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How My Financial Mistakes Cost Me Over $300,000

I'm outlining several of the largest financial mistakes of my life. Click here and hopefully you can avoid the same mistakes I made and save a ton of money!

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Hey there!  I’m about to get incredibly real with all of you.  The truth is, I’m 30 years old, writing about personal finance and helping all of you to achieve financial success!  Sounds pretty great, right?  That means I must have my crap together when it comes to my own personal finances right?  Well, I’ve got some news for you.  I’m no expert when it comes to personal finance!  I’ve made my fair share of financial mistakes.

Sure, I’ve got a Bachelor’s Degree in Business Administration with a minor in Finance and I’ve got the knowledge and drive to be successful and to give you all solid financial advice, but here’s the thing…

I’ve Made a Ton of Financial Mistakes

Up until a few years ago, I was terrible at managing my money.

Absolutely awful, and I made a boatload of financial mistakes.  (One of those wasn’t buying a boat, thankfully, although I wanted to do just that)!

So, here I am today on the brink of turning 30, ready to pour out my financial mistakes.  I’ve decided to write a letter to my 16-year-old self as a warning to avoid all of the stupid, idiotic things that I did with my money.

Hopefully, you will all be able to take this letter to heart and avoid these mistakes as well, since this will be solid advice for anyone, not just my teenage self!

I'm outlining several of the largest financial mistakes of my life. Click here and hopefully you can avoid the same mistakes I made and save a ton of money!

Letter to my 16-Year Old Self

Hey Robert,

This may sound a little strange, but this is the Robert of the future writing to you.  That’s right, I’m 30 now, so that’s pretty old right??

It may seem that way to you now, but I’ll tell you that the past 14 years have gone by quicker than what you could ever think.

You are going to experience a lot of things over those years including happiness, sadness, anger, frustration, self-doubt, joy, healing, and love, but I’ll let you enjoy all of those experiences to their fullest!

I’m not here to write to you about your experiences, but rather to write to you about money!

Why money?

We’ve made some big financial mistakes!

Well, the truth is that you and I, we’ve made a shit ton of financial mistakes.

Big ones!

Like, huge, massive piles of rocks falling down on top of you kind of mistakes.  Sound depressing?  well, it is kind of depressing…

There are times I look back and just want to slap myself, or maybe you, in the head!

Absolutely brainless moments in our financial history that brings us to the point we are at today.  A point where I am finally able to dig myself out of the holes created by years of dumb decisions and mountains of debt.

I know you absolutely hate listening to what anyone has to say and you are ultimately going to do whatever the hell you feel like doing anyway, but please take my advice here today.  After all, I’m you, so listening to me is really like listening to yourself!

It will make your life so much easier and as a bonus, you’ll have loads more money in your pockets when you’re my age!  Win-win for me and for you!

Dave Ramsey has some great advice on putting some extra money in your pocket too, that is if you’re into that kind of thing.

I’ll try to outline my advice in chronological order for you, but it has been a while and I’m so incredibly old, remember, so my memory isn’t as good as it used to be!  You’ll get the idea though.

401k Contributions

When you get your first full-time job with benefits, one thing you absolutely did right was to start dumping money into your 401k as soon as you were able.  You maxed out your contributions at 25% for about a year, and that was an awesome way to build up your account before you started getting more expenses.

I highly recommend that you open your 401k and contribute about 10% of your pay right out of the gate.

We’ll talk about increasing it later, but keeping this at 10% instead of maxing out at 25% will help you to save some money up for some of the other items on my list today.

Check out the Complete Idiots Guide to 401(k) Plans if you’re not very familiar with what a 401(k) plan is.

Student Loan Debt

After a few years of working, you’re going to plunge into an online course load.

You’ve got two decisions on how to approach this, and you chose to obtain your bachelor’s degree in about 3 years.  Commendable, but it does come at a cost.

You took out student loans which total about $60,000!! Ouch!

I’m still working on paying those back and it’ll be a few years before I’m able to get them fully paid back, so please, take that money that we talked about earlier and put it into a college savings fund for yourself.

Stretch your degree out over 5-6 years and give yourself time so that you can pay cash for your schooling.  This way, when you finish your degree, you don’t have $60k worth of debt to show for it.

Spoiler alert:  Your degree will pay off, so definitely stick with that plan if you are doubting whether it’s worth it.

Buy Used Cars

Do not buy vehicles that are more than $5-6,000!

Save up your money, pay cash, and save the tens of thousands of dollars that you’ll save on more important things.

Especially stay away from purchasing a new vehicle!  I cannot stress this one enough!  Thousands of dollars of your money gets washed down the drain with this one boneheaded decision.

Just don’t do it, you’ll thank me later.

Credit Card Debt

This one is extremely important!  I repeat, pay close attention to this one!


Under no circumstances, do I want you to open up a credit card.

You start off thinking that it’s a good way to build your credit, and next thing you know you’ve got $10,000 in credit card debt.

No worries, you’ll pay that off over time and get yourself back on track.

But wait, then you rack up even more credit card debt with your crazy spending habits.

You end up maxing out several credit cards, obtaining personal loans to pay off those credit cards, and maxing the credit cards out again.  Next thing you know, you’re 40,000-$50,000 in credit card and personal loan debt, with nothing really to show for it except a few material things, a couple trips, and a ton of stress.

I’ll give you one example.

On a whim, you decided to go on a 4 day trip across the country, and it wound up costing you about $7,000, all of which went on a credit card.

I’m not saying not to take those trips and do the things you enjoy, but what I am saying is that you need to be wise about your spending habits.

Don’t spend money that you don’t have, and plan in advance for the things you want to do so that you can save money and pay cash!

