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Motley Fools Fess Up

It's that time of year again. We listen to endless loops of saccharine-sweet holiday tunes, binge on stale taffy sent by prospective business partners, and, most of all, we wallow in the remembrance of our big foul-ups of the previous year.

Everybody does this, right?

In the past, I've fessed up publicly to some major shopping blunders and lazy budgeting habits. And just this year, I admitted to plunging blindly into the biggest financial commitment of my life. In the the mother of all impulse purchases, I bought a home.

Luckily, I'm not the only one committing crimes of wallet. While we all started 2005 with a clean slate, that didn't stop my fellow Fools from making some major money blunders of their own. Read on as they come clean.

True Fool confessions
In January 2001, writer-analyst Tim Beyers finished paying off more than $45,000 in credit card debt. His amazing three-year journey to financial freedom, which you can read about here, started with a little purple notebook.

Tim, it's time to start another notebook. Might I suggest a calendar this time? He fesses up to missing the payment deadline on his credit cards four times in '05. And without prompting, he also owns up to bouncing at least three checks. "I haven't calculated the damage, but it's at least $200 in overdraft fees and late charges," he admits. In his own words: "Stupid, stupid, stupid." Glad we didn't have to say it.

The temptations of plastic and faraway lands were too much for two marketing Fools to overcome. One spent a memorable 14 days in the jungles and mountains of Peru. His plan to pay down his $8,000 in credit card debt was put on hold until he returned. Evidently, his finances are still strapped: It appears that he can't even afford a haircut.

A well-coiffed Fool celebrated his girlfriend's law school graduation in Costa Rica, courtesy of MasterCard. He's currently playing the rate-hopping game with his unpaid balance, which is lasting much longer than those costly tan lines.

Driven to distress
Writer Rich Duprey regularly spins inspiring yarns about financial turnarounds on these pages. This year he fell victim to the siren song of the good life and traded in his beater-car lifestyle for a lease on an entry-level Mercedes Benz 230C Kompressor.

Silly Rich. He forgot two key factors: He drives -- a lot -- and it snows like mad where he lives. He recently discovered that his high-performance car doesn't do so well in poor weather. And in just eight months, his odometer has already passed the 20,000-mile mark. After calculating the overages he'll have to pay if he turns the car back in at the end of the lease ($0.20 a mile for the first 5,000 miles over the limit, and $0.25 a mile thereafter), Rich has himself a fine piece of driveway sculpture.

He's already shopping for a second car (yes, a beater) that will better handle the snow and extra miles he's going to log.

For some, the math is just too much to bear, especially when it comes to financial moves that backfire. In May 2004, our Advertising Operations Manager (or "Admistress") decided to take up her lender on a 0%-APR-for-a-year credit card check for a $5,000 down payment on a car. She figured the 3% check fee was better than the 6.99% financing Ford (NYSE: F  ) was offering.

Fast-forward to May 2005: The five grand -- plus some -- still sat on her credit card. The 0% deal ran out, though, forcing her to pay 18.99% in interest on her balance. "I'm not sure how much money I actually lost in the process, but it was definitely a stupid idea, no matter what," she says.

We don't want to leave her in the lurch, so here's a link to a credit card calculator. And here's one to our free Get Out of Debt online guide.

Blinded by love
Wedding bells were in the air at Fool HQ in 2005. Nothing says "love is blind" like the price tag on bridal accoutrements. Marriage-minded madness drove one bride $20,000 over her budget. Although the big day was wonderful, she says the video she shelled out for is barely watchable.

The dress was a hit, but she blushingly admits to spending $5,000 on the outfit she can only wear once. The $200 shoes padded the bill even further -- but not her tootsies: She could barely make it through the big day her dogs hurt so much.

Her financial triumph, however, overshadows the overspending. For the first time in 10 years (more than one-third of her life), she is completely out of credit card debt, even with the wedding bill blues.

Another Fool bride narrowly escaped financial devastation when her entire New Orleans celebration was wiped out by Hurricane Katrina two weeks before her wedding day. But thanks to a $300 wedding insurance policy (and the kindness of the New Orleans vendors she hired), the disaster didn't turn into a budget-buster. She got back the nearly $6,000 in deposits and threw a memorable Louisiana-style bash a few months later in a new location.

Good intentions, bad execution
For all of our yammering about taking the financial high road, some of us Fools are a lot of talk -- and little action.

Resident retirement expert Robert Brokamp owns up to leaving $300 on the table -- money he and his family set aside in their flexible spending account -- because the reimbursement deadline slipped his mind. Granted, he and his family were moving at the time. But that doesn't take away the sting of having that tax-free $300 forever gone.

Human Resources was bustling this year. Perhaps that's why the head of the department completely flaked about sending in the rebate for $100 on his new stove.

A resident software developer told me that the best way to make sure all the bills are paid on time was to set up automatic bill payment via online banking. All of his bills were indeed paid on time in '05, and then some. He confesses that only recently did he actually review his Verizon (NYSE: VZ  ) bill when he noticed that for months he had been paying for DSL service he ordered but cancelled before it was installed. Now all that time he saved automating his bill payment is being sucked up by the red tape of getting a refund.

And then there's my pal Alyce Lomax, our retail expert to whom I turn for tips on finding the best shoe sales. After two years of dragging her feet, it was this article query -- and threat of public shaming -- that finally got her to sign up for the Fool's 401(k) plan. This is a plan that includes a company-match component (a.k.a. "free money"), I might add.

None of us owns a crystal ball, but sometimes we act like we do. Analyst Steven Mallas spent 2005 second-guessing the Fed. Convinced that Greenspan, et al., was done with interest rate increases, he dumped some money into a mortgage REIT he says is similar to Income Investor pick AnnalyMortgage (NYSE: NLY  ) .

"I was wrong. The mREIT sector has seen falling prices and dividends slashed like counselors at Camp Crystal Lake," he laments.

Oopsy daisy!

Life happens. Check, please!
After running the numbers, editor Roger Friedman and his wife decided that it was time for a new addition to their household of three. They'd have to stretch financially, but a little brother or sister for their darling daughter would complete their family unit.

Fate (and family genetics) decided to supersize their plan, and now they're expecting twins in February. "If my wife and I have hopes of sending our offspring to a private university down the road, one of us is going to have to sell a bunch of organs or win big money on the new Howie Mandel game show."

Another Fool editor, Brian Richards, thought he knew what he was in for when he bought a "fixer upper" over the summer with "cosmetic" water damage in the surface. He thought he could "quickly" renovate the surface items. (All the quotes are his, by the way.)

But you can't judge a home by its outward appearance. When construction began, he found rusted-out pipes, rotten subfloors, and crumbling wood moldings. "At one point, this sentence came from my mouth: 'We're hemorrhaging money!'," he admits.

Don't suffer alone
We have a history of sharing our boo-boos at Fool.com. Longtime Fool analyst Bill Mann admitted that his enthusiasm for the telecommunications industry got in the way of his ability to do dispassionate analysis -- and he paid for it. Founder Tom Gardner shared three of his biggest blunders he made back in 2000. And even readers have copped to things -- such as surprising debt levels -- in public.

Got something you'd like to get off your chest? Never contributed to your 401(k)? Carrying credit card debt? Bought a stinker stock and rode it all the way to its universally historic low? Head over to the Fool Confessional, otherwise known as the Fools and Their Money discussion board.

We're all ears. And, boy, can we relate.

Dayana Yochim is happily moved into her 2005 impulse purchase and is currently overspending on domestic accoutrements. Talk about full disclosure. Check out the Fool's policy.


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