Community Chatter: What do you wish someone told you before making a big financial decision?

[KatieH]

Covid-19 has really transformed many aspects of our lives, and finances are one of those hot topics. Maybe you’ve been more interested in tackling those pressing home projects, because you’ve been spending more time at home,? Pondering a carpet refresh? New furniture? A backyard revamp? Many of these projects can get very spendy, so we thought it would be helpful to share our insights related to making big financial decisions.

What do YOU wish you had known prior to your big financial decisions? Feel free to chime in below!

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“I’ve made a number of big financial decisions over the years, from purchasing or refinancing properties, to buying cars, to taking out large loans, and I’ve learned a lot during this experiences.

My most important tips are:

• Never underestimate how important your credit score is! You never know when you might need to rely on your credit score to make an unexpected purchase, so it’s best to be continuously working to improve it. Better interest rates and larger lines of credit are offered to borrowers with fantastic scores, so it’s to your advantage to keep your score as strong as possible. Late payments, having too high of a balance on credit cards, and having too many (or too few!) lines of credit can negatively impact your score. Mint and Turbo, two great apps from Intuit, can help you keep a constant eye on your credit score, so be sure to check them out!
• Don’t finance something if you can afford to pay cash for it. You’ll end up paying a lot less if you don’t finance it, because you won’t have to pay interest or fees. Once I rolled a large credit card balance into a HELOC. This brought my interest rate way down (yay!), but it reduced my payments, so I ended up spending much (much, much) longer to pay off the debt (and it probably cost me more in the long run).
• If you must finance something in order to purchase it, think hard about whether you’ll be able to afford the payments. Do you really need this item? Can you buy something that is less expensive to keep your payments lower?
• If you can, always keep a “just in case” fund. Ideally you want to have enough money in savings to support yourself for six months, but even 3 months is better than nothing! It’s fine to start small… add a couple dollars to your savings account every week, and you’ll start seeing your account grow.”

~Katie, Community Manager

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“Making a big financial purchase, such as a home or vehicle, can be nerve-wracking, especially if you are oblivious to things such as your credit score or debt-to-income ratio. In my younger years, I always thought the most important aspect was having a great job with great pay, not taking into consideration that forgetting to pay my monthly bills (credit cards, utilities, etc.) on time could have an adverse effect on my ability to make a big purchase. I figured that as long as I made the payment and was current, I was in a good place. This was absolutely wrong, and I found this out the hard way when I attempted to purchase my first vehicle without the help of a cosigner. I was approved for the loan but with an astronomical interest rate that most would scoff at, but unfortunately, I had no other options. This was an early wake-up call for me, and I began taking the necessary steps to make improvements in the area of my financial knowledge.”

~Raph, Community Engagement Manager

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“I write this as a renter, college graduate with debt and a car loan. I'm not a huge shopper either. I do my best to pay my bills on time and live with less to ensure I can afford my expenses.  

Here are the questions I ask myself to justify a big(-ish) purchase: Will this bring me abundance (income) in the future? If the answer is Yes, then I can build some excitement around it, with thoughts of upgrading my current tools, anticipating putting the item to use at its fullest potential by watching tutorials and listening to other people's success. If the answer is No, how many uses will I get out of this purchase? If I paid $20 each time, for example, to use this item…how long would it take for me to pay for it in full? Is that reasonable? 

We don't have choices on many bills, debt, or emergency purchases, but for the items we do have a choice in, I think it's important to not only be responsible, but to find the joy in getting something you want and deserve!”

~Gabi, Community Engagement Lead

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To read more tips, check out what our friends on the Quickbooks Community are saying on this topic.

Now it's your turn... what do you wish someone had told you before you made a big financial decision?

[AG30]

My parents were frugal and I followed in their footsteps somewhat, however, I wish I was more comfortable buying things that I really LOVE instead of settling for the least expensive items all of the time. I purchased and sold 3 houses in 20 years but if I had to do it all over again I would have bought my DREAM house first ( although it was expensive at the time) and it would be nearly paid off by now.  I bought a modest car and drove it for several years, then purchased another modest car...I wish I had bought the car I wanted and paid it off!!! Although I have excellent credit and have never had to borrow money or struggle to make ends meet, I think I would have been happier if I extended myself a bit and purchased things that I LOVED and WANTED. It is like passing up your true love ( uncertainty, excitement, tension) for someone you LIKE who is stable, reliable and comfortable. You always wonder...would it have worked out? how would my life be different? 

[Raph]

@AG30 That is a great bit of advice, I tend to be the same way (always going for the less expensive as opposed to purchasing what I truly want). Thank you for taking the time and sharing! 

[KatieH]

@AG30 This is a really great observation. At least with homes, I've always been of the mindset to buy the best possible house that I can "kind of" afford, with the expectation that I'll grow into the payments as I progress in my career and in life. It's hard initially, but usually gets better. Most of the time this strategy has worked out well, however I *definitely* struggled when the housing market took a downturn in 2006-2008. I had used a similar strategy when purchasing a new home, buying the most I could "almost" afford, but because of the market crash, I wasn't able to sell my previous home for what I'd anticipated, thus making my financial life reeeaaaaalllly difficult for a few years. It felt like I was hanging by my fingernails to stay out of the hole of bankruptcy! I got through it, and things are better now, and in hindsight, it all worked out for the best. Phew. But it was tough.

For other types of purchases - cars, for example - I tend to be more frugal (I'm currently driving a 9 year old mom van 🤣). As I have gotten older though, I've definitely allowed myself to buy more of those things that I really love (like a pricey brand of shoes that I coveted.... I eyed them for about about a year before I finally snatched them up... now I have several pairs, and I no longer feel guilty about it! Haha!).

[Menaiya]

I have lived alone most of my adult live, one of the side effects of this was everytime money was short, I would use the credit card. Now I am making some major progress on paying down the debt, but between the student loans and the cards, it is very difficult to have any money left over.

I wish there were the warnings on credit card payments that are clearer today were available sooner.

[KatieH]

@Menaiya I totally understand and agree! I'm in my early 40s and am *weeks away* from finally paying off credit cards after about 20 years of having credit card debt. It's tough, but it can be done!

My family used a couple of Dave Ramsay's strategies, including the Snowball Method. This didn't make sense to me mathematically, but it really helped us FEEL like progress was being made, which motivated us to continue doing what we were doing.

[NewUserNov2020]

Where is the forum for newbie Turbotax questions?  Seems like it has been discontinued...  Pls email me the link.

Thanks.

[GabiU]

@NewUserNov2020 Here is the landing page for Tax Discussions. Click on a topic and you can search for an answer or "Ask a question". 
Additional information including FAQs and tutorials can be found using the TurboTax Help page. 

[Anonymous]

Someone told me.  But I didn't listen.  Make real sure, double check, ask a lot of questions and see how they think about money, budgeting etc. before..................... you get married.  It can be the most expensive financial decision of your life.  Not that I'm an angel.  But you understand what I am saying.  Take your time.

[Mike9241]

submitted signed paperwork to join Champion program. never hear back.  why? 

[daxers3]

Hard to say maybe it will be connect to cryptocurnecy. I am into making wallet which provide accept bitcoin payments and buying some dogecoins and bitcoins. I want to try to play casino where accept btc or try to play mining sumulator game. There  are  a lot of ways to earn crypto in our time.

[gretchen831]

mint is horrible in 2022