3 Classic Personal Finance Mistakes-Part 2
Earlier I stated that my first personal finance mistake was buying a brand new car. The second mistake I made was to have a preconcieved idea of what a young single professional’s lifestyle was like. As much as I like to believe that I am not influenced by media and my peers, I’ll have to admit I had preconcieved notions of what my life in a new city would be like.
I would call my decision to live alone after moving for residency my second personal finance mistake. This one was not as avoidable as the first but definitly contributed to my rapid debt accumulation. By renting a one bedroom apartment, furnishing it and paying for all the utilities alone I managed to add a second drain on my cash flow. This was slightly more unavoidable as I appropriately reasoned that it would be better to live alone than to risk living with someone I did not get along with or even worse, managed their finances worse than I did.
The costs of this decision are:
- monthly rent
- monthly utilities including the DSL, home phone, cable etc…. that I didn’t need
- credit card debt from buying furniture to furnish the apartment
In retrospect having a roomate to split expenses with would have greatly increased the amount of cash I would have had each month for all the things I should be doing like saving/investing. Since I am getting married at the end of this month, this will no longer be an issue, but I felt it was important to mention. It is something that many other people have addressed and can not be overstated. If you really want to accumulate wealth, don’t change your taste in lifestyle as your income grows. Although we all cannot live like college students forever there really isn’t any reason to increase our tastes in clothes/cars, etc.. either. (now if I could just find an apartment for the same price as my dorm room!!)
