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It’s possible to live in the moment without living for the moment. 

Image source: Getty Images

I’ve never been much of a risk-taker, but I was once a person who closed her eyes to inconvenient realities. I cringe as I look back on the bone-headed moves I made during that time. Yes, I learned from them. And yes, I’m smarter today due to the impact of those mistakes. But I still cringe.

One bad move leads to another

To tell you about the second biggest financial mistake I’ve ever made, I need to tell you about the biggest. The biggest financial mistake was buying a home we could barely afford. Prior to buying that house, my husband and I owned a small, starter home. We both worked, and despite the fact that we were also in college, we could afford the mortgage payment. We were saving for the future, and generally rolling along at a steady pace.

I would like to blame my husband, but the truth is, he’s always wanted me to be happy and I talked him into moving. I can be convincing when I set my mind to it, and I laid out the case for the new house with the zeal of an attorney defending a death row client. I had an answer for all of his questions and played on his emotions by convincing him that our two baby boys needed to live in an area with better schools.

Prior to moving into that house, we never used credit cards and focused on paying cash for anything we needed. After move-in day, keeping up with the Joneses became a way of life. We spent money on things we could live without and found ourselves reaching for a credit card when we didn’t have cash.

Worse yet, that move led to the second biggest mistake: Failing to invest for the future. We had access to an employee-sponsored 401(k) with a generous match, but investing for a future that seemed a thousand years away was not on my radar. I told myself that there would always be time to prepare for retirement. At that moment, I just wanted to lead a fabulous life that we could not afford.

$400

Had I not been so caught up in living only for the moment back then, we would be much further ahead than we are today. While things were tight when I overspent, if we stuck to our monthly budget, we could cover our bills, pay miscellaneous expenses, and have $400 left as a cushion.

I could kick myself every time I remember that squandered opportunity. Rather than invest the $400, I found ways to waste it.

We were 24 and 25 years old when we moved into the second house. Let’s say we’d invested that $400 per month in a 401(k) or an IRA earning an average annual return of 7%. We would have built up a nest egg of more than $303,000 by the time my husband hit age 50. If he retired at full retirement age, that account would be worth more than $1.1 million. And that’s if we never increased our contribution.

The cost of delay

I get that we were young and mistakes were inevitable, but we’re still paying for our late arrival to the investment party. Today, a large portion of our monthly income goes directly to savings and investments. We’ll be fine when retirement rolls around, but it comes as a cost.

Unfortunately, most of the financial blowback hits my husband. While I never want to retire, he would like to one day. In order to hit our financial goals, he’ll be working a few years longer than anticipated. While he loves his job, it bothers me that he doesn’t have the option of leaving earlier. Every time he tells me that the situation is perfectly fine, I’m reminded that I’m the one who talked him into living beyond our means.

The good news is that we drilled the adage, “The best time to start investing was yesterday” into our boys. They’re men now and each not only lives below their means, but they’re serious about building a healthy portfolio.

I know that I’m not your mother, but I would still encourage you to learn from my mistakes. The earlier you get serious about the future, the more you’ll thank your past self when the future arrives.

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