Melissa Read Memorial Scholarship Essay #5

Worst Financial Decision


Applicant Breanna Moore

                  It’s very easy to make mistakes when it comes to finances. The countless impulse buys I’ve been guilty of throughout my high school career certainly impacted where I stand financially today. Although it’s fun to go out with friends, on a shopping spree, and to be in the crowd of my favorite band at their concert, spending the entirety of my money has left me with next to nothing today. Four years ago, at the age of fourteen, my uncle offered me a deal I shouldn’t have refused. He told me that as long as I never withdrew any money until I turned eighteen he would match every dollar I deposited into a bank account. At fourteen-years-old, I was uninterested and declined his gracious offer. If only I understood the long-term consequences back then as I do now at the age of eighteen. Seeing how much I miss out on today because I didn’t make wiser decisions with my money has taught me a few things: I should have begun saving much earlier on, I need to consider the opportunity cost of my purchases, and I would have saved myself so much hassle if I took my uncle up on his deal.

            The entirety of my savings for the past four years has been reserved for short-term goals. I’m not much of an impulse buyer considering I know how to set money aside and resist the urge to spend it when I’m waiting to make a larger purchase. Had I included saving a portion of the money I made for long-term goals, my financial standing would be in a much better position. As a high school graduate starting my college journey in the fall, I wish I had money on hand to put towards my schooling. The dread from the thousands of dollars I’ll be accepting in the form of student loans is already taking its toll. In addition to the cost, I will pay towards my education the interest piled onto the total amount will bury me further into debt. The increasing rate of college dropouts attributed to student loan debt is alarming; I hope to receive the help I need financially so I don’t become just another statistic. If I had begun my savings much earlier in life the financial worries I’m having now wouldn’t be as much of a burden.

            One of the most stressed topics outlined by businessman Dave Ramsey during my personal finance class was “opportunity cost.” Opportunity cost is self-explanatory; consider what other opportunities you would be giving up by making a decision. It seems like an easy concept to grasp, except now that I’m reflecting upon the purchases I made over the years I’m not sure it was one I understood. The choice to attend concerts each year and avoid setting aside a portion of that money for savings has left me with nothing. Although the concerts were enjoyable, I could have secured a better financial position for myself in the future by saving the hundreds of dollars put towards them. An important purchase that I disregarded was a car; if I had factored that significant expense within my opportunity cost I would be driving my own right now. It’s something I regret, but I hope to change my financial stance in the future by beginning to save and closely considering my opportunity cost.

            Above all, my decision to decline my uncle’s deal drastically affected my financial status. I’ve been employed by a family member since I was fourteen, around the same time that my uncle proposed his offer to me. I work every two weeks and make thirty dollars each time; therefore, I’ve made sixty dollars per month over the past four years. It doesn’t seem like much, but when taking the numbers into account the total amount I’ve earned the past four years is $2,880. Unfortunately, I didn’t save that money and it was spent on frivolous purchases over the years. Matching that total with another $2,880 would have brought me close to six thousand dollars by the time I was eighteen. The ways in which I could utilize this amount today are endless; I could buy a reliable car and avoid taking out student loans. When I look at the amount of earnings as a whole, I now realize just how much was frivolously spent, versus put into savings. Therefore, I strongly believe the declination of my uncle’s deal was the worst financial decision I’ve ever made.

            Not everyone is perfect when it comes to finances; many mistakes are made along the way and it’s an individual’s responsibility to learn from them. My greatest financial regret was not beginning to save given the capability to match the money I was making. Although this is very discouraging, I’ve realized firsthand how impactful saving ahead can really be. This lesson has begun to impact my spending habits. For the time being, I did enjoy the purchases I was making, but I could have taken the future into account and cut back on my spending. My hope for the future is that I will make wiser purchases and be able to put money away in savings. As I proceed on my journey following my college career, the ultimate goal is to leave debt free granting me with limitless opportunities.


[Tom: I thought this lesson was one of the greatest. A lot of adults make the same mistake when it comes to the company match with a 401k. I wonder if her uncle was getting at than when he proposed the matching program to her savings. 

I don’t think she’ll make that mistake again when it comes time to invest in her 401K if that is an option in future employment.]








Tom is a doctor, husband and father of five with a passion for parenting and finance. When he isn't skateboarding, riding BMX, or jumping on the trampoline with his kids, he is reading and writing about personal finance. He helps high income parents educate and mentor their kids to become financially, emotionally, and intellectually self sufficient.

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