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5 dumb money moves I've made

Even personal finance writers make money mistakes. Can you top these blunders?

By MSN Money Partner Apr 18, 2013 12:40PM

This post comes from Angela Colley at partner site Money Talks News

Money Talks News logoI have a confession: I am not a natural-born money genius and I didn't start off working as a personal finance journalist. I used to work part-time gigs -- retail, service industry, even a telemarketing call center.

Woman with a Bunch of Shopping Bags © Fuse, Fuse, Getty ImagesWhen I worked those jobs, I managed to spend almost everything I made. Then one day I realized I had to shape up, learn more about personal finance, and stop buying bobbleheads of cult classic film characters (OK, sometimes I still do that).

I'd like to think I've learned a lot, but I learned a lot of it the hard way -- through financial mishap. My biggest mistakes were actually money moves I thought were brilliant at the time.

Here are five things I used to think saved money, and why they were actually costing me:

1. Driving to cheaper gas

It started off innocently enough. My tank would run low and I'd start looking for gas signs. I'd see one for, say, $2.39 per gallon and then another for $2.38 right across the street. Wait a minute! I bet I could keep driving and find even better deals. So I'd drive another mile, then another, then I'd see a sign for $2.37 but convince myself I could find a lower price. Twenty minutes later and I'd wasted a gallon of gas trying to save 4 cents a gallon. That makes no sense.

You should comparison shop for gas but not while driving around. Instead, use a website or app like to find a cheap (and nearby) station before you head out.

2. Biting off more than you can chew

I have a love/hate relationship with my Sam's Club membership. The prices are great but there are only two of us and one puppy in my house. I learned the hard way that buying food from Sam's Club isn't always a good idea. For example, I bought a 10-pound bag of oranges for $6.98, or roughly 70 cents a pound. It was a great deal, but we couldn't eat them all and about 4 pounds went bad. In the end I wasted about $3 trying to get a great deal on bulk food.

Bulk food is a great idea if you have a large family or you can freeze and eat the food later. If not, I'd skip buying bulk fresh produce, dairy and other foods that don't keep. If you waste the food, you waste the money.

3. Over-investing in a new hobby

I have a bad habit of going full speed ahead with an idea before I actually commit to it. Take photography, for example. In college I saw a photojournalism exhibit and decided I was going to be the next Robert Capa. I ran out and bought a $399 Nikon camera and about $200 worth of lenses and other accessories. Six months later I realized photojournalism probably wasn't in my future, and the pricey camera found its way to a shelf in my closet.

I sold the camera and made most of my money back, but I learned a valuable lesson. When I picked up knitting a few years later I resisted the urge to buy $20 hand-spun organic yarns and stayed with $3 skeins until I knew it was a hobby I wanted to stick with.

Hobbies are a great way to spend your free time. Just make sure you're committed before you start buying high-end equipment. When you do, look for deals at garage sales, thrift stores and overstock sites online.

4. Reaching for more technology than you need

With so much technology out there, you can easily think you need more features, software or hardware than you actually do. I once bought a $2,000 laptop that was a designer's, gamer's, and Web developer's dream -- and I used it to run Word and look at YouTube videos. And then the hard drive crashed two days after the two-year warranty expired, so not only did I not use the computer for what it was made for, I paid $1,000 a year for it.

A computer can do a lot, but make sure you buy one that doesn't do everything unless that's specifically what you need. Are you just using it to check your email and browse the Internet for a few hours a day? If so, then you don't need a fully stocked computer. For instance, if you aren't a graphic designer, you don't need the latest edition of Photoshop, which goes for about $650.

5. Falling prey to sales

In college I hit the mall nearly every week. I didn't need new clothes, but I was getting a great deal because they were on sale. Do you see the failed logic there? I didn't need to spend any money, but I went out and spent it anyway because I was getting a deal. That isn't a deal.

To truly get a deal, wait until you need something and then buy it when it's on sale. Don't hunt for sales when you don't need something; you're just giving yourself an excuse to spend money.

Have you made any dumb money moves? Sound off below. 

More on Money Talks News and MSN Money:
Apr 18, 2013 8:00PM
Good article.

The only prominent thing that I can think I've done to actually waste money was to loan a friend $2000 so he could move in with me and go to college.  I thought it was a good investment, and that it would get him away from working retail the rest of his life.  This was 6 years ago, and he never did apply for admission to college.  I tried encouraging him every year, but eventually I graduated and moved away.  He's still there at the same job, with a $0.25 hourly increase since he started.  

