The 7 Money Mistakes That Shaped My Life

Some say that the best way to learn a money lesson is to learn from your past money mistakes, after all, you live and learn! Still, no one wants to make money mistakes, but if you’re going to get anything positive out of a money mistake, it might as well be a lesson in becoming…

Michelle Schroeder-Gardner

Last Updated: May 24, 2023

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Some say that the best way to learn a lesson is to learn from your money mistakes. You live and learn! Here is how I learned how to manage money better.Some say that the best way to learn a money lesson is to learn from your past money mistakes, after all, you live and learn!

Still, no one wants to make money mistakes, but if you’re going to get anything positive out of a money mistake, it might as well be a lesson in becoming a better money manager.

Learning from your money mistakes is extremely important, because no one wants to make the same mistake again.

Sadly, though, that is what seems to happen for some people. It can be easy to fall into the same money mistakes over and over again if you do not stop to reflect and learn from your past money mistakes.

And, I’m not afraid to admit that I’ve made plenty of these mistakes in the past. I’m not perfect, and everyone has made them. Instead of running away from your money mistakes, I believe that it’s best to face them and learn from them, so that the same money mistake or something similar never happens again.

Today, I’m going to talk about the seven money mistakes I’ve made in my life and how they have shaped me into a better money manager. When it comes to money, I’m a very different person from just a few years ago. It just goes to show that you can completely turn around your financial situation by learning how to take control of your personal finances.

Related blog posts on money mistakes:

Here are some of the money mistakes I’ve made and what I’ve learned from them.


I took out extra student loans.

I didn’t take a lot of extra student loans out each semester, but overall, I ended up taking out a few thousand dollars more to use on everyday expenses.

But still, this is a mistake I wish I wouldn’t have made. I was working full-time, so I should have learned how to manage money better instead of looking at my student loans as free money to spend.

Due to having my high interest rate student loans, I’ve learned to never again fall into that trap. I know that student loans and other forms of debt (such as credit cards) are not free money and that you’ll eventually have to pay them off.

While this is a given for some, many, many people take out more student loans than they actually need and live off of the difference, even though they do not really need to.

Rather than adding to your student loan debt, you can always find more ways to make money or lower your expenses so you don’t feel the need to take out more high interest rate student loans to pay for your living costs.

Read more at How I Paid Off My Student Loans By The Age of 24.


I bought a brand new car at 18.

One of the biggest money mistakes I’ve made is that I bought a brand new car at the age of 18. Now, I don’t care if someone buys a new car, but not many 18 year olds can realistically afford a brand new car.

And, I definitely wasn’t one of those people who could truly afford one.

But, I did it anyways.

At that point, I had already been working full-time for a few years, and I must have thought that I was so awesome and deserved it, haha.

Well, I can now look back and say that my $400 monthly car payment was not awesome.

I spent a large percentage of my monthly income on my car payment, and it stung every single time.

What I learned from this is that you always need to be more realistic with your spending and saving. The $400 monthly car payment made me live paycheck to paycheck. I could barely afford anything else, but somehow I still had to manage other monthly costs, such as rent, food, going to college, and more.

It was tough and definitely not worth it. I would never want to go through that again and would have been much better off if I would have just bought a more affordable vehicle.


I waited to start investing.

I always say that the first thing you need to do if you want to start investing is to just jump in. However, what if you don’t even know how to start investing?

This is exactly how I used to feel. Although I used to be a financial analyst (I dealt with businesses, not so much on the personal side), investing my own money was always something that I was unsure of. It always seemed like there were too many decisions, too many questions about how to invest, and I was too scared to invest my own money.

Due to this, I put off investing and waited much longer than I should have. This was a mistake because I should have learned how to feel comfortable with investing earlier, rather than waiting and waiting and just letting my money sit in a bank account.

If you are like I was, and many others out there, you also may not know how to start investing your money.

Investing your money can be a scary, stressful, and overwhelming topic to tackle. You want to invest so that you can:

  • Retire one day.
  • Prepare for unexpected events in the future.
  • Allow your money to grow over time.

Read more at The 6 Steps To Take To Invest Your First Dollar – Yes, It’s Really This Easy!


