Dumb Money Mistakes I Made in 2013

I’ve been leveling up my frugal skills for years – I’m well beyond newbie money mistakes like lunches out, expensive TV habits, and retail therapy, but even us high level frugalists mess up occasionally.  My biggest doozies tend to be related to travel.  When I’m in a strange environment, my usual habits don’t serve me.  I’m buying things and services I don’t normally buy, and there’s a lot of opportunity for screw ups.

In celebration of 2014, I’m rounding up the dumb money mistakes I made in 2013!



Ready to learn from my money mistakes? Let’s start with the biggest:

Didn’t invest my emergency fund: -$6300


My emergency fund sat around earning zero interest in 2013.

Technically, I didn’t lose money, but I missed a great opportunity to earn some. The market climbed in 2013, but I kept my emergency fund ($35,000) sitting in my no-interest Capital One 360 account “just in case”. My Vanguard investments enjoyed a 18.4% rate of return, and my emergency fund missed out!

My obsession with readily accessible cash cost me about $6300 in appreciation. If there was an emergency, I could have sold off some of my investments and retrieved the needed funds.

In the eight years since I established my own home the worst “emergency” I’ve ever seen was for $8,000, when I got a job on the other side of the country and needed to move.  The second worst? That time last year when I paid $3,500 to fix a broken water line under our driveway.  My fund is too big – and too idle.

This year:  I’m shrinking my emergency fund down to $10,000 and moving the rest into a diversified collection of Vanguard funds.

Flightseeing puke-fest: -$800

A spur-of-the-moment decision to go on a flight-seeing tour in a small aircraft left us both puking and ruined our day in Denali National Park.  We didn’t even see the mountain!  We were face-down in our puke bags for a view… of clouds.

This year:  Eh, this mistake was pretty one-off, but the moral of this story is probably to not go flight-seeing. Lesson learned.

Paid for unused landline: -$600

dumb money mistakes in 2013 landline

Paying for cell phones AND a landline – now that’s stupid.

We spent 2013 paying for two cell phones and a landline – that’s one more line than we have people.

We had the landline for two reasons:

  1. Verizon told us we had to have it in order to have FIOS when we first got the house hooked up with service
  2. We liked using our Plantronics headset with it for hours-long calls home on the weekends

A $17 TTY adapter from the Apple store let us use the Plantronics headset with our iPhones, ruling out need #2. But what about #1?

Well, we tried to cancel the Frontier landline back in February but Frontier said they couldn’t do it.  Fast forward to December 2013 when we were feeling angsty about how much we were shelling out for a landline we weren’t using, and tried again – this time, canceling the phone line but keeping the FIOS was no problem.

Why the inconsistency?  Paying for three years of phone service we didn’t need and rarely used cost us $50 a month, or $1800 total since the purchase of this house. Egads.

This year:  The landline is canceled and I’m looking forward to the $50 in savings each month.

Overpriced Hotel Stay: $-260

I bought into the “moderate hotel” hype at Walt Disney World.  We were going to stay at a Disney value resort, but decided at the last minute to go with a moderate hotel thinking the extra $260 would entitle us to comfortable beds and a quiet room.

That didn’t happen – our  hotel sucked.  Port Orleans Riverside has springy flat beds, incredibly loud flush toilets, and just as much noisy foot traffic as anywhere else I’ve ever stayed.  Now, I’ve never stayed in Disney’s value resort, but I can’t imagine the bed or noise being much worse.

This year:  Eh, we’re done with Disney for a few years, especially since the new FastPass+ system spoiled it, but if I went again I’d stay at a value resort.  It can’t be much worse, and the same Magic Hour and free parking perks still apply.

Didn’t scrutinize rental car receipt: -$224

Dumb money mistakes I made in 2013 Dollar Rent a Car rip off

Hidden charge by Dollar Rent a Car for $224 was expensive and anger-inducing.

