Bad Money Habits That Lead to Big Trouble

If your relatives or close friends constantly complain about their personal finances or always experience money problems, you might vow with every ounce of your strength to never be in their situation. However, a secret to making sure your finances remain on the right track is learning how to recognize small money habits that can trigger serious money problems.

The truth of the matter is, the majority of us don’t have a manual for managing our personal finances. A lot of what we know about money is through trial and error. As young adults, we make a bunch of costly mistakes. And then we spend the next few years recouping from these mistakes. But you don’t have to learn smart money management the hard way.

Here’s a rundown of seemingly small bad money habits that can cause long-term financial problems.

1. Not budgeting your money

You may feel that budgeting money is optional, and rather than balance your checkbook and create a spending plan at the beginning of each month, you might go with the flow and hope for the best. This approach might work for now, but it can gradually cause problems with your personal finances.

If you don’t have a budget or spending plan, there’s no way to know for sure where your money goes. The risk of overspending is higher if you don’t budget. But understandably, budget might be an ugly word as it implies restrictions. However, if you take a look at your income, and compare this with your expenses, you’ll know with certainty how much you have available for extra spending each month, such as recreation, transportation and miscellaneous shopping. As a result, you’re less likely to overspend on non-essentials.

2. Keeping up with the Joneses

You may be independent and have a mind of your own, but when it comes to personal finances, you might fall for a common trap: keeping up with the Joneses — or more specifically, your relatives, your coworkers, your friends or your neighbors.

This might not seem like a big deal, but it really depends on how far you’re willing to go to give the impression that you have more than you actually do. Maybe you live in a region where a lot of the residents are high earners, such as New York City or certain parts of California. If your friends or coworkers have disposable income to shop on a regular basis, eat out several times a week or take nice vacations, you might feel pressured to keep up with their lifestyle. This is a costly bad habit that can lead to serious debt, and if unable to reign in spending, a bankruptcy attorney might be the only hope for getting your finances back on track.

3. Cosigning a loan

If you have excellent credit, friends or relatives may hope to benefit from your high rating — but don’t let them. It might be difficult to say no if someone you care about asks you to cosign a loan for them. But at the end of the day, you have to protect yourself. Therefore, you need to be realistic about the situation. Cosigning a loan or credit card is a huge deal, and as cosigner you’re equally responsible for any debt or balance the other person incurs. This person might agree to make every monthly payment, but there are no guarantees. And if this person defaults, guess who’s responsible for the payment — you.

4. Shopping to feel better

If you had a bad day at work, got into a fight with your best friend or broke up with your boyfriend or girlfriend, a little retail therapy might boost your spirits. But if you get into a habit of shopping whenever you’re feeling down, this can lead to serious problems with your personal finances. You might slowly increase your credit card debt, or you might spend money designated for bills.

Treating yourself to something special might provide immediate happiness, but it doesn’t last. So, look for other ways to lift your spirits when you’re feeling sad — cheaper ways. Go for a walk, explore your creative side or call up a friend.

Maintaining control of your money can protect your finances. But to do this, you have to recognize habits that can complicate your personal finances and make it harder to reach goals.

Feeling Under Water

Underwater world Our home is no longer truly “under water,” but the irony is that now I feel like it is. (See my previous Vent Tunnel).

We bought our home in June 2008, just a month before the market completely crashed. At the time we simply felt lucky that we were able to sell our starter home for such a profit. We bought for $195k, which was the median price in Portland back in 2004, and we sold for $265k. We felt like we put a lot of sweat equity into the yard and some cash into making it much energy efficient, but it was still a sweet return on investment.

We poured every penny of profit into our next home, which we bought for $422k at the height of the bubble. Even though it wasn’t a bargain, we felt very lucky to have managed the move when we did. Some of our neighbors who listed just after us had their homes sit on the market all summer never to sell, and two years later we saw a very similar house around the corner from our old place on the market for $190k. Boy am I glad we’re past those times.

