. And so when I look back at all of the money we spent on home improvements and repairs and utility bills and cleaning bills, I probably should’ve had a smaller house. I solved that recently. We sold our 2,200 Sq. foot house and we now live in a 400 Sq. foot home. So, I downsized dramatically and I will tell you I don’t have to hire a cleaning person, my utility bills are like, a quarter of what they were and life is a lot simpler.

Rocky, 30AND0.com: My first experience with debt, like many others, I think was that I took on student loans. However, I was the first person in my family to go to college. So, I took on student loans so that for whatever reason wanted to be paid back within 60 days after my class ended. And at the time, I was making $5.15 an hour, so I did not have $2,500 to pay back the student loan. So, I started my adult life at 18 with a ruined credit because I couldn’t pay that loan back and I couldn’t make payments on it and it went dormant for quite some time until I joined the military and was able to pay it off. I just knew that getting in debt was not the smart thing to do. So, that kind of experience shaped me to get away from that very quickly and I think it’s very important that people realize how detrimental debt can be, because interest just doesn’t work in your favor when you’re investing. It works against you when you’re in debt.

Andrea Woroch, AndreaWoroch.com: When I was in college just toward the end, I got a credit card and I started racking up purchases, I went abroad, I went to Australia for a year, and started using that credit card so I could enjoy that year away. Unfortunately, that put me in a lot of debt and it took me many years to get out. That was the turning point when I realized that wasn’t the lifestyle that I wanted and that I needed to make a big change on how I viewed my everyday spending and what I wanted out of life.

Joe Saul-Sehy, Stacking Benjamins Podcast: I was a complete money screw up. It’s funny because I ended up as a PR representative at American Express and American Express Financial Advisors for 9 years. Before that, though, my first credit card that was taken away was an American Express card. Because in college after my family, who never talked about money, I went to college, went to our student union, signed up for a credit card. By the way, I’m at a military college, so I can’t make any money. I got my credit card, immediately took a bunch of my friends to lunch, bought myself a sweater (at a military-college; I can’t wear a sweater). Within 120 days, the credit card was gone and my credit was shot. But then through those hard knocks — and obviously through learning more about money — I became good enough at it to not only get my own situation taken care of but to counsel other people. I was a financial planner for 16 years.

Brandon Neth, FinanceBuzz.com: At 18 years old, I got this inheritance — I had no idea it was coming, $150,000. I got a ton of money and I had no financial literacy and I blew through it in four years. Not only did I blow through it, but I also managed to accumulate debt. I came out of college with a bunch of debt and made huge mistakes. So, luckily, luckily, I had met my wife in college and she was the exact opposite. One day, she just kicked me and said, “you’ve got to make these changes.” And I started making these changed a little at a time and decided to make these changes a little bit at a time. I decided to live this crazy frugal life. I discovered Mr. Money Mustache, The Mad Phoenix, and these guys that have just writing about it and just doing it. And I just jumped right in with everything I could. I changed my entire lifestyle: I FIRED at 33 years old. The only reason I work today is that I love it. So, I went from getting out of college at 22 years old with $30,000 in debt to 11 years later I FIRED and I don’t need to work. All it is is being online and putting in the time and effort. I’m not the smartest guy in the world, if you talk to me for five minutes you’ll know that. So, if I can do it, anybody can do it.

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Moving past financial mistakes

We all experience financial regret at some point. It’s easy to get frustrated by financial missteps, but how do you put them into perspective and move on?

Marcia Reynolds, Psy. D. wrote an article about “5 Steps for Moving Forward in Spite of Regrets” for Psychology Today. In her article, she discusses how regret is often based on false comparison. If you are defining happiness by the stuff that you own or the size of your house, you may be setting yourself up for regret.

She notes that humans are bad at estimating what will bring them happiness in the future. We have only partial control over our circumstances and we make decisions based on past experiences. When life turns out different from what we expect, we blame ourselves.

She discusses 5 steps for dealing with regrets so that you can move on. Let’s look at her 5 steps in the context of financial regrets.

1. Accept your regrets as part of being alive

No one will make the perfect financial decision every time. My father used to tell me, “If you’re not making any mistakes, then you must not be doing anything.” You can’t always buy that car at the lowest possible price or get that mortgage at the lowest interest rate. Make the best decision that you can at the time. Life is about learning. Learn from your experience.

2. Don’t overemphasize what was bad about your choices

Don’t beat yourself up too much about a bad financial decision. Try to understand how you overpaid for that car or ran up all that credit card debt. You made that decision in the context of your circumstances at that particular time. Perhaps you got bad advice. Use your knowledge to avoid future mistakes and to share your hard earned wisdom with family and friends.

3. Claim today as the best you have with what you now know

Focus on the positive aspects of your present financial position. Appreciate the things that you already own or experiences that you have been able to afford. Look for opportunities to improve your financial future by enjoying what you have now and using what you’ve learned. Find simple ways to enjoy your life like visiting a friend, volunteering, reading a good book, taking a walk, or going to a museum.

4. Make time to reflect on what you are grateful

Give yourself credit for your financial successes. Be grateful for your possessions, your experiences, raising your children, and for the people that you have been able to help along the way. Take the time to thank the people who have helped you get where you are today.

5. If you are dwelling in regret, change something

Making even a small financial change can help overcome financial regret. Pay more than that minimum payment on your credit card. Start depositing a small part of your paycheck into a savings account. Small steps can lead to bigger steps. Maybe you can refinance that mortgage at a lower rate or start that retirement account.

Ms. Reynolds points out in her article that people regret what they “did not do” more than they regret “what they did.” Taking positive action, even a small one, can change your perspective and make you feel more empowered over your finances.

Everyone has regrets. What’s important is to learn from them and move on, so that you can enjoy a happier, healthier and more fulfilling life.

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About the Author

Jess Miller

Jess Miller

Jess is the former assistant editor at Debt.com and previously worked for National Journal and Scripps Howard. Her work spans from print to financial services to UX/UI design, and her expertise includes copywriting, social media, content marketing, design, and editing.

Published by Debt.com, LLC