If we’re going to make mistakes, the least they can do is make us smarter.
- Everyone makes financial mistakes. It’s how we learn.
- We rarely know what’s just around the corner — bad or good.
- While I couldn’t have predicted the housing bubble bursting, I wish I’d been more cautious with how I spent money on my home at that time.
2007 was a pretty horrid year for home buyers across the U.S. Many of us — particularly those of us who’d never lost money when selling a house — assumed that anything we put into a home would come back to us at some point.
Call it naïve or overly optimistic, but the idea of a housing bubble never entered my mind. I left reporting for a few years to write novels and honestly, I must have had my head in the sand. It never occurred to me that mortgage lenders were approving loans for anyone with a pulse. Frankly, I didn’t pay attention to anyone else’s financial situation during that time.
And this all leads to a home renovation project I have always regretted: investing too much, too soon.
A bit of background
After many years away, my husband and I were moving back to our hometown. We were excited, especially about having enough money to buy a house in a particular neighborhood, a place we dreamed of living when we were young, in college, and broke.
As mentioned, I was paying zero attention to what was going on in the housing market. Had I been even slightly plugged in, I might have felt some concern and made wiser decisions. Instead, when we were able to purchase a house in our dream neighborhood, I lost all good sense.
It wasn’t “perfect”
The house was big and had some great features, but it wasn’t perfect. And so, I began spending. I had flooring torn out and new floors laid, walls painted, lighting fixtures changed, and new countertops installed. You name it, and I probably spent money making it happen. I spent like money was no object and nothing bad was just around the corner.
The bottom fell out
The fact that we purchased the home in late 2007 probably gives you an indication of what happened next. The housing bubble popped like a balloon at a kid’s birthday party, the Great Recession hit, and unemployment rose from 5% to 10%. 15 million Americans were suddenly out of jobs — my husband among them.
Being the vice president of manufacturing in 2007 was like being a sitting duck. VPs are typically the first to get cut, although we were just figuring that out. So, there we sat, in a big ol’ house that I’d spent far too much money renovating, without any consideration for what was going on outside my insulated little world.
A (not so) delightful experience
Fortunately, my husband was hired by another company almost immediately. And, although I did not want to move out of state again, taking the job was the smart move. Even as the housing market shook like an earthquake, we found buyers (for which I am still grateful). However, because the value of the house dropped so quickly, we had to buy our way out of the mortgage. At closing, instead of receiving a proceeds check, we had to write a check for the difference between the purchase price and what we still owed the bank.
That would have been tough enough, but making it far worse was the thousands I’d taken out of our bank account to get the house “just right.” I have beaten myself up for that mistake for years.
The upside of kicking yourself
One of my favorite writers, Anne Lamott, once wrote, “You have to make mistakes to find out who you aren’t.”
Anne said it more eloquently than I would have, but I too believe that mistakes can change us in a positive way. The foolish amount of money I poured into that house has stuck with me for years, but it’s also helped me realize who I’m not. I’m not someone who throws money around like confetti on V-E Day. Although I might have been blindly optimistic at one time, I’m cautiously optimistic today.
And that’s the great thing about making mistakes. Mistakes, and the resulting regret, ultimately become the lessons that make us a better version of ourselves.
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