In December 2010, just over a year after moving in, we decided to refinance, which required an appraisal. It came in very low, $372k, a full $50k below what we bought our place for. At the time we took this news in stride, simply feeling grateful for just owning (or rather being able to buy) our home during such unsteady financial times . We also didn’t plan on moving in the foreseeable future, so it didn’t feel like a problem as long as we were happy in our home and able to pay the mortgage.

In the years since, I’ve been glad to see the market improve but honestly haven’t given much thought to the value of our home. Yet, after going house shopping for Miel in early fall, we started seriously considering moving, even to the point of finding a four bedroom place near Irving Park that we felt would be perfect us. So, we started taking steps to list our place, but were stopped in our tracks.

We were honestly shocked when our Realtor informed us that our house should be listed for $450k (which still feels very conservative). Yet, the comparative market value is really hard run since there aren’t many home like ours so close-in (and the fact that there are still plenty of fixers in our neighborhood doesn’t help). Zillow puts our place at $497k, and we frankly feel it’s worth that.

It’s not the estimated of our home that makes me suddenly feel under water, it’s the fact that in order for us to keep our current mortgage we could only afford a place for around $430k, when had been hoping to buy for about $650k. Plus, we just put on a new roof for $10k and our other repairs and upgrades at least total that much. So, that’s why the idea of putting our place on the market for $450 feels like a slap in the face.

After a month, I’m finally able to move past this feeling of defeat (it didn’t help that after paying several thousand trying to make our basement dry, it flooded worse than ever with the rains…ugh). Now I’m feeling reinspired, and ready to get to work on some improvements that will in fact improve our home’s value.

Has your home ever been under water?

How did you get past that sinking feeling?


My First $75 Speaking Gig

$75 check for my first paid speaking gig!

$75 check for my first paid speaking gig!

Last week I had my first $75 speaking gig. I shared an introduction to Simplicity Parenting with a fantastic group of parents from Tillamook Cooperative Preschool. Receiving a check written out to Darcy’s Utopia felt like a big deal, regardless of the amount. With all my training and prep, I feel like I’ve more than earned it.

I’ve never told anyone, but from an early age I felt a premonition that someday I would become a professional public speaker. As a freshman I entered a speech contest, and I think that year I placed third sharing why I thought that organic labeling should become mainstream. I ended doing better in debate than solo, but both obviously require speaking. In college, I was passionate about climate change and joined a speaker’s bureau where I gave several talks on college campuses. I found that the more that I shared my personal story, the better my talks would go, and even though I could explain the science of global warming, it was my passion for stopping it that shone through and compelled others to care.

Yet, in my first job out of college I had a dreadful experience of stuttering my way through a press conference with complete cotton mouth. I was mortified, and it’s taken me years to truly get over that deer-in-the-headlights feeling.

My presentation for Tillamook Preschool went well, and it felt like suuuuchh a long time a-coming. The parents were receptive and engaged, and several gave me genuine thank yous following my talk. With just an hour, I barely managed to skim the surface of SP, but I’m hopeful that I planted some seeds for a few families.

Speaking of seeds, that’s been my business mantra as I’ve taken actions holding hope that my seeds would someday sprout. Thanks how change works, it takes action and patience. My invitation to speak first came from an outreach email that I sent the school last spring, which also resulted in my first coaching client.

With my first true speaking gig under my belt, I’m ready to continue to hone my skills. I’ll give Toastmasters a try, and see where things go…just the idea of getting paid to speak makes me smile. Getting paid for your passion is what the new economy should be about.


My Financial Vent Tunnel

I haven’t been blogging lately, and I know that it’s in part because I’ve been frustrated by our finances. There are a combination of factors, none of which ease the stress. I naturally wish that everything was ideal, and the disconnect between my desires and reality is getting under my skin. I realize that it’s time start using this blog to vent as well as to dream.

