Debt Diva: Learning from Others’ Mistakes

People are funny. I have been working on a bare bones budget so I can eliminate my car payment and my mortgage in the next couple of years. This week, I adjusted my budget for gasoline prices.

My car was purchased new in June 2009 and has less than 20,000 miles today. Gas prices are impacting my budget. While they dropped two cents today, prices rose eighteen cents in two weeks. I mentioned this budget adjustment at work and my coworkers told me I really had nothing to complain about since I live 5 miles from my office and drive a small and reliable car. I asked how that changed the fact that gas prices will impact all of us by the same amount.

When I purchased my home, I looked for places within 10 miles of my office, with good schools for my children, a settled neighborhood, and I wanted to cut my commute to spend more time with my family. My previous commute was 37 miles one-way. My peers looked at me like I am from another planet. They are refinancing 30-year mortgages with 30-year mortgages to lock in lower interest rates. I previously refinanced a 30 year mortgage to a 15 year mortgage. I was asked why I didn’t reduce my monthly payment instead. My youthful peers believe their paycheck is secure and will increase forever. Parents, teach your children!

I made mistakes throughout the years. I had credit card debt. I spent money on items that did not add value to my life. I did not look at my credit scores. I never asked for lower interest on my cards. I never questioned my insurance increases when I had no claims on my home or autos. By luck, my credit score was in the excellent range, but I never realized what that could have meant to me.

My children do not have to live my life and they have learned from my mistakes. My financial past and my budgeted future are open to them. My son and his wife closed on their first home today–in Seattle. They paid off their debt except for a minimal amount of college loans at low interest. They both have small, economical cars. They will come back home to get home furnishings from both sets of parents. They have thanked me for being open about my mistakes and they have confessed to their own. They understand the benefit of paying off debt with the payoff of their dreams coming true and securing their future. I am proud of them–I am proud of me! Share your struggles and your successes with your family and friends. They keep you focused and on track. They learn from the errors we make, as we learn from theirs.

Image:, via Flickr

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