My Worst Financial Decision
I've made plenty of bad decisions in my life but this one set me back further than any other.
My worst financial decisions could have been a lot of things. It could have been buying a house in the Alberta market back in the 07 - 08 boom, right at the top of the market, going through a divorce / separation with my ex fiance and having to end up selling that same property for a $35,000 loss. Each... That was pretty bad. But, there was one mistake, one decision that I made really, really early on and it came back to haunt me over and over and over again.
Back when I was 17 & still in high school, my dad bought me my first vehicle, it was an 81 Mustang. I had a car with no payments (This is key). Three years later, maybe two, I blew the engine on the car. I was fortunate enough that my dad bought me a second car ( yes we can agree I was spoiled ). It was my oldest sister's car which was a four door Dodge Shadow that had nothing wrong with it. Again, I had no payments. I drove that car for maybe a year or two and at the time I was a laborer for a construction company, a road building company. One of the guys I worked with got a brand new truck, well, not a brand new truck, but he got a new truck. I got sucked in by the fancy and I wanted a new truck, I wanted to keep up with the Jones', I wanted a fancy truck too. So, I thought to myself, self, you make more than enough money to buy a truck! I was making somewhere in the neighborhood of $3,000 a month, in the summertime. Enough money right? Here's the thing, road construction in Alberta (Canada for you out of country friends) only lasts about six months due to the weather. So, in the winter, I collected unemployment for the remainder of the year ($1400 / month). In my mind, I figured I made enough money to be able to buy a vehicle. So, I went vehicle hunting for the first time ever in life. I didn't have many people at the time that could tag along who knew a thing or two about cars and negotiating, so, I went at it on my own. First mistake.
“I got sucked in by the fancy & I wanted a new truck, I wanted to keep up with the Jones'.“
I ended up finding a truck for, around $17,000, A 1997 GMC Sierra, extended cab, 4 X 4. I thought it was awesome! I went to the bank and the lady gave me the loan, it was around $430 a month, which is crazy for a kid who was making an 30K or less a year.
*Reminder* - Anything You Own With Wheels Or A Motor, Shouldn't Be More Than Half Of Your Income
I shouldn't have had a vehicle payment that was $430 a month, on top of that, my insurance payment was around $330. I was paying $800 a month payment on a vehicle before I even got to putting gas in the tank or anything else. Anyone else think this is nuts? You better! It was absolutely crazy. I remember bringing that truck to my brother in law and my oldest sister house and being so proud.He said "Jeff, you take that truck back, it's a piece of crap!" There was no way I was taking it back. That was the first thing I'd ever bought for myself, or at least at that point I thought I had bought for myself. The bank had just loaned me the money to drive it. I didn't care if the headlight wasn't working & I found dog food in the hood (Can you say mice and farm truck...), I wasn't going to take. Dumb Jeff doing dumb things.
The real problem was I had a $3,000 a month income in the summertime. A $400 vehicle payment made sense to me at that income. As I got into the winter, employment insurance cheques were
only $1400 a month. (Anyone see a problem here? besides going on unemployment...). After paying $800 on payments and insurance, I only had $600 left over. Now, I should also point out I was living at home rent free so $600 should have gone along way. I unfortunately when I was younger really liked to spend money & I usually didn't have enough money at the end of the month. It became a real problem.
He said “Jeff, you take that truck back, it's a piece of crap!" There was no way I was taking it back.
After paying $800 on payments and insurance, I only had $600 left over. Now, I should also point out I was also living at home, rent free, so $600 should have gone a long way. Unfortunately, when I was younger, I really liked to spend money & I usually didn't have enough money at the end of the month. It became a real problem.
Now it gets ridiculous... I was desperate for money because I kept on spending all my money on crap. Even in the summertime when I was making $3,000 a month, living at home, I was paycheck to paycheck and I didn't have enough money at the end of the month. If I didn't have money to spend I would just use a credit card, no big deal right...?
I'm not proud of this & I may have only told my mom and my wife this (now everyone will know), but I was so desperate for money I used to go out in the middle of the night and I used to try and siphon gas out of other people's vehicles.... WHAT!!!! It blows my mind that I used to do that, it's ridiculous, for a truck! I did it for a truck, a truck payment! Please don't judge me for who I was but who I've become.
(Side Note: Siphoning gas, never worked for me. Bad with money, also bad with siphoning gas and being a criminal).
That truck used to break down all the time, I would fix one thing and then 8,9, 10 months would go by, I would have to fix that same thing again and it was just a repetitive course of the same thing happening over and over. My door wouldn't shut properly, or my starter would go or my fuel pump would go, A year later, my fuel pump went again, then I had to fix the door again. If I would've just kept the Dodge Shadow that I had, I would have been better off. Maybe not, who am I kidding, I likely would have just continued to spend that money on other things. When I finally paid off that truck, I thought, well, here's an opportunity for me to go buy another car. WHAT!!! Hold up, I didn't buy a brand new car... I bought a car that was a year old. Probably a year and a half into owning that car, the steering column went on it... Here we go again. Because I was still living paycheck to paycheck, I didn't have enough money to pay for the repair. I was too busy spending it on other things that I didn't need, like dinners and alcohol and car stereo equipment and you name it. I had to trade that car in and I had negative equity. I ended buying another crappy truck and that crappy truck, same thing, year after year after year, I would have to repair it and fix it.
By now, most of should realize that like a man I call my financial Jesus (Dave Ramsey), I too have PhD in D.U.M.B. & I graduated with honors. I finally was able to pay off that truck and I got rid of it. By This point I was married & you would think I would have learned my lesson about vehicles. Well, I thought I did, I did not. If I buy brand new that's better right? No Maintenance! We bought a brand new Volvo XC 60, it was around $56,000 and it we were paying $375 biweekly, $750 a month! I can't believe I paid that much for a vehicle.
After insurance we were close to $1,000 a month, $1,000 a month to run a vehicle is absolutely crazy, its nuts!
(I should mention by this point in time we had a household income of over $100,000)
Thankfully we payed that car off and a year early once we got on a plan, that we actually followed.
I thought, here's an opportunity for me to go buy another car. WHAT!!!
Here's the thing, I have learned and grown so much since we became debt free & even throughout our journey to get there. I will never, ever, own another vehicle that I have to make payments on. We will pay cash for a vehicle, there are no more payments. I know now what it's like to live without a vehicle payment and to put that money somewhere else and just be able to save up for a vehicle for the next time we need one. We still drive that Volvo, it's paid off with about 105,000 kilometers on it and we'll probably drive it till it has 200 which is another five or six years that we can get out of it.
Far and away, that first vehicle put me into a tailspin of just bad financial decision after bad financial decision after bad moral decision (see siphoning gas above). I couldn't imagine if I ever would have got caught, it would have ruined my life.
That's my story, that my friends, is my first blog. If you guys have something worse, I'd love to hear it. Even if you like to share your worst financial decision, I'd love to hear it.