One of the clever tools I use in my Mama Bliss Coaching is to create a “Vent Tunnel” where you create a safe space to simply rant about whatever is bothering you. So, here it goes:

  1. After writing a lovely little article about being a “Budget Believer” for Metro Parent, I haven’t managed to update my own budget. I had the best of intentions when I wrote the article to rebuild our budget. Initially I waited because I knew that our August vacation budget didn’t reflect our real budget, but then September flew by and now October is half over. I’m feeling a tiny bit better after I just spent the last hour taking the first stab at it. But I’ve been feeling like a major fraud though, and I know it’s going to take diligence to heed my own sage advice…
  2. We’ve spent too much money on our 1904 Victorian. When I left my City paycheck, we agreed that we couldn’t afford to take on major home improvements. But the winter storms left of with a small leak in our roof, and it was old enough that a patch job didn’t feel sufficient. Then, despite us trying multiple different fixes over the years, our basement has continued to leak with each major rain storm. It’s made it impossible for us to make it into a livable family space. So, we committed once again to spend more money to at least make it dry. There’s more to this story, but I think I need a whole post to vent on it…
  3. In the process of Miel searching for her new Portland home, I ended up touring lots of beautiful places in nearby Irvington. Our kids transferred into Irvington School, but we have to walk them “across the tracks” of MLK to get there (the italics are for Kevin, who loves to use this phrase, but it makes me cringe). We’ve been truly happy in our home for the past six years, and there are still so many things that I love about our place. Yet, the location has felt awkward ever since the kids started in school. Aside from a long walk, it’s the fact that there’s only one set of boys for them to have impromptu play dates with. Makenna, and soon Teagan, have no one within a reasonably nearby radius to play with. I know that it sounds ludicrous and probably very privileged to want to move homes for social reasons, but Kevin and I would love to have more community friends too. There are other factors too, like that we could really use some more guest space, and I’ve had a goal of hosting exchange students when the kids are a bit older, but that can’t happen our current home. More of a story on this too…
  4. I need a part-time nanny. Teagan is very close to toddling around on her own. I spent a lot of time off during the summer, and I knew that my windows of available work time were getting shorter and shorter. Plus, with ramping up my coaching, I need to have truly uninterrupted appointment times available. I was planning to hire someone in September, but then with Miel moving out, we decided to share a nanny and are hopefully close to doing so. But there is also the obvious need to afford the nanny. Thankfully, we’re finally starting to earn from our investment in the beach cabins. Yet, I had been doing coaching alone, it would have continued to feel like a chicken/egg syndrome of needing the kid-free time in order to work, but needing the income to afford the care.
  5. We’re in serious need of a Money Honey talk, but I feel like since I’ve been “off work” our money conversations end up being all about how I spend too much money. Yes, I did go on a spending binge back in the spring, but I’ve kept my spending in check for the past six months. Yet, I feel like Kevin is constantly “accusing” me of spending on things that are within our budget, and worse than that is the feeling like I’m not contributing financially to our household and am therefore undeserving. I am sooooo ready to start making some real cash, and I know that my desire to earn is linked to my sense of self worth. I’m tired of feeling like I can’t fully live the life I want.

It feels great to get this off my chest, even though I still need to dig deeper and share more on many aspects. While I know that I’m opening myself up to criticism, I would rather share our full story than unpersonal finance tips.

What does your “Vent Tunnel” look like?


Portland Roasting


It’s National Coffee Day, and here in Portland, coffee is taken seriously. In fact, not surprisingly Portland is ranked the 2nd best city for coffee snobs.

Our households buy our coffee through a school program with Portland Roasting Company that contributes $4 out of ever $10 purchase directly to the school. Now if you ask me, that is beats a bake sale any day!

Most of us drink coffee, so this way we can do so and support our local schools at the same time. If you live in Portland, or even if you don’t, drop us a note and we can connect you with the organizers of the program and hook you up with some awesome coffee for a great cause.

350 bakery

I also have to share about the newest and most fabulous 350 Bakery & Coffee Bar in Washington, DC. Conveniently right across the street from where we just moved from, 350 Bakery is a fabulous addition to the neighborhood. I typically stay away from pastries, but if you are going to have one, it might as well be delicious! Plus the staff cannot be beat on the friendliness factor. It isn’t surprising, since Andy, their head barista, was actually trained in Portland. Stop by and check them out!

Enjoy a cup!