Today's economy

My three epic money fails

By Kevin Press,

Comments (4)

I had the good fortune to be invited to the Credit Education Week gala dinner in Toronto last Thursday. The highlight of the night, by far, was Sabina Wex. The 18-year-old won the student essay contest for her piece on the biggest financial mistake she’s made in her young life. It was a beautiful piece of writing — clever and genuinely entertaining at the same time. Remember that name.

Kevin Press - an epic fail!Here’s my favourite part:

“I went to Toys “R” Us and ripped the Katie doll right off the shelf. I marched up to the counter and presented the cashier with $300 in the form of 10 $20 bills, three $10 bills, five $5 bills, 80 quarters, 100 dimes, 200 nickels and 500 pennies. I couldn’t walk home fast enough. As soon as I walked through the door, I spent half an hour eagerly trying to rip apart the complicated doll box. Finally, my hands won the battle with the twisty metal things that hold the doll back. I was so ready to be a mom. I was having so much fun and she was making so much progress until about two weeks later, when I got bored. I never played with my Katie doll again.”

Sabina has nothing on me. I’ve made three big money mistakes in my life. And as someone who gets paid to think a lot about this stuff, I’d say it’s a safe bet that more will follow.

Here are my three biggies:

  • I didn’t spend enough time in school. I earned an undergraduate degree in journalism straight out of high school. It was a three-year program, so I found myself in the rather ridiculous position of completing my formal education at 21. I really thought it would be all I needed. I was told so much about the value of a journalism degree from Ryerson University (Polytechnical Institute at the time; a school I loved), that I considered myself well-educated. I studied radio journalism with Stuart McLean and television with Peter Mansbridge. I was ready for the world. Then I started hearing about the Ivy League grads I was up against for entry-level jobs. The mistake cost me dearly; it took me the better part of a decade to establish myself professionally.
  • I bought a used car without having a mechanic take a look at it. In my mid-20s, I sank my meager savings into a down payment on an aging SUV. I recall vividly, standing with the salesman as he popped open the hood. Me pretending I knew what I was looking at and him trying not to laugh out loud. The truck had serious electrical problems that revealed themselves less than a month after I drove it off the lot. I absorbed thousands in mechanic fees, which is to say that I put them on my credit card. I carried a four-figure balance through much of my 20s as a result of that one dumb purchase.
  • I left a secure job to start a new business in the middle of a recession. I’ve written about this before. I left my first real job to launch a magazine with the fellow who’d originally hired me, which was a sportsbet to say the least if we knew what was coming. This was in the early 1990s, at a time when the Canadian economy was mired in a brutal downturn. Unfortunately, it neither succeeded nor failed quickly. We slogged away at our business for about five years before I gave up. The first half of my first decade in the workforce earned me next to no money and did nothing for my resume.

There is a bit of good news in all of this: I recovered. Looking back, what’s most remarkable to me is that each of these three setbacks happened during the same decade. Thank goodness for the energy and optimism of youth.

I’m guessing Sabina will require less of each to be successful.

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walknutLeslie on

What I’ve learned:
=> Given the same income, you actually have more ‘cash’ flow when you have no debt; once I quit buying on credit and lived on cash, life was much easier. Took me decades to figure this out
=> Saving each paycheque, no matter how insignificant the amount, adds up and does as much for me psychologically as financially. Using the auto-save approach ING takes it outta sight outta mind. Took me decades to figure this out.
=> Like you, quit a job to start a business, and burned through all my savings and lived on credit cards before accepting this was a no-go. Very costly financial mistake, but to the positive, was a powerful learning & growing experience.
=> If you’re young, learn all you can about managing your personal finances–you are the only one who cares most about your money and your future. And, be realistic about what kind of lifestyle your income can afford. It’s not having what you want, it’s wanting what you have (Sheryl Crow). Took me decades to figure this out.

    Anchim glutki on

    good for you leslie, most people eagerly buy the idea that more debt equals more wealth, it does to the ceo’s whose companies you buy the stuff from.
    One has to fight the deluge of propaganda to figure out home truths today.

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