We were scammed by Dollar Rent a Car in Orlando with a bit of receipt trickery. We declined an expensive add-on, but they sold it to us anyway without our knowledge. Had we unfolded the receipt when we accepted the vehicle, we might have discovered that Dollar sneaked in a hidden charge for an unnecessary $28.99/day “Loss Damage Waiver”.

Update: I got my $224 back, but not without having to complain a lot on Twitter like a crazy person.

This year:  I won’t leave the rental desk until I’ve read every. freaking. line on that receipt. AND THE BOTTOM! AND THE BACK!

Wasted money on in-game purchases: -$210

I work in freemium video games, so there’s some work-related pressure to play along (and buy in-game stuff), but not to the extent that I got carried away. I spent a whopping $210 on in-game stuff over the course of early 2013.  It was fun to win, but it wasn’t fun to be on a never-ending treadmill that pumped out content faster than I could play it, creating an incentive to spend.

This year:  I quit playing. It’s not fun to be hounded for cash just to keep up.  Most of my gaming right now is in premium games, where the first purchase is the only one, though I think freemium can be done well (2011’s Tiny Tower remains my favorite example of freemium done well).

SimCity: -$70

What has EA done to my favorite franchise?  And had I waited 6 months to buy it, I could have gotten it for 40% off, too. It didn’t even run at launch! Stupid.

This year:  Hehe, maybe they fixed it by now. I think I’ll hop in and check it out. :)

Didn’t Sign up for Company 401k

I started a new job in February 2013, but the company doesn’t let employees open a 401k and distribute pre-tax earnings into it until they’ve worked there for 90 days.  Needless to say, I forgot to sign up.  My last two jobs let me sign up for the 401k at the start and I contributed the max and the whole thing ran on auto-pilot, but this new job wanted me to remember to sign up later. Nope, I forgot about it for six whole months.

The impact of forgetting to set this account will be minimal, but I feel pretty silly.

This year:  I set up my automatic 401k contributions in December, which is just in time for the company 4% match to kick in at the start of my second year with the company.  Hooray!

In Conclusion

In writing this, I’ve realized that my money mistakes come in two varieties:

  1. Trusting a company to be honest with me about whether I can opt out of what should be an optional service.  The hard lesson here is no one cares about my money as much as I do.
  2. Thinking a “premium” experience is going to be worth it.  In effort to get “the best experience” (be it a pricey flight-seeing tour, a better hotel, or upgrades in a game), I think we just set ourselves up for disappointment.  Jim and I don’t seem to enjoy “premium” experiences, they never live up to our expectations and we just end up feeling like we wasted our money.

How about you?  Any shameful spending in 2013 you’d like to fess up to?  Tell us about it in the comments!

How to Survive When Life Suddenly Gets Expensive

Typical budget advice goes along the lines of “set aside X dollars for Y each month”, and “don’t exceed your spending cap”. But life isn’t predictable.  Or at least, mine isn’t.  Mine’s more like: spend spend … dry spell … spend spend … dry spell … OMG, EMERGENCY! SPEND! SPEND!

June brought us some nice new things… and some budget spoilers:

– $1000 couch (planned – couch budget was $2500)
– $1200 TV (planned – bought with leftovers from couch budget)
– $600 car insurance payment, which is billed every 6 months (planned)

– $225 for nine inch nails tickets (surprise!)
– $520 on a dental crown for me, yay :(  (surprise!)
– $900 on a root canal (surprise!)
-$300 removal of two cysts for me, yay (surprise!)

Holy medical and dental batman, and that’s with insurance coverage for medical and dental.

A common thread: All of the surprise items came with a time imperative.  I’m can’t ignore “my-face-is-melting” pain just because I didn’t know to budget for a root canal it going into the month, that’s nuts. Time imperatives are where debt is born. A problem needs to be solved right now, and there’s just no waiting.  The only thing that can save you (and your budget) at that point is a well stocked emergency fund.

Savings vs. Emergency Fund

You must build an emergency fund, because shit like this happens at the worst times.  It’s a rule of the universe: you lose your job, then a major appliance breaks.   You need dental work and your favorite band ever is suddenly touring and tickets are 100 bucks a pop.

