My Dumbest Money Move Ever


subaru wrxRecently, I’ve talked about my first investment, which turned out to be a great investment. Then I talked about my worst investment decision. Today, I am going to talk about my dumbest money move ever.

Everything I write about here on Money Smart Guides is to help you be smarter with your money. I’ve made a ton of money mistakes in my life, getting into a mountain of credit card debt was just one. Today I want to talk about another dumb money mistake I made: not buying a bike rack.

You may be thinking, “how is not buying a bike rack a dumb money mistake”? Well, instead of buying a bike rack, I bought a second car.

Biking and Driving

I love to mountain bike. Most summers, by best friend from college and I head up to his parents house in New York and spend a weekend mountain biking though the Adirondacks. It’s always an awesome time. Since I am on the tall side, I have a large mountain bike. This wasn’t an issue until I bought my Subaru WRX. My bike couldn’t fit into the trunk (even with the front wheel removed). It wouldn’t even fit in the back seat without some modification – removing the front wheel and the handlebars!

I didn’t like having to do this work all of the time, so my brother-in-law told me to get a bike rack. I quickly shot that idea down. To understand why, you have to understand me. I love cars and this car was my baby. I didn’t want a scratch on it. I feared that the bike rack would scratch the car or leave marks. Then there was the possibility of the bike scratching the car too. I just couldn’t deal with it. I needed another solution.

Buying A Second Car

My solution was to buy a second car. I ended up buying a 2001 VW Golf with over 140,000 for $5,000. I justified this (somehow) by saying that this would be my daily driver. I would keep miles off my Subaru, which I wanted to keep long-term and as a result of not driving it as much, my insurance would drop. Plus, the Golf got better gas mileage.

Of course, when one does the math, it still shows that buying another car was a dumb financial move. As I drove the car, it needed repairs. The water pump went. Then the turbo started leaking oil. Then the transmission started to slip. All told, I think I put another $1,500 into the car during the 4 years I owned it.

It got to a point where the transmission was going to go at any minute. With it being in such bad shape, I knew I wasn’t going to get much for it selling it privately, so I traded it in when I bought my new car. The following summer, I was able to sell the Subaru as well.

Now I have one car and my mountain bike fits into it and I only have to remove the front wheel.

Lessons Learned

I learned a lot about this experience. At the time, I wasn’t thinking long-term. I only wanted a solution for my bike and for whatever reason, I was fixated on the answer being a new car. My brother-in-law tried talking me out of it many times, but it simply went in one ear, and out the other.

Had I been looking at the situation more long-term, I would have realized that buying a new car made zero financial sense. But again, I was too caught up in the moment.

I am curious to try to figure out what could have changed my mind. I talk about waiting a few days or weeks before buying something to see if you truly want it. That didn’t work for me in this case. I was too focused on another car being the solution.

Readers, what tips or tricks can you offer that might work in a situation when simply delaying a purchase doesn’t work?

16 thoughts on “My Dumbest Money Move Ever”

  1. Wow Jon – thanks for sharing. It’s great that you realized that this was a mistake and in the grad scheme of things it was pretty small. It’s funny how things make so much sense at the time, but seem bone headed 10 years later 🙂

    1. Totally agree. There are so many times when in moment, we can completely rationalize something, only to see later how much of a fool we really were.

    1. Unfortunately for me, that didn’t work. My emotions were high for weeks/months thinking that the way I went was the only option.

  2. Bike racks have come a long way and don’t scratch your car. 🙂 I have a Thule rack that’s a hitch mount and works great. But I understand bone-headed money moves. I’ve made quite a few in my time, like leasing a car after paying off my pick-up truck. It ended quite badly to say the least! I don’t think I’ll ever lease a car again.

  3. That’s definitely an expensive lesson to learn, but it could have been on a much more pricey car which would have been an even bigger hit for you. It sounds like while it was a bad decision, it wasn’t nearly as bad as it could have been. Plus you got the lesson of a lifetime, so it wasn’t a total waste.

  4. Thanks for sharing Jon! Where as your mistake was a “big” one I made a ton of small ones that added up to one pretty big issue. In terms of what would work in the event that delaying isn’t an option that’s a tough one. I guess I would start looking at other options and possibilities.

  5. Hey Jon,

    Well we do learn from our mistakes right?
    A tip I can suggest would be to do the maths and think about it from purely a numbers/unemotional perspective :)..

    The only big financial “mistake” if you consider it that I’ve really made is travelling, which can get quite expensive.. At the same time though you have to spend your money on something and enjoy life to a degree

    1. I’m not sure I would consider traveling a money mistake. It’s great to get away. I guess though if you put traveling ahead of getting into good financial shape first or the traveling puts you into debt, then it is a bad thing.

      1. @Jon Dulin: Fair point, I don’t see it as a massive mistake but probably the thing that I spend most of my money on and does not really provide any return other than gaining life experience 🙂

  6. It’s good that you can laugh at yourself because that mistake is kind of funny. If you had been thinking clearly you would have realized you probably would have been better off buying a new (or used)bike in New York then giving it to charity at the end of your ride.

  7. I use a variation on the delayed purchasing tactic. I start saving for larger purchases well in advance (even when I have the cash to buy them right now). I make sure that the amount I am saving towards the purchase is small enough that it will take me a fair while to actually get to the amount I am looking to save.

    For example if I was saving for a $5000 car I may start to put $200 a week into a savings account for the car (taking me 25 weeks to get there). By the time I get to the end I a) don’t want to take money out of my savings account and b) I’m normally ‘over’ the purchase because of the time lag. I’ve used this to stop myself buying a sports car twice (although I’m currently saving for it again…)

    1. That is a really smart way of saving for something. The good news is that by the 8th or 9th time you are saving for the sports car, you are going to have nice little stash of cash…regardless if you ever buy the car!

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