I spent way too much money on clothing.

When I was younger, I worked at a clothing store for around 5 years and often spent more money on clothing than I would actually earn, even though I worked full-time!

We got a decent discount on what we purchased, so I just couldn’t pass up a good “deal.” It was really hard to not buy things each time I worked.

When I look back on the situation now, I can’t believe I survived without going into credit card debt. That was just a disaster waiting to happen.

I now hardly spend any money on clothing, and I’m happier than ever. I’ve learned to be happy with what I have and not to spend so much time and money finding things that are trendy, instead I focus on quality and things that I will actually wear for a long time.


I cared too much about keeping up with others.

I used to really care about what other people thought of me. And, I was always buying the latest and greatest because I thought I needed to.

I know this is a common problem for many.

Whether you are five years old and want that new toy everyone is playing with, or if you are 50 years old and are feeling the need to upgrade your house, car, etc., everyone has experienced wanting to keep up with someone else.

The problem with this is that keeping up with others can actually make you broke.

And, I used to be the same way. I used to care too much about the things that I owned, worrying about what other people were able to buy, thinking that I deserved things, and so on.

While this didn’t lead to credit card debt, it did lead to me having high monthly expenses and living paycheck to paycheck.

When trying to keep up with the Joneses, you might spend money you do not have. You might put expenses on credit cards to (in a pretend world) “afford” things. You might buy things that you do not care about. The problems can go on and on.

This can then lead to an excessive amount of debt and potentially set you back years with your financial goals, if not decades.

Now, I’ve learned to not care about what other people have, to not feel the need to compete with others, and I’ve learned to only buy what I actually want. And, I’m happier than ever.


I thought everything I was doing was normal.

Before learning to be a good money manager, I never really tried that hard when it came to my financial situation (at the time, I thought I was trying my hardest!) because I thought it was all normal. It seemed like everyone had credit card debt, student loans, a car payment, cable, an expensive cell phone, and more.

Due to that, I thought all of my money mistakes were just normal life and that I would somehow get through it because everyone else seemed to be managing similar choices.

Well, that was a big mistake. That all led to me living paycheck to paycheck and feeling financially stressed out.

I now know that I don’t want to be “normal,” especially if that means that I would never reach financial freedom.

Now, I want to retire early, travel full-time, be debt free, not keep up with others, and so on. It’s crazy how different I am about money and life from just a few years ago!


I took part in emotional spending.

Emotional spending is something I would take part in a lot. If I had a bad day, I would buy something to make me happy. To make up for my dislike of my day job, I would make big purchases and justify them by saying that I worked hard for the purchase.

Emotional spending is a bad money habit that many people take part in. It’s one you should stop now, because it doesn’t cure any problems.

According to NerdWallet, the average U.S. household (who has debt) has an average credit card debt of $15,611, and I’m sure some of that is due to emotional spending.

Emotional spending occurs for many different reasons. You may have had a bad day at work, a fight with your loved one, and so on. You might even be spending because you are so stressed out about the amount of spending you have done.

To end your emotional spending habit, I recommend:

  • Figuring out the amount of debt you have. You’ll most likely be shocked, and hopefully this will persuade you to change your spending habits and the way you deal with stress.
  • Understanding why you spend when you’re stressed. In order to stop stress spending, you need to really think about why you have this problem. Without understanding your problem, you might just keep falling into the same cycle over and over again.
  • Thinking about your financial goals so that you can stay motivated.
  • Finding different ways to deal with stress.
  • Sticking to a budget.

What money mistakes have you made? What did you learn from them?

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. I’ve definitely made some money mistakes. On good days, I pat myself on the back for educating myself and doing better lately. On bad days, I kick myself! My worst mistakes:

    1) Not protecting myself more financially as a stay at home mom. I know it’s often the reverse, but an unexpected divorce left me destitute. The good news is, I learned how to hustle and grew a hobby blog into a full-time business. I’m teaching my girls that if they leave the work force to raise kids, they should be investing for their retirement and insisting on setting some household money aside in savings for themselves. Divorce, disability, death – these things happen. And most (stats show around 85%) of child support cases are in arrears, so a divorced mom can’t rely on that to protect her kids.

