Decisions That Can Make You Bankrupt

Have you ever made a mistake with money?

Probably.

Did you make multiple bad financial decisions?

I did.

In fact, I made so many bad money decisions in a row that it almost bankrupted me and almost cost me my marriage.

bad decisions

What I’ve learned since I woke up and stopped being so careless with my money is that there is power in me telling the stories of my poor financial decisions.

When I tell someone how I once leased a new car to avoid buying tires on my old one and that it ultimately cost me about $12,000, I can see them feel less stupid about their own money struggles.

I used to be the guy with a good six-figure income that was enough to pay the bills but had nothing except a bunch of ridiculous stuff to show for it.

We Need “It”

For example, just before our great financial collapse, my wife and I went to a new high end furniture store here in Dallas. We didn’t really need furniture but this store had marketed their “steeply discounted” prices so well we felt that we owed it to ourselves to check it out.

After walking through the entire store we stumbled across this awesome grand-father clock. Instantly, we needed it.

I mean, what 22 year old couple doesn’t have a sweet grand-father clock in their house?

Us.

That’s who.

And we needed this $2,000 clock, that day. Our house would feel empty without bringing it home.

I had just made a big payment on one of our credit cards, so it had about a $5,000 available limit. It was no big deal to just put the clock on this 3.9% interest card and pay it off over the next few months.

No big deal until they swiped the card and it said “Declined”.

Uh Oh…

How could this be? I just made a big payment. My balance is half of what my card limit is. I called the company from the furniture store showroom and apparently, they knew that I was in big financial trouble before I did.

They had slashed my limit. When my big payment came in, they reduced my card limit to the current balance. All my other cards were maxed out. I had no available credit.

But… the grand-father clock… I want it…

The nice salesperson that had helped us that I had just met 15 minutes ago… I owed it to him to buy this clock. I had already picked out the corner in the house where the clock was going to go. I didn’t have a choice.

I pulled out my debit card and paid cash for the grand-father clock, using the money that was allocated for groceries, utilities, and that new car payment.

My pride wouldn’t let me leave without a grand-father clock that day.

I sacrificed what little financial stability we had left because I couldn’t walk away from a bad decision.

I thought I could out-earn my stupid financial decisions with my good income. I didn’t have a plan. I didn’t protect my money. I wasn’t saving anything. I wasn’t giving anything. And it almost cost me everything.

It took complete financial collapse for me to wake up and realize that decisions like these are why I had no money.

We developed a plan, worked hard, and dug ourselves out of a hole so we can save and invest and give the way we want to. It wasn’t easy, but necessary if we really wanted to make a difference with our finances.

Question: Has your pride ever kept you from walking away from a bad decision?

Leave your thoughts in the comments.

Casey Lewis is the author of the book Impact and the blog casey-lewis.com. He works as a financial coach and speaker, helping people put their finances in a position that allows them to chase their dreams and make an impact in the world. Find out what he’s up to on Twitter @caseynlewis. For useful tips on how you can get better with your finances, join his free newsletter.

####photo credit: YanivG

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Comments | 4 Responses

  1. says

    Money mistakes? Too many to list. I too kept my head in the sand thinking I just had to make more money to dig myself out of credit card debt etc. Worst mistake because I was too proud to reverse a bad decision? Buying a car I couldn’t afford. It took me two years to fully wake up and sell the car. During that time I lost $15,000 in value, not counting the interest I paid on the loan (7 years of course) and not counting the expensive service of $3,000 (yes, luxury cars do need 80 dollar oil changes). Adding up total loss was well over $20,000 in two years. Insane. Great article. Keep inspiring people to get out of debt. It’s hard work but it is so worth it!

  2. says

    Great post, Casey. How much time do you have to hear about my bad financial decisions? :)

    I bought a car that I knew would really be stretching my budget. I thought, “you’ll always have a car payment, right?” It was a bad decision and because I felt I needed the car and deserved it, it ended up keeping me from making a bigger dent in my debt. Oh, to be able to go back and make some different decisions! But, I am so thankful to be making better decisions now.

    • says

      I love meeting with people that say, “I deserve it…” I once had a debate with a car salesman who said, “you work hard, you deserve it.” I deserve to retire well. I deserve to be abundantly generous. My kids deserve for me to pay for their college. I don’t deserve Navigation and a sunroof that I can’t afford.

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