“Emergency fund” is a term that gets bandied about a lot on personal finance sites, but I think it’s easy to confuse “savings” and “emergency fund”.

What’s the difference between savings and an emergency fund?

  • Savings = money you “flag” (mentally or physically by moving it to a special account) as being for a certain thing.  You might set aside money for something abstract, such as “the future”, or something concrete, like a piece of furniture, anticipated medical expenses, or perhaps (if you’re super lucky) a vacation.  It’s not “emergency fund” money and you should think of this as money you spend very deliberately at some point in the future.
  • Emergency Fund = money you keep “just in case something horrible happens” is your emergency fund.  You don’t know what this money is for, but when you need it you shouldn’t be raiding your “future” fund or your “new couch” fund to cover the emergency.  This is for the completely unexpected: you get a flat and need a new tire. You need emergency dental work. An appliance in your home breaks.

How much should be in the emergency fund?

Well, this one’s going to vary person to person, based on location and standard of living, but if I had to put a number on it I’d say $4,000.

Why $4,000?

  • It’s enough to cover you if  dental work and car repairs decide to screw you simultaneously
  • If you’re a homeowner, $4,000 will replace any major appliance except perhaps a furnace
  • It’ll also cover a $3,500 water line, should yours blow up right after you lose your job
  • For many people, $4,000 might get you through two whole months of rent/mortgage, basic utilities, and food (more or less, depending on your cost of living)
  • It’s a down payment on a replacement vehicle if something happens to yours

Having $4,000 set aside but immediately accessible for “whatever crazy shit happens” is what makes me comfortable – your own number might be higher or lower.

Where to keep it?

I keep my emergency savings in the checking account I share with my husband.  The money doesn’t earn interest, but it’s readily available.

My Savings and Emergency Fund in Action

New Couch & TV – from savings

The couch budget was about $2500 worth of savings that we’d set “tagged” as being for a couch we could both fit on at the same time.  After 6 years of sharing our too-small sofa we decided we deserved a nice piece of furniture that could meed this basic need.

In the first week of June, we got a fantastic deal on a huge couch we loved from IKEA.  Rather than sock away the rest of the couch budget into regular savings, we splurged on a new television.  Probably not the most frugal thing to do, but we were feeling saucy after saving so much money on the sofa itself.

Had all the surprise dental work come earlier in the month I doubt we’d have gone couch and TV shopping, but alas, we suck at seeing the future.

$2200 from savings.

Nine Inch Nails tickets – from savings

Omg, I can’t miss NIN.  Spending money on experiences is said to be better than spending money on stuff, and NIN shows are one of my most favorite experiences. For me, frugality is about “what can you do without so you can afford the things you really want?”.

This is what savings are for, I told myself as I bought a pair of very expensive concert tickets.  I know I’ll have a great time, and hey – at least this time we’ll save on train and hotel tickets since nin’s actually playing in our city now that we live by Seattle.

$225 from savings

Car insurance payment – from savings

I hate this expense but there’s not much avoiding it. A car is necessity for us right now, and while I shop insurance quotes every couple years this is still the best rate I have found. I won’t plug my insurance provider here – at $1200 a year for two ordinary vehicles and two drivers with perfect records, they can spend some of that on their own advertising.

$600 from savings.

Dental work – from emergency fund

My dental work came out of nowhere.

I found out in May that I would need a crown to attempt to salvage a cracked molar, but I wasn’t told the cost until the day of the procedure.  I suspect this is a common tactic. Once I’ve gone through all the trouble of establishing myself as a patient of a dentist, setting up an appointment and getting the time off work, I’m unlikely to walk out of the office after hearing the price and just begrudgingly pay it.  After all, I was in pain.

There must be a way to price-compare procedures across dental offices. My parents tell me crowns run them about $900, not the $1400 my dentist charged me (which was reduced to $520 after insurance kicked in and after I didn’t need a portion of the procedure they thought I would need).  At that price difference, I could fly to Illinois for my next crown and still have money left over.