    2) I regret ever getting into debt! While I’m proud that I paid off my debts as a single mom, I would have been much better off had I never incurred it in the first place.

    3) I regret selling a stock I once owned. I did it to pay off credit card debt, but that was short-term thinking. That stock would be worth thousands now, and I paid nothing for it (employee benefit). If I did sell it, I could have rolled it into index funds.

    Oh, well. When you know better, you do better. ๐Ÿ™‚

    I’ve been reading like a madwoman in recent years so that I can pass along a different legacy to my 7 kids. I don’t want them to make the same mistakes I did. I don’t even allow them to borrow money from each other. LOL!

    1. God bless you, Carrie. 7 kids. That’s amazing what you were able to do with business and paying off debt with 7 little ones. You’re quite an inspiration. Thank you for sharing this.

    2. Yes, learning how to protect yourself as a stay at home mom is so important. I wish more people realized that! Sounds like you are doing better now ๐Ÿ™‚

    3. I totally relate to you. I’m surprised I’m not worse of financially today. Risk management ws one of the major financial areas I negotiated.

      I actually took a chance and drove few months without auto insurance. One accident and it’ll be done. It’s unwise to say the least.

  2. Go Finance Yourself!

    I did the new car thing too. Right out of college and flush with cash, I bought a brand new car. Dumbest money mistake I’ve made, but I’m still driving that car 11 years later so I’m trying to make up for it!

    1. Good job on still driving it!

  3. For my wife and I, the worst thing we did was buy the biggest home we could afford in one of the most expensive areas in the country. We did this in 2011 after getting married and returning from our honeymoon in Ireland. We had a frugal, 10-person wedding only to be in thousands of dollars in credit card debt by 2016. It was a combination of decisions — some good, some bad — on both of our parts that lead to it.

    Ultimately, we were forced to move to cheaper area with a less expensive house. We made a good investment early on with a solid downpayment for the first home, so we were able to make money on the house and roll it into the new one. However, the arrogant decision to buy there in the first place still plagues us.

  4. Most of your mistakes are like mine. I still shut my eyes tight ever time I make my student loan repayment. I don’t even know what I needed such amount of money for. Sometimes I ask myself, how dumb could I have been to just borrow money like that and not think of when I will be repaying it?

    But your mistake on buying a brand new car makes me feel better somehow. Makes me feel like I’m more normal LOL

    1. Hahahaha glad to make you feel normal ๐Ÿ™‚

  5. I can relate to most of these for sure!
    One of my biggest mistakes was to assume right after college that it was a great idea to buy a house (because real estate is a great investment, right?). The problem was, we purchased it in 2006 right before the crash and now over 10 years later are still underwater on that mortgage.

    I think that a huge amount of financial mistakes come from assuming that because you’re “normal” it’s okay to be doing what you’re doing. Like you said, that leads to a lot of debt to be able to afford it all.

    I’m glad I have the financial knowledge that I can look back and laugh at my past mistakes and move on!

    1. Oh no! That really stinks about the house. We “thought” we bought after the crash but still lost money when we sold it in 2015.

      1. Gtiger

        But you did need someplace to live…it’s not all about the “bought it for, sold it for” balance sheet.

  6. I made all of these mistakes and more. At age 39 I find myself in $200,000 of debt but I also suffer from chronic illness and have medical bills and have been off of work for years several times. I’m starting a blog and other online ventures in my efforts to get out of debt.

  7. Michael

    Our mistakes / failures ought to get our attention more than our successes. As you point out, sometimes it does not – people go around in denial.

    In my case, I was the role model for the Jones’. I was reckless with my credit card spending and I am glad I woke up to reality sooner than later.

  8. Lisa

    I think the most dangerous mistake, at least for me, is believing that my money mistakes were normal. When you think of it that way, you don’t think there’s anything wrong until something huge blows up.

  9. Mrs. Picky Pincher

    Oh man, I was so bad about emotional spending. I had a really bad job right out of college and I was an emotional wreck. That meant spending every dime of my already-unstable hourly income. D’oh! I also went to a private (expensive!) university, bought a new car with three other car loans rolled into it, and didn’t save anything.

