t’s easy to focus on the success stories—especially when it comes to money. Who doesn’t want to hear about the multi-millionaire who rose from humble beginnings or the working woman who’s on pace for early retirement because she so successfully taught herself about the stock market? While these kinds of stories are motivating, they also provide an incomplete picture. Because many of us—even those of us who consider ourselves financially-savvy!—have made some sort of money move we now regret.
Our financial mistakes can be a source of shame. But they’re also often our greatest learning opportunities. Ahead, Girlboss speaks to three women about the biggest financial mistake they’ve each made and what they learned in the process.
I regret my ‘charge it to credit’ mentality
When I graduated from college I had almost $7,000 in credit card debt from three different credit cards. Today, I regret being reckless, just thinking I could kick the can down the road and make the balance magically disappear once I got a steady job and a nice salary.
I got my first credit card when I was a sophomore in college. At the time, I had a retail job and was able to make payments. But by my senior year in college, I’d opened two more cards. I was studying abroad and somehow thought I could rely on a credit card as almost a short-term loan.
In college, there are always a lot of social activities going on around you and you want to take part in them; it’s just what the culture is. A lot of people go to festivals together or they take vacations together. I’ll admit, I sometimes felt like there was this pressure to just be there. It was easy to not think much about the credit cards initially, especially when they had no interest for the first 15 or 18 months.
Soon enough, the end of those promotional periods started arriving. But I was already in too deep. After I graduated from college, I went through a period where I was unemployed and unable to pay off my balances. I felt I had little other choice, so I kept charging things to my card. Finally, one day I looked at my credit card balances together and it hit me: I was in trouble.
Once I did get a steady job with a good salary, I had little to celebrate. My initial plan of just loading things up on credit and paying then off once my job began wasn’t much of a plan. I suddenly realized how little I had to make payments with after accounting for housing costs and other living expenses.
These days, I look at my balances and every time I make a big purchase, I actually think about it like, “How long is this going to take me to pay off?” I’m so much more conscious now about where my money goes and I’ve started making some progress on paying down my debt. It feels less stressful when you know you’re being accountable for what you’re doing. It’s a change from living with something in the back of your mind that’s always bothering you. That’s the silver lining.
—Alice,* 23, account auditor
I regret the cost of my car trouble woes
I worked throughout my time in school and, as a result, had a pretty good grasp of how much money I was making and where it was going. But one of my biggest financial regrets to date is a bit of an ongoing problem. How do I make sure I’m not being charged excessive amounts every time I go to a car service provider? It’s one of those areas where I’m always afraid I’m falling into a stereotype about young women and cars—that we don’t know anything about them and can be tricked into paying excessive amounts for otherwise basic maintenance.
I try to do my research ahead of time, but when your car breaks down or you suspect there’s something wrong, there’s only so much you can do in a short period of time. My family doesn’t live close by and I don’t have someone to come along with me, either. It’s especially nerve-wracking when you’re in a hurry and can’t really take the time off work to stay and monitor what’s going on. (How would I even know exactly what they’re doing?) I feel like I’ve been overcharged time and again and even though I try to sort out the prices afterward, the situation changes when I go once again and it’s a new problem.
When you’re not familiar with the specifics of a situation and a trained salesman is talking to you and you’re all alone, it can be really intimidating. They’re so confident about their approach.
But these are solvable problems. Nowadays, I know not to be in a rush to get everything fixed and I probably shouldn’t go alone in the future. I also know that over time I will find mechanics that I trust and can always go to. So while I regret being in these situations, I’ve also seen it as a learning opportunity and I feel like I’m slowly becoming more confident. Slowly, but surely.
—Lisa,* 23, general manager at a technology company
I regret not understanding how taxes work for freelancers
In April of last year, I lost my job and I started volunteering with a company. Soon enough, I was offered a role as an independent contractor with the ability to work from home. I thought it was a great stop-gap opportunity to help me pay expenses while I looked for a new job. But I quickly found that this freelancer gig had become, in essence, a full-time job without any of the benefits or perks of being a full-time employee.
I kept chugging along until tax season hit a few months later and I went to go see the accountant I’ve been working with for years. That’s when I had my moment of shock. I’d been so busy working to make ends meet that I’d neglected to set aside funds to pay for my taxes. The net bill for my backlog of taxes and the penalty for lack of healthcare meant I owed the IRS upward of $5,000. I began tearing up and my tax accountant, sweet as ever, tried consoling me.
On top of the emotional turbulence I’d gone through the previous months after losing my job, working remotely, and finally securing something truly full-time months later, I now had to deal with the IRS. I couldn’t believe it. I’d heard about quarterly payments and setting aside funds, but I didn’t realize how quickly it could add up. And now, I was dealing with another level of financial anxiety.
I learned that even if you have a new job, you can still start in debt. You can still owe someone a big chunk of your paycheck and not even realize it. I now have to do a payment plan to repay my taxes but I’ve tried focusing on the positive. I started a blog where I began openly discussing my experience and that, in turn, has helped me connect with other freelancers and women running their own businesses. It turns out I’m not alone.
—Nicole, 30, communications strategist at a public policy company
(*Names have been changed.)