Financial Mistakes I have Made in The Last 7 Years (Part 2)

Have you ever made money mistakes so dumb that looking back you wonder what was wrong with you? In Part 2 of this series, we look at two particularly silly mistakes I made earlier on. Read Part 1 here.  Read mine, and share yours in the comments section. Also, feel free to share additional lessons from my mistakes. We are all learning after all!

In the last post, we looked at the first mistake I made very early in my career, which sort of led to the second mistake as you will see below. Running a farm left me unbelievably broke! Every single cent I could spare went to keeping the farm up and running, and as a result, my personal expenditure and savings suffered. At that point, I resolved to get a credit card  to use for my household expenses, on condition that I would pay it all off at the end of each month. And this worked for some time, until I moved house (hint, this is the third mistake).

At the beginning, I didn’t have any credit card balances outstanding at the beginning of the month, and for that reason I didn’t pay interest fees. However, when I moved house, I needed some household items, and because I was optimistic my farming would turn around and repay me some of my capital, I used my card to furnish part of my house, which left me with a bill equivalent to one month’s salary.

That doesn’t seem like much, but when you consider I had regular living expenses, a loan, a farm, and now credit card debt, I was in too deep! I paid it off in 6 months, and learnt my  lesson:  never use a credit card for unnecessary expenses. It seems easier when you are buying, and you may have a sure fire plan of repaying it, but please, do not! Wait until you have the cash at hand, after all in most cases it isn’t an emergency.

Mistake number 3: Just how much living space do you need? To be honest, this has been a mistake for the last three years, till mid this year when I became a mom. I have rented houses bigger than I needed, because of a psychological need for space. Having grown up in a farm, I was unused to small spaces, and for that reason, living in a bedsitter (studio apartment), only worked for as long as my first pay rise, after which I moved to a 2 bedroomed apartment, then a 3 bedroomed apartment, then back to a 2 bedroomed apartment in a bid to scale down. To be honest, that is more space than one person needs! Here’s why I think single people should live in 1 bedroomed or studio apartments:

1. As a single twenty-something old person, you are just starting out in your career and therefore spending a lot of time in the office, your social life is active, which means weekends are spent out socializing. On average, say you spend 3 waking hours in the house during weekdays, and even 8 waking hours over the weekend. Let us even say 24 hours, assuming you go nowhere over the weekends. This means you spend about 39 hours per week in your house. For that period of time, a small apartment won’t feel cramped.
2. Hosting: My excuse for moving house was that I would need to be hosting my Mom in the city (she had relocated). While this may make sense for some people, most of us host so rarely, it may make financial sense to put your guests up in a hotel, than to incur a recurrent expense on an empty space that is used only rarely.
3. I need my space: To be honest, this is psychological, and it’s cheaper to just get over it. I am still living in the house I lived in before I became a mom, and now we are three (myself, my LO and our helper), and to be honest, the space is still sufficient.
4. A bigger house pressures you to buy more stuff which you probably do not need.

There you have it, my second and third PF (Personal Finance) mistakes. Keep it locked for the fourth and fifth mistake. Have you ever blundered financially and you would like to share with us? Do you think there are more lessons to learn from my mistakes? Please leave a comment with your thoughts.