Wise words from my mother (I wished I listened to her):
"Never loan money to your friends.  You'll lose your money and then lose your friend".
Apr 19, 2013 10:39AM
Who among us hasn't done something stupid!  LOL!   I once financed cheap furniture and the added $500 it cost to have it "Scotch guarded" for stains.  It only lasted 2 years and I was never really sure if they actually "scotch guarded" it anyway. LOL.  Years later I found out the chemical they "supposedly" used was cancer causing -- who knew?  That same year, I purchased a 10 yr old car w/an extended warranty which made the payments $100 higher.  I could have purchased a new car for the extra C note each month, or a lease for 2 C notes less!  THESE 2 MOVES ALL IN THE NAME OF PROTECTION!  Needless to say, I'm no longer as paranoid and now extremely savvy bout my dough.  WIth age comes wisdom!  Peace.
Apr 19, 2013 12:42PM

Dumb money move 1:  Exchanging unsecured debt for secured debt (aka cash out refinance or 'consolidation')


Dumb money move 2:  using credit cards for "emergencies"


Dumb money move 3:  Taking out retirement funds to pay off debt.


When you are having money problems is not a time to take on more debt.  You already are having trouble paying, so adding to the pile doesn't help.  Learn to do without on non-essentials...and for goodness sake, don't trade credit card debt for mortgage debt.  Credit cards can be discharged in bankruptcy if it gets really bad.  Mortgage debt requires giving up your property to the creditor.  Also don't take money out of retirement to pay off debt.  Retirement accounts are protected from creditors even in bankruptcy (plus you have to pay penalties to the IRS).  So keep your cash protected; once you take money out of retirement it is fair game for creditors.

May 4, 2013 4:57PM
Apr 20, 2013 8:56PM
Except what you fail to realize is many "foreign" cars have been made in the USA for years.  Their plants are all over the South.  Over the years, I've owned everything from a Ford Maverick to a Chevrolet Corvette.  In recent years, I've owned a Chevy Avalanche and Chevy Cobalt.  I've had the Avalanche since 2002 and still no tune up.  It's unstoppable.  The Cobalt is a 2008 sport, used mostly by my niece, and it is a peppy car with very good fuel economy.  It's replacement, the Chevy Cruze,  has an even better reputation.  
Even Consumer Reports recommends many excellent Canadian/American built old US brands this year.  The bar is higher than ever and the American brands are in the pack of well built cars.  Some of the poor cars included certain models of Japanese and German cars. 
My first Toyota was a 1976 Celica...wonderful little car but it really had some design problems in performance.  It wasn't my last Toyota, but the next one was very disappointing.  Things happen and I would buy another, but in recent years, just prefer the looks and good quality of several GM cars and trucks.  
Apr 19, 2013 12:00PM
How is a bad hard drive a waste of a laptop?  Get a new hard drive.  That is such a bad example.
May 4, 2013 4:35PM
Biggest money mistake was waiting almost 5 years after getting a solid job to begin investing in retirement.

First requirement:  Job
Second:   health insurance
third:  Fund that retirement account to the max each year no matter what

If you have great financial discipline, pay everything with credit card that that charges no interest unless you fail pay the balance...and always pay the balance even if you borrow.  If you have no discipline, buy a set $ amount via credit card each month, a very small amount.  

Great credit cards also give up 1-5 percent back on gas and purchases.  If you can't get one via your credit union or bank, Discover is a pretty good alternative but not as accepted as VISA/MasterCard and American Express.  
Apr 19, 2013 11:53AM

My biggest mistake was believing in Americans. Invested in General motors before the bankruptcy, lost everything. Never thought that the majority of the American public would rather buy a auto from a foreign mfg. instead of the mfgs. in this country. This point was validated, when in the cash for clunkers program, seventy percent of the new autos sold, were from foreign mfgs.

Will say it like it is. This country is doomed, because of the mentality, of the majority of Americans.

Apr 18, 2013 10:08PM
Nicely written. I too have made some dumb money moves, but mostly investing in vehicles. Most of my friends that invested in stocks/mutual funds have lost nearly all of their value,and now the direction I took toward hard assetts wasn't as bad as it appeared. I never pursued the gold markets, but they are diving too.Old rules don't seem to apply anymore, and nothing seems to be safe.
Apr 20, 2013 4:56PM
@ SOMEONE (YES MAN 259) the reason we don't buy American is because they are poorly made..don't last very long past 100,000 miles and we see new pieces about how the employees of the big 3 spend their lunches and breaks being effed up on alcohol, and pot and drugs..thats why I don't buy American and never will
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