What terrible financial decisions have you witnessed your family, friends, or coworkers make?

[Skippy918]

My MIL. She’s on fixed income and spends like nobody’s business. She’s run up her credit cards with thousands of dollars, multiple times. Sorry mil, we are not your retirement plan or bailout. Then she took money out of her 401k to pay the credit card bill, then she wondered why her tax bill was so high.
Dh has tried to put her on a budget but nope.

 

[Skippy918]

Folks who buy new cars every 2-3 years and roll the loan balances into the new car so they are so far upside down. You don’t need a car every 2-3 years especially if you are living paycheck to paycheck.

 

[RamblingMad]

Well me. I met my then husband who didn’t have anything. I learned why later, because he could literally have money in his hand and buy the dumbest crap ever.
So I met him, I was crazy good with keeping up with my bills, but got caught up in helping him with his bills and he wasn’t helping and I went bankrupt. We divorced and he still had nothing, he remarried and only has stuff because of his current wife.
My ex was a hard worker, but money would go through his hands like water.

My neighbor is going through a divorce. By the looks of it, he’s dissipating all of his assets with ridiculous spending. Hopefully his wife has a good lawyer.

 

[starvenger]

I would say buying a timeshare or joining one of those Direct Buy programs

When I was married, we used to charge all of our vacations. Now that I'm divorced I will never do that again! If I don't have the money saved up to pay cash for my vacation, I simply will not go. Plain and simple. I don't have any credit card debt anymore and want to keep it that way. LOL

I don't think using your cc for vacations is a big problem, so long as you should have the funds to pay for the charges before you even book anything. Easier said than done, of course.

I watched the neighbor quit his job before getting a new one. As much as I disliked my current job, I did not quit until I had a new one.

It's funny, because I am currently in this scenario, and it was something that I deliberated on for a few months before pulling the trigger. Now, if I was the only person in the family working, I wouldn't do it. But my wife supported me in leaving my old job, and I'm confident that I'll find something in due time.

In the words of Fred VanVleet, "Bet on Yourself"

 

[tvguy]

1) Co-worker opened a "Take and Bake" Gourmet Pizza franchise at the start of the 2008 recession. Didn't end well. Don't remember the name, but it apoears the chain went belly up nationally.

2) About 20 years ago a co-worker opened a coffee shop with his wife. This was before Starbucks was in the area. They butted heads with the building department over things they didn't want to do, permits etc, so their opening costs were way over budget. They were determined to pay a living wage, offer health insurance, vacation and sick time to employees. They did a brisk business, but they couldn't cover their fixed costs because customers wouldn't pay the prices he would have needed to charge to cover costs.

3) Neighbor lost his job. They came over and said that he his wife decided to "walk away" from their home but keep their 5th wheel, diesel pickup, Jeep and boat. After lots of lawyers and 6 months they had to negotiate a short sale on the house. Wife was only one on the mortgage and her income more than covered the mortgage. He was the only one on the loans for the 5th wheel, diesel pickup, Jeep and boat. Lawyer said they were nuts, the toys had to go, not the house.

 

[mylilnikita]

I forgot this gem:

My aunt was a very successful mortgage broker back in the day worked hard played hard.

Well my grandmother passed away. About 6 months later, my aunt moved to Florida from Maryland and decided to open a Bed and Board? to take care of elderly people (lol , ironically, she was always too shellfish to think of anyone or take care of anyone) but supposedly guilt set in.
It lasted maybe a year and she had to close down because her girlfriend who also helped was abusive to the residents.

so she ended up financially ruined and lived in a trailer that was owned by another relative.

She never did bounce back

 

[kdonnel]

It's funny, because I am currently in this scenario, and it was something that I deliberated on for a few months before pulling the trigger. Now, if I was the only person in the family working, I wouldn't do it. But my wife supported me in leaving my old job, and I'm confident that I'll find something in due time.

In the words of Fred VanVleet, "Bet on Yourself"

He had so many strikes in my mind.

His wife was not employed. He had two kids in college at the time. He gave up a 150k job and took almost 6 months to find a new one that paid 60k.

Good luck in your search! The job market seems really strong right now.

 

[jaiminee krikit]

My ex has 4 kids under the age of 5 and about a year ago bought a speed boat.
He's filed for bankruptcy twice in his life because of the 3 DUIs he's had.
And he still owes me about $30,000 in child support.

 

[ronandannette]

He had so many strikes in my mind.

His wife was not employed. He had two kids in college at the time. He gave up a 150k job and took almost 6 months to find a new one that paid 60k.

Good luck in your search! The job market seems really strong right now.

Well, that might have been a terrible financial decision if you just look and the dollars-and-cents, but there are other things in life that matter. Personally, at this stage I need the money - it's just not negotiable, but if my priorities were different I know I could be much happier in other ways if I walked out on my current job to take something more pleasant at half the wage. I kind of admire anybody who makes that conscious decision.

 

[nicolita3]

Coworker I knew took out a loan to pay for her husband's daughter's wedding. Coworker ended up divorcing her husband and he later died and she was left with the loan. When he died he had never changed his life insurance so the money went to her. Instead of paying off the loan for his daughter's wedding, coworker gave the money to his kids. The daughter who got married later divorced as well. The loan is still being paid by my coworker.

 

[LovesTimone]

My brother and his wife....oh the stories that I could tell... they make the worst decision ever, its like they put up a list of bad choices then throw a dart at which on they are going to pick and the worst part is they always are hitting up my parents for money... Which I put a stop to a couple of years ago... things like my brother wife lost her job, and for Valentines my brother spent 150.00 on flowers... ummm... thats 150.00 worth of groceries money dying on the table... where the food should be to feed your family... then asked my parents for grocery money... the list goes on and on...