What I didn’t know was that I would need a root canal after that crown.  The crown made the pain worse, and while that was a known possible outcome of the crown procedure, I was pretty cheesed that my pretty new crown had to be drilled into and filled afterwards.  Next time, root canal goes first.

$1420 from emergency fund.

Medical bills from emergency fund

I had a couple cysts cut off my right pinkie finger and my right ear in May.  Nothing major, just little lumps that were painful when pressed.  That was in April, a procedure which I paid a $20 co-pay for. I sort of expected that to be the end of it. Then I got a $300 bill in the mail in June.  This is a symptom of the dysfunction that is our medical insurance system here in the United States.  You don’t get to know how much of a procedure is covered and what the cost will be until after you buy it.

$300 from emergency fund.

Moral of the Story

Your emergency fund will save your ass someday.  Plump it up with regular feedings!  My emergency fund provided a cushion for unexpected expenses so normal expenses and planned purchases were able to happen regardless of any crises.

Thanks, past self, for setting aside the cash for this stuff. :)

Related Advice: 

Financial advice to my 22 year old self

I’m almost 30 now which gives me License to Dispense Advice. Home improvement, life optimization, and financial security are a trio of BFFs. Sometimes alliances shift, but ultimately they’re inseparable.

At 22 I was just starting out.


Me at age 22 dressed up for work

I just got my first “real job” (full time pay just above minimum wage, but with health coverage!) and I moved away from home for the first time ever to a 1-bedroom apartment some 45 minutes from where I grew up. I now had grown-up things to do, like buy groceries and wash my own clothing.

I managed to do pretty well in the intervening 8 years, but here’s what I would tell myself:

1. Maximize your entry level income

Money doesn’t buy happiness, but it does buy everything else.

My biggest regret: I wish I had negotiated my first salary. I didn’t have the confidence to ask for a little more because I had no idea how good a candidate I really was.

Let me tell you this: every company I’ve worked for has been careful in their hiring. Phone screens, all-day interviews. If you make it to offer stage, you are a good candidate and we want to hire you. Asking for a (reasonable) increase over the offer at this step is likely to succeed.

I did not negotiate my first job’s salary, but I did:

  • successfully negotiate my first raise at my first job
  • successfully negotiate a higher starting salary at my second job
  • successfully negotiate a and a higher starting salary at my third job

I have found it easier to increase my income by changing jobs and negotiating a larger salary upfront. Feel how you will about what this means for the relationship between employees and employers, the fact is this is the game and this is how it’s played.

Things you can do at your current job:

  • Be a top performer. If you can’t identify the person in your organization they’d lay off before they got rid of you, you’re it!
  • Keep track of your accomplishments! When review season comes along, you’ll have plenty to say about your contributions to the company
  • Outright ask for more at raise time. To be frank, I’ve had mixed success with this one. I’ve succeeded at it once, but every other time the “raise pool” was locked at some fixed amount for the department and couldn’t be negotiated. What I did have success with, though, was working for an excellent manager who negotiated larger portions of the raise pool for his top performers.
  • Keep your resume/portfolio up to date and loaded with accomplishments.
  • Remember, it’s a business relationship. Don’t become emotionally invested in working for your company. Your employer will dump you the second they need to in order to make their numbers. It’s not personal, it’s business. Likewise, you need to be ready to dump them if they aren’t paying you a competitive wage.

Things to do when you change jobs:

  • Consider cities better for your industry. A thousand times this. Moving from the midwest to the west coast was the best career decision I’ve made.
  • Ask for moving expenses to be rolled into your salary instead of taking them as a lump sum upfront. I got a $3k annual increase doing this, and it was a gift that kept giving year after year
  • Just outright ask for more when you get an offer. Cite increased responsibilities, your amazing performance record, anything that justifies your argument. The Internet is full of advice on how to phrase this. This has been my most successful tactic for increasing my income.

