My 4 Biggest Financial Regrets and What I Learned From Them

There's no shame in making mistakes that we learn from.

I realize that it's impossible to get through life without regrets. The best any of us can hope for is to learn from our mistakes and the discomfort they cause. Here are four of my biggest financial blunders and how they've changed the way I look at finances:

1. Upgrading homes before we were ready

Back when mortgage interest rates hovered around 20%, we bought our first home. We scraped together enough to assume a VA loan from a couple who desperately needed to sell. I had just turned 20 and my husband was 21.

We were working, in college, and our first son was around six months old. Here's the deal, though: As overwhelming as all that sounds, we could afford the house. We were good at saving money, didn't get into credit card debt, and the house payment was right in our comfort zone.

Maybe it was too easy because we had no idea how stressful a larger mortgage would be. After the birth of another son, we started thinking about where our boys would eventually go to school. The district we were in was pretty bad and we impulsively decided we needed to move. I recall "sort of" working on a budget to figure out what we could afford, but the decision was driven by fear.

We moved into a house that felt like a mansion to us. It was brand new, in a great area, and near top-rated schools. We immediately became house poor. We made every payment but had little money left at the end of the month. And when our boys did start school, we started putting things like school clothes on credit cards.

Once we introduced credit cards to the mix, we went from having little left at the end of the month to having nothing left. Fortunately, we were still paying bills, but we were intensely uncomfortable.

Lesson No. 1: Never make fear-based financial decisions. When fear is the overriding emotion, common sense goes out the window.

Bonus lesson: It's more fun to live with a small mortgage in an imperfect neighborhood than to scrape by with a large mortgage in your dream neighborhood.

2. Running ourselves ragged

The fact that we married so young meant spending the early years of our kid's lives working and in college. Our schedules were like a Rubik's Cube, continually moving pieces to get things right.

Whether both of us had classes or not, we ran ourselves ragged. Other than our boy's sporting events, I can't recall doing anything fun during that time. My husband and I rarely saw each other and never had time to talk about finances, much less plan for the future.

Lesson No. 2: Take it easy. You don't have to get everything done today. And if you don't have enough time to sit down and map out a financial future, you've probably taken on too much.

3. Being too optimistic

Fast forward a decade or so. College was in our rearview mirrors and we both had careers we enjoyed. We were living in our fourth home and pretty stinkin' happy. Things weren't perfect of course, but the boys were thriving, we felt settled, and the auto industry provided us with a great income.

This is around the time I discovered my love for personal finance and budgets. I even created a budget that forecasted our family finances 25 years into the future. I wish I still had that budget because it would definitely provide a chuckle or two.

According to my (delusional) plan, our incomes would always outpace inflation, the American auto industry would forever reign supreme, newspapers would never go the way of the dodo, and life would go according to plan.

None of it worked out as I imagined, as both of our industries spiraled. For me, being so optimistic meant believing we had plenty of time. We weren't maxing our 401(k)s because my magical budget had us increasing our contributions by 1% a year. We didn't have a fat emergency fund, because there was no way both of our jobs would be in jeopardy at the same time.

Lesson No. 3: Things can (and do) go south. Planning for the worst isn't pessimistic, it's realistic. If things don't totally fall apart, that's great. But if they do, it's good to have enough money put away to buy yourself time to make a solid decision about what comes next.

4. Not seeking advice

Once it became clear that we would need to reinvent our careers, I began to study everything I could get my hands on about personal finances. I knew that we had to prioritize savings and investments, and I wanted to understand how to create a realistic budget that could weather the ups and downs of adulthood.

What I avoided doing for far too long was speaking with a financial advisor. I was embarrassed by all the financial starts and stops we'd experienced, never realizing that starts and stops are part of life. There was nothing unique about our financial situation.

Lesson No. 4: Don't be afraid to seek help. No matter how much you read, you may be missing out on some pretty great financial advice.

Not to be Polly Positive here, but no matter how traumatic each situation felt at the time, there was a valuable lesson buried there. For example:

• Because we know what it feels like to be house poor, we keep our house payments low by taking out a smaller mortgage than what we would qualify for.
• Because we know what it feels like for a business (or industry) to face plant, we live below our means and keep enough in an emergency account to carry us through.
• We don't charge anything that can't be paid in full by the next billing cycle, just to avoid paying interest.
• And now, when I don't know the answer to a financial question, I'm not too proud to ask.

It does us no good to focus on the mistakes we make. I suspect what matters is how much we learn from them.