My Biggest Money Mistake!

Today I'm taking part in a blog swap. Read the post below and please check out my blog post over at My Family Finances.

John Preston is the author of the blog My Family Finances.  You can follow his latest writing by subscribing to his blog feed. He is also a weekly contributor for US News & World Reports’ My Money blog.

What you don’t know can hurt your finances. I learned this the hard way as a young adult and it has impacted my financial and professional life ever since. If I had to lay out all my money mistakes and pick the worst of them all, it would be that I got the wrong degree in college.

JP in Community College

Ask someone what degree would be a wise decision and you’ll get a range of answers like:

• “Do what interests you and don’t worry about the money.”
• “Go into nursing because old people need lots of help getting out of bed.”
• “Teaching history is where it is at because you never need another math class and you get summers off.”

I know this, because I asked the question quite a bit. Neither of my parents had really attended college (my father had a fire science associates degree) and I really wanted to make a smart decision. I decided the smart thing to do was to the local community college and see what classes I found tolerable.

It was very wise, because I took three years and changed my major each year. My problem is that I didn’t really update my thinking to match the realities of the professional world.

Off to Four-Year School

By the time I headed off to a four year institution, I finally figured out what I wanted to do. I wanted to work in corporate finance. I also had a strategy. I knew that a business degree was too broad for corporate finance. I also knew that many finance majors found their way into financial sales; that’s right, your family member that’s always trying to get you to rethink your life insurance policy.

So feeling wise, I chose economics, because it was:

1)      Hard

2)      Not related to financial sales in any way.

What could go wrong? Economics is fun!

Wait! What About an Accounting Degree?

What I haven’t confessed to you at this point is that I also nixed the idea of going into accounting. I’d taken a few accounting courses and all they taught was bookkeeping. I couldn’t stomach the thought of working in a world where you record money every day. Who’d want to work on their checkbook for 8 hours a day?

I didn’t know that this is not a realistic view of accountants. Over the last twenty years, accountants have been filing into corporate finance roles. While any business degree could get you into the world of corporate finance, it’s the CPAs that are ushered in at the head of the line.

However, I knew no accountants to contradict my unrealistic expectation. Instead of seeking one out, I bet on my assumptions about an economics degree. How do you think it worked out for me?

I Graduated and Couldn’t Find a Corporate Finance Job

Upon graduation, I began the task of applying to every finance job I could find. To my disappointment, the only job offers I received were for financial sales. Luckily, I landed off course from corporate finance and into the land of banking.

Fixing my mistake meant working on an MBA in accounting and several tens of thousands of dollars spent on additional education. I’ve since landed in corporate finance, but still feel like I’m slightly off course having never been able to fully meet the requirements for a CPA.

When you consider a year of lost income and the extra money from my MBA, I spent roughly $50,000 fixing my wrong degree mistake.

Have you spotted my mistake yet? I knew that it was smart obtaining information to make a wise decision about a degree, so that’s what I did. However, I also didn’t look at all the information. I checked off a few potential paths, but wasn’t thorough in my decision making. In life, cutting corners in the decision-making process is going to lead to mistakes. It did for me.

What about you? Have you ever cut corners in financial decision making?

How did it work out for you?