    I only got my act together once my paychecks started coming in late. Thank goodness I had the foresight to at least build a $600 emergency savings because I did have to use it.

    1. Emotional spending definitely gets a lot of people!

  10. Gary @ Super Saving Tips

    My biggest money mistake, which I wrote about on my blog, was investing a large sum of money in an unknown prospect being pushed by “family”. But there were other mistakes too, like keeping up with the Joneses and thinking my spending was normal. I didn’t learn until my late forties, but better late than never!

  11. Gloria Kaye

    Getting into credit card debt and some emotional spending were two of my money mistakes. My biggest one, which is so easily remedied is that I have always purchased a brand new car. I have in fact made this money mistake 8 times!
    I never wanted to worry about driving an unreliable vehicle that would break down and need costly repairs. I didn’t realize that there are many sensible options for pre-owned vehicles. I could have saved thousands of dollars off my initial car prices and monthly payments. Now I know for next time.
    Thanks for all the great reminders about money mistakes to avoid.

  12. David @ Thinking Thrifty

    Ahh keeping up with the Joneses, the curse of a consumerist world! The amount of pressure I used to feel to be out every week in case I missed something is ridiculous. And, of course being out three times a week meant I ‘needed’ new clothes, I couldn’t possibly have been seen out in the same thing too often. Thank God I gave my head a wobble and woke up!

  13. I think almost everyone has made at least on of the mistakes discussed in the post or the comments. I bought a brand new car as a teenager, then wrecked it five weeks later. Of course by then it had depreciated so much, even though it was totaled, I still owed a balance. I bought a very young, thinking it was my “forever” home and left two years later. I had to rent it out, and finally sell it. I was lucky to not lose too much. I had some equity in my next home, and refinanced to get that money back out for something that wasn’t necessary. Waited too long to start investing, etc, etc, etc. Once the mistake is made, you can only move on with better info, and know that you’ve learned your lesson! No reason to beat yourself up with it. Pass your knowledge on so others don’t do the same!

    1. Oh no, that really stinks! That happened to a few friends of mine as well with their new cars.

  14. Ha I think you just pretty much summed up everyones life right after high school in and into the college years. If only schools taught about finance beginning in elementary school, it would completely reshape the economy I think in the long run.

  15. 2 thoughts:

    First, my biggest mistake is not investing as early as I should have. My wife and I let a lot of money sit in a low interest savings accounts for too long.

    Second, I think all of these mistakes are common. I would even say most people make a lot more financially questionable decisions. Like you said about yourself, we should all strive to not be “normal”.

  16. Adriana @MoneyJourney

    Everyone makes money mistakes, but on the bright side, I think once you realize the consequences, you’ll be motivated not to make others!

    I’ve made many, but the consequences were.. bearable. However, there’s one financial decision I just can’t grasp: getting into debt for others.

    I have 2 close friends who have done it, deliberately took out loans to help family members. You’d think it’s a noble gesture when your own family is in financial trouble, but they both found themselves paying thousands in debt themselves, without as much as a ‘thank you’.

  17. I can’t think of any huge mistakes at the moment but one that bothers me was hiring a contractor for our home that ended up being totally shady. The mistake was I wrote him a check the day he finished the job. He cashed it immediately and then the work began falling apart and of course he went MIA. Now I vet contractors more closely.

  18. Finance For Geek

    Definitely some of the same mistakes I made early on!
    But hopefully, learning things the hard way is also what makes you improve and not repeat the same mistakes in the long-term.

  19. Thanks for sharing this Michelle! It’s inspiring to see these as a part of what got you to where you are now. Knowing how successful you are today, it’s clear that these mistakes were a part of your journey and that they certainly aren’t irreversible issues for other people who have made them as well.

  20. Yes, I absolutely borrowed more money for my student loans then I needed. I was working a great part time job, but I wanted the extra money “just in case”. I didn’t consider the fact that I’d now be paying $175/month in interest on that money that I didn’t even need.

  21. yes if you need you should borrowed.