The Big Money Mistake and the Weekly Round-Up

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I have been so happy this past week because I am finally starting to notice my bank account grow! The court mandated payments are over and since I’m so busy with school, my full time job, and this website, I hardly even have time to think about spending money! Just a couple of days ago, my account just broke the $5,000 mark. Already though, I am starting to think about what I can do with this money. Maybe a better looking car? Perhaps I could give the house a face-lift? Or, maybe it’s time to go on a tropical vacation!

The Big Money Mistake

What I just described above is the “big money mistake”. We’re not consistently spending money, and actually, we’re very good at sticking to the budget and building up those savings. But, when our accounts reach a certain dollar amount, we seem to think it would be wise to invest the money elsewhere. These days, it seems like many people are either choosing to use the money on a kitchen remodel or they’re buying a fancier car with the money. At the time, it seems perfectly legit to do so. After all, you’re not going into debt with these purchases. However, did you really need to spend that money? Just because you have it doesn’t mean that it should be spent somewhere. This is a lesson I actually need to teach myself.

The Car Replacement

I have been thinking about buying a new used car since my current 2001 Honda Civic isn’t the most exciting vehicle in the world. The paint is getting chipped, the headliner is falling down (I have tacks in the ceiling to hold it up), and the right front wheel-well is starting to rust. All-in-all, it is not my most favorite car to drive. However, it fits my needs so perfectly! I drive over 1,000 miles per month and based on my recent calculations, my car is getting 37.6 miles per gallon! Isn’t that awesome?! If I bought another car, not only would I probably get less gas mileage (which would cost me more money each month), but I would also kiss my bank account goodbye. The wise thing to do would be to keep my car for just a little while longer, even if society might think I should do otherwise.

Be Ready For Opportunity

The main reason to be financially wise and to put money in the bank is not just to avoid financial disaster, but it is also for investing when that perfect opportunity comes along. You never know when the next Michael Dell or Bill Gates will be showing up to your door with a partnership opportunity in their new business. Those individuals that had the money to invest a decade ago are certainly not hurting for money today. They saw the opportunity, had the money to invest, and benefited big-time from their preparedness.

When you have five grand or more saved up, don’t be afraid to tell your friends that you’re looking for an opportunity to invest in. Almost everyone knows someone that’s trying to get a business started. Perhaps the perfect chance will fall into your lap. You just have to let people know that you are looking. Save up that money and invest wisely. I can’t wait to hear about your successes in the near future!

 

The Weekly Round-Up

Since I’m not a narcissist, I don’t believe that my articles are the only ones that add value in the personal finance world. For that reason, here are some posts that I think deserve a little recognition. Hope you enjoy the reading! 🙂

The Best Way to Get Ahead is to Tell Yourself Hard Truths at Financial Samurai

Marketing Tips for Land Lords at Modest Money

How to Grow When Your Job Doesn’t Challenge You at aYoungPro

5 Rules for Using Credit Cards and Not Getting into Debt at Debt RoundUp

The Growth of Peer to Peer Lending at VisualFin

The Importance of Shopping Around at Narrow Bridge Finance

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Money

Derek

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

10 Comments

    • Even though I know about this money mistake, it’s still difficult to avoid it. Once I get up to $10,000, I’m sure the temptation to buy a car will be pretty great!

  1. Unfortunately for me am reeling from the dent left from such a big money mistake (broke the bank buying a high-powered pc) thought it would improve my work and all, looking back though…I should have just stuck to my old beaten up one…it worked perfectly…might just have to sell it, having cash is far much better, when real valuable opportunities come around, you hit hard 🙂
    Thanks for the mention Derek, always appreciated!
    Simon @ Modest Money recently posted..Prosper Review – Detailed Prosper Lending Review

    • At least you realize it now Simon. I bet you won’t make that same mistake again! 🙂

  2. Exactly! I’m always tempted to buy another car since mine is a 2004 Ptcruiser. Very tempting so I have to keep reminding myself that its not saving if you’re spending it later
    Monica recently posted..Frugal, Fun, Finale to the Summer

    • I decided to make some improvements to current car instead. The headlamps could use replacing and the paint could be touched up a little. $85 later and I feel like I’ve got a shiny new car! 😉

  3. You might be able to purchase a good used car for $10k, but as you mentioned, you could end up with higher expenses. This could become necessary, though, if your beater car is needing more and more expensive repairs. How is its reliability? If still good, then I would not buy a new car. I would not take out a car loan.

    I like to drive my vehicles completely into the ground. I only replaced my previous pickup truck because it could no longer pass the smog test and a new set of tires was worth more than the rest of the truck. It had 265k miles on it. I priced a rebuilt engine for $2k, but since the rest of the truck was falling apart, it was time for a replacement.

    • Good advice Bryce. My car is still amazingly dependable, so I know that I should hold onto it. I’ll probably look into replacing it next year.


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