We have a friend that does not look before he leaps... he got a quite large insurance settlement, almost half a million dollars and completely went through it in record time... It was like he lost his mind, he was spending like crazy, buying and selling cars, homes, and the woman he got involved with most likely did not help out the situation... If he would have stopped and talked to a investment counselor, we tried to hint around that he should talk to someone.... he would not be having to go back to work at 67... to make everything meet in the middle... my DH said he's adult, a grown man and unfortunately he made some really bad decisions and choices... And the crazy thing is, he gave DH and I a financial suggestion , which has really panned out for us...of course we ran it by our investment guy, who tweaked it a little bit more... and we are on track to get to our goal from our 5 year plan, about 8 months earlier... which is pretty dang sweet...

 

[ronandannette]

Coworker I knew took out a loan to pay for her husband's daughter's wedding. Coworker ended up divorcing her husband and he later died and she was left with the loan. When he died he had never changed his life insurance so the money went to her. Instead of paying off the loan for his daughter's wedding, coworker gave the money to his kids. The daughter who got married later divorced as well. The loan is still being paid by my coworker.

Again, a bad financial decision for her perhaps but ethically, a very decent thing to do.

 

[Pink Partridge]

The biggest mistake I have seen? Lend money to family members. And, of course, it never gets paid back.

I just would never lend a dime. Can't pay your mortgage? Rent a room. Can't make your car payment? Drive a junker. Can't pay your basic bills? Get another job. Get three jobs. Eat rice and beans. Ditch your iphone and get a track phone. I'm not giving you money. Family or not.

My one co-worker just lent $5k to his son and daughter-in-law. They were behind on "a lot of stuff". Oh. They also just got back from Las Vegas. He was so mad they took a trip when they owe him money. This is how family fights occur.

 

[Colleen27]

My BIL bought a home against my husband's advice because he fell so in love with it that he didn't want to hear about the issues it had. And it is quite a nice house... now. But in about a decade of ownership, they've had to take out leaking skylights and repair the water damage they caused, put on a new roof, bust up the basement floor to replace the main sewer drain, install a sump pump, repave the driveway, replace the furnace and rebuild the stairs to both doors and the back porch. I'm certainly no role model of prudence and caution in all things, - we have a money pit too, but at least we bought it knowing it was a fixer-upper and paid about a third of what BIL did for his - but I really can't fathom seeking the professional opinion of a contractor only to ignore it entirely.

 

[Turn the Page]

I expect to see a lot of this next year. My home is up 25% over last year. I saw a ton of this borrowing before the last crisis.

Our estimated value is currently up about 40% from when we bought it 5 years ago. We have been planning to add a garage at some point, which will require a refinance, and it was suggested we take advantage of all the extra equity in the home. I argued against it. Between the sky high construction costs right now and the inevitable crash that will happen at some point I am NOT interested in risking being underwater on our home.

 

[barkley]

former coworker-

union member/civil servant. had worked (poorly) for enough years that he was totally vested in the pension plan which included not only a decent pension but health/dental and vision at (then) very reasonable prices. on top of that he was retired military so he had THAT pension and associated benefits. retirement would have been financially comfortable as a 'double dipper'.

person worked poorly, supervisor tried to work with him. provide him with whatever supports he needed but it became clear that it wasn't that he couldn't do the job duties it was that he didn't want to do the job duties (made that openly and abundantly clear). since it takes forever to do a termination there were multiple meetings over months between worker/management/union. union saw the writing on the wall and told him that he was going to be fired, no question about it and if it happened he would lose everything-pension (just his contributions would be refunded), vacation/sick accruals, only medical/dental/vision through crazy expensive cobra. union rep, good friends (longer term/knowledgeable staff who had seen it happen to others) advised again and again 'retire, you get to keep everything-no black mark on your employment record if you want to go to even another government job'.
nope...............he was adamant that 'no woman will ever get me fired' (supervisor was female). well, she did-and he lost everything. hundreds of thousands in future pension earnings, tens of thousands in accruals, unknown amounts of health care coverage.

 

[White Cat]

Folks who buy new cars every 2-3 years and roll the loan balances into the new car so they are so far upside down. You don’t need a car every 2-3 years especially if you are living paycheck to paycheck.

It is amazing that so many do this. Just financing a car in general is USUALLY a bad idea.

 

[White Cat]

I know of a person that pays credit card interest. So foolish.

 

[NYCgrrl]

I know someone who had a semi steady job during the pandemic and stopped working to go on a vacation.

 

[KPeterso]

My cousin and his wife. Both over 60 now. They own almost nothing. They live in a townhouse owned by his parents that they pay very minimal rent on (so far below market). They should get the townhouse free and clear some day when his parents are gone. They own 2 much older cars (one is a 2003 and the other probably from the 90s, both Hondas though so should run forever). They pay all stuff on credit cards. My Mom was helping his wife with something at her work and overheard her on the phone with a credit card company about higher minimum payments coming soon at the time and that they could not afford it. Yikes! She was making that phone call out in the open where not only my Mom heard her but others too. They pay for somewhat extravagant types of trips on credit cards and then it takes years to get those paid off. She is a tenured professor at a local college and he bounces around jobs (seems to only stay at a company 2-3 years at a time and is off to the next adventure whether it is the same type of job). I am much closer in age to their kids. The son seems to have always been tight with his money, but married a girl who is spending it like tomorrow will never come. And the daughter, I am not as sure about how she spends her money. When she was in college, I was showing her one of my credit cards and she was asking what the interest rate was. I honestly did not know since I pay my bill off every month.