Not only will you still be able to enjoy life, but you’ll be able to have the freedom of not being under the weight of ten thousand dump trucks worth of debt!

If you’ve already got credit card debt, learn how to pay it off for good here!

Payday Loans

Don’t use payday loans.

Seems like an oxymoron with their outrageous interest rates, but here we are…

No matter how strapped for cash you get, you will not find a worse way to blow through money.

When things get that tough and you need extra cash, try selling some of your items around the house or picking up some extra overtime.  You will lose out on about $75 every time you take out one of these bad boys, and you’ll get yourself into a bad cycle that will only lead to more stress and financial worry.

Flat out, don’t do it!

Payday lenders are there for one reason, and that’s to take advantage of people in poor financial situations.  They make money off of your hardships.  Keep that money in your pocket and find other ways to make extra cash to get by.

Here are some great practical tips for helping get away from payday loans and bad debt.

If you took my earlier advice, you should already be in a much better financial position, with a savings account that you can fall back on in the case of an emergency.

401k Withdraw

Please don’t cash out your 401k.

Again, if you followed my earlier advice, you won’t be in a position where you’ll need to do this.  But there will come an opportunity for you that makes it really easy to cash out the 401k savings that you had been putting away.

Remember how you were saving 25% of your income into your 401k at one time?  Well, that was all wiped out with this one decision to pull your retirement savings out.

On top of that, you were hit with a hefty tax bill as a result and early withdraw penalties.

Crap!  All that money and hard work saving down the drain again!

At the time you made this decision, you had about $14,000 saved up.  A modest amount, but really good considering your age.

After a 10% penalty for pulling the money out, you were left with $12,600, which you used at the time to pay off a car loan.

Again, if you’d have listened to my advice above, you wouldn’t have had this car loan to pay off in the first place!  Not only that, you traded that vehicle in for a new car a couple years later and lost all of that equity.  Your entire life savings was literally wiped out and you had nothing to show for it except a shiny new car.

Now, about that $14,000…

Using this 401k calculator, that would have been worth about $26,000 today, even if you hadn’t saved another penny.  By the time we get to 60 years old, it would have been worth $261,000!!!!

Check out The Compound Effect, by Darren Hardy, for more information on using compound interest to increase your net worth!

Holy crap, I threw away $261,000 dollars with nothing to show for it…

Don’t do this!!!

Personal Budget

Make a budget and stick to it as soon as you start earning money.  I’ve learned that a budget is a great tool for managing your finances.  It helps keep your spending in check and plays a pivotal role in achieving your financial goals.

Without it, you’re just shooting in the dark.

Prior to creating a budget for the first time, I went through my monthly expenses one month and discovered that I had spent over $500 IN ONE MONTH on fast food.  That’s $6,000 in one year.

Please create a budget so you don’t make the same spending mistakes I have.  Use this budget software to make budgeting a breeze and check out How to Create a Family Budget for more helpful tips on creating a budget.

For help getting started, fill out your info below and I’ll send you a FREE monthly budget worksheet so you can get started creating a simplified personal budget.

Chapter 7 Bankruptcy Warning

I am writing this letter to you as a warning.

Because of the poor financial decisions that I made throughout my late teens and twenties, I had to file for chapter 7 bankruptcy.  There were some other factors that also played into this, but I’ll let you navigate those personal situations, remember we are just talking about money here today.

My credit went from an exceptional score near 800 to a score in the low 500s, and I’ve lost out on hundreds of thousands of dollars that I’ll never get back.



Me, Myself, You, and I,


Final Thoughts

Well folks, there you have my advice for my 16-year-old self.

In case you’re wondering, my divorce was the personal issue that played a large role in filing for chapter 7 bankruptcy, in addition to all of the terrible financial decisions that we were making.

I made many more mistakes than what I outlined here for myself, but these were the biggest mistakes that I’ve made throughout my late teens and into my mid-twenties.

If I could have avoided even half of these mistakes, I would have saved myself at least $300,000 by the time I retire, and likely much more as this is a conservative estimate.

If you’ve made some of these mistakes, or if you’ve made other mistake, no worries, there is still time and hope for you to repair your financial situation, just as I have done.

Take it from these millionaires who had previously filed for bankruptcy and went on to have great financial success!

If you are considering filing for bankruptcy, please consult a lawyer and check out this helpful guide that will give you way more information regarding bankruptcy than I could ever offer.  Do not take that decision lightly!

I hope you find the advice that I have for myself just as helpful for your own use.

If you were writing a letter to your 16-year-old self, what is one bit of financial advice you’d give yourself?

-Real Money Robert

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4 thoughts on “How My Financial Mistakes Cost Me Over $300,000

  1. Aww, don’t beat yourself up too much. By age 30, I hadn’t even made most of the financial mistakes I now regret 🙂 And it sounds like you’ve learned the lessons well.

    To my 16-year-old self: I would have given more thought to what I wanted to do career-wise, instead of doing stuff I thought sounded cool at the moment I had to pick my major. I spent too much time in school pursuing a degree I didn’t really want and don’t really use.

    1. I don’t beat myself too much over it. Lessons learned and moving forward with a focus on financial health.

      That is great advice for your teenage self. I think when we are younger, we don’t really realize the major life impacts of the decisions we are making such as which degree we choose to pursue.

  2. Hey man, if we only had a crystal ball right? But i’m with you, i’ve been in BK twice 🙁 so i guess with the money mistakes we’ve gone through, we’re an expert on what not to do 🙂 But good thing is, we now know better and can help others to not do what we did 🙂 Keep it real man and keep it up. Cheers.

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