One last word on this topic:

Don’t get your heart set on any promises of bonuses or profit sharing. Your game is salary. Salary is consistent, reliable, and your salary history will follow you to your next job. Bonuses are not reliable income and in many cases, they don’t materialize. If I had every bonus I was reassured was coming, I’d have thousands of dollars more in the bank.

2. Learn how to prepare food you like

This will save you thousands and thousands of dollars over your 20s alone. This will also save you time, and will probably keep you thinner than you would be relying on takeout and restaurants.

Start simple (chicken roasted in a pan!), work your way up (homemade cake!). Don’t run out and buy a shitload of exotic cookware. You’ll feel bad when you give it all to charity 5 years later, hardly used.

3. Don’t buy DVDs / entertainment

I’ve lived without television service for 7 years. I don’t miss it (your mileage may vary) or need it. I don’t want to sound like a crazy media-hater, and I’m not. Hell, I work in entertainment. :D I just find that I have plenty to entertain myself with using only Netflix streaming and the Internet.

At roughly $100/month x 7 years, I’ve saved $8400.

DVDs frighten me. Next time you’re visiting a friend who has a ton of DVDs, try to estimate how many and multiply it by 10. That’s how much that collection cost. DVDs are sold everywhere and are seemingly inexpensive. It’s easy to “just $10 bucks” your way into a serious pile of cash spent on movies you’ll never have enough time for.

4. Drive your car into the ground… gently

A rule of thumb I heard somewhere: driving the car you drove in college when you’re 30 is a sign of financial well-being.

I acquired my first car at age 19, and I still drive it 10 years later. I love that it’s paid for. I love that it still looks new inside because I didn’t crap it up with food wrappers or junk. Take good care of your vehicle – and keep it as long as you can.

  • Park in covered parking as often as you can: Doing this reduces the odds of it getting pooped on / hailed on / baked in the sun. Plus, the covered parking is where people with nice cars park. They won’t throw their door into your car.
  • Don’t eat in your car: A “no food” rule will keep your car cleaner and nicer smelling. Plus, eating in your car is sad. Eat at a table or on a sofa in front of a favorite show, it’ll do you good.
  • Vacuum its interior regularly: You’re less likely to want to crap up a car that looks and feels nice.
  • Park far from other cars: The extra walking is good for you anyway. If you have to park near other cars, try to park it next to an expensive car.
  • Wax it regularly: This one’s somewhat debated, but twice yearly waxes seemed to work for mine.
  • Rent a car for long trips: Depending on season and location, you can often score a rental for as low as $12/day. Put all the wear and tear of a road trip onto their car, not yours.
  • Don’t do stupid things in your car: I used to try to make my car airborne when going over a particular set of train tracks that seem designed for the trick. Wait, I still do this. You’ve got to have some fun your car!

5. Wake up way earlier than you need to

What makes this financial advice? Because it helps make you awesome at your job.

Being somewhere (like work!) on time is the easiest way to succeed ever. You don’t want to be known as someone who oversleeps and comes into work late. That’s not the path to promotions and raises, even if you’re the best worker in the office. Someone will hold this stupid thing against you, so just get it right – it’s easy.

When you’re accustomed to waking up earlier than you really need to, you have a buffer zone. If you oversleep, you can still make it to work on time. If you need to run an errand, you have a block of time. If you don’t need to do anything and you’re up early anyway, exercise. Read. Accomplish something. This is your time!

By doing what’s most important to you first thing in the day, a bad day at work or working late can’t ruin it.

6. Open a savings account as soon as you earn income

Savings are the best thing you can give yourself. Having a big pile of money saved up lets you do awesome things like:

  • Quit a shitty job
  • Move across the country for a better one
  • Buy a Nice New Thing once in a while
  • Not live in an utter state of panic

You want options, right? Then open a savings account and put money in it.

Set up automated transfer out of your checking account. Without any help from you, this humble account will receive money and grow in size. Get addicted to that feeling of reaching a milestone. $1,000! $5,000! Can you reach five digits? Six?!?

Here, I even broke it down into steps:

1. Go to https://home.capitalone360.com/ and open a 360 Savings Account. It’s free.

2. Connect your new Savings Account to your existing Checking Account

3. Wait a couple days for the accounts to link up

4. Set up an automatic transfer so money goes from your Checking Account and into Savings Account without you having to lift a finger

7. Open an IRA investment account

These are fancy words but the concept is simple. Every year that you earn income, you can set aside up to $5,000/year in a special account called an IRA (individual retirement account).

You won’t be allowed to contribute to past years, so put as much in as you can (up to the limit) each year. Start as soon as you are earning money. My IRA is with Vanguard in their Retirement 2050 fund. I highly recommend them, and this fund, as it seems to turn a small profit each year.

I would have lost years not contributing to my IRA if it wasn’t for my boyfriend (now husband) who insisted I open an IRA and spelled it out for me. I didn’t think I had money to sock away like that. I opened the account, and I put a little in every few months. I didn’t make it to $5,000 my first year, but once it was habit it became easier. I met my IRA savings goal every year since. I now have $45k socked away for retirement in that account.

That’s pretty cool, especially since the earlier your money goes into the market, the longer it has to earn money (interest), which then gets rolled back into the investment to make even more money. It’s like earning money for doing nothing.

29-year-old me says thanks 22-year-old me!

8. Continue to develop your skills

Learning didn’t end at college graduation – it started.

Once I was on my own I struggled with inspiration and general despair over how much of a burden working full time placed on my ability to build my skills (artistic and otherwise). It was quite a shock going from developing my talents 24/7 to selling them to an employer 40 hours a week. I endured some inspirational droughts as I adjusted, but over the long haul, this was an essential step. Learning how to invent my own free time projects and challenge myself to learn new things outside of work was crucial.

Working on “hobby skills” gives me:

  • A clear sense of identity: I am much more than my day job
  • Something to work at: When I come home, I can work on any number of projects
  • Something apart from work: I don’t think about work at home, I think about my hobbies.
  • A safety net: When I was laid off, I had so many opportunities in so many directions I was nearly paralyzed. I could easily have reinvented myself as a freelance artist, a full time artist, a web developer, a writer, a fledgling programmer – I went back into game design, but if that ever dries up I’ve got numerous safety nets.
  • A side income: I sell plush, I freelance art. I can ramp this work up or down depending on my needs.
  • Something to talk to people about: Not that most people want to hear about it, haha.

Learn something outside of work. If nothing else, you’ll be more interesting than someone who communicates entirely in movie plots and Internet memes.

9. Don’t buy it unless you REALLY. NEED. IT.

Try to do without it for a week. If you can return it, buy it and hide it (don’t unbox it) for a week.

Did you survive? Did you even think about it? If so, you may not need it.

Did you think about it every day? Okay, you pass – go buy it.

You’re going to toss A LOT OF STUFF when you move, and no, not before you move. After you move. After you’ve paid thousands of dollars to move it. Because you moved in a hurry and it made no sense to toss things you thought you would need.

Your next apartment won’t have room and your house will have next to no storage space. Plus, most of what you bought when you were 22 was cheap junk because you didn’t earn much back then.

10. Marry Jim!

Okay, that advice is specific to me.

What I really mean is marry the right person (or partner with, if you’re in one of those shitty states that doesn’t yet let you marry the man or woman you love).

Your partner must be someone you can work with, someone you’re on the same page with in regards to money, how free time should be spent, what your hopes for the future are. Don’t move in with (or marry) anyone who falls short of those standards. Warren Buffett, who is super insanely rich, has said plenty on this.

Jim is my best friend, my co-conspirator, and my partner in everything. We work well together, and we’re on the same page financially. We agree on how much money should be saved and how much should be spent. This simple arrangement has spared us both the drama many couples get to live as they fight (and sometimes divorce) over money. I know it’s not super romantic, but it sure does simplify our relationship. I’m super glad I found him.

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