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

If you are anything like me, you have probably been doing a little "retail therapy" this year to help deal with the stress.   Mostly for me, that has meant a slightly bigger grocery budget, and some extra money thrown at craft supplies to help keep my mind occupied on making things instead of doomscrolling on my phone constantly.  

But, I recently had to pay out a decently large sum to deal with some unexpected issues around the house.  I had enough to cover it, (thanks to some not so fun experiences in the past that taught me to be better with my money,)  but it got me thinking about the financial decisions I make every day. 

And since I was curious, I asked the team here to share their experiences and learnings.  Keep reading to find out what we wish we had known...

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@LisaNullar, Community Manager

As I mentioned above, I had a few experiences in the past that changed the way I manage my money.  And my previous issues centered around me not thinking through all of the associated costs of the change I was about to make. Moving into a bigger apartment meant higher heating and cooling bills, as well as more gas money because I had a longer commute to work.  Buying a new car meant fewer large expenses, but more regular maintenance and upkeep expenses, etc.

I had accounted for the initial larger outlay, but I wish someone had told me to take into account the smaller, less obvious but still related items that were also part of the change.   I did finally figure it out, and now along with being able to better plan for those big decisions, I have savings and emergency funds to cover the unexpected, but it took me stumbling a few times where I was scrambling to make ends meet before I figured it out.   

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@CoreyDenis, Social and Community Senior Manager

One benefit of living in a busy metropolitan city is the ability to walk (or ride public transportation) to go just about anywhere. Friends with cars in the city also regularly told me about their woes: trouble finding parking spaces, lousy parallel parkers who marked up their bumper or worse, and street-cleaning fines. Owning a car seemed more like an albatross than a useful tool. I didn’t have a car, and I was deterred from buying one.

However, I also love road trips. From Yosemite to Joshua Tree, all the way to our Mediterranean-like coastline, California is a road trip lovers’ paradise. For road trips, I typically rented a car.

Eventually, I grew tired of the lack of spontaneity. I could never just get in the car and drive to Tahoe; I had to plan the exact day, time, and length of stay before picking up a car I’d never driven before.

That’s when I decided to buy a car. I’m glad I did it, and am still very happy with the car I chose. I named it, as one does when she buys a car she loves.

But, I wish someone would have told me. . .

...About the impact of regular car payments on credit. As soon as I could afford to pay off the remainder of my auto, I went ahead and did it. But, once a vehicle is completely paid off it can negatively impact a credit score without proper preparation. Credit utilization is calibrated by the amount of available credit and has a high impact on a credit score. When a vehicle is no longer part of a credit line, utilization goes up. Oops! I could have prepared my finances, such that utilization was not impacted, or I could have simply, patiently, continued monthly payments for as long as the length of my car loan. Buying my first car led to my “aha moment” about credit utilization, which also led to a better understanding of how to maintain my finances. I’m grateful, but wish I’d known more about it before I bought a car and paid off my vehicle.

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@Ami_D , Community Moderator

I was lucky that they taught us some financial literacy in high school. One lesson taught us how much home we could afford based on the salaries of our dream careers (for me: author or graphic designer).

Learning those things led me to one conclusion: I’d never be able to afford a house. How on earth did anyone save up a 20% down-payment while still paying the bills? I knew it was possible in theory, with enough sacrifice and hard work, but ultimately I gave up before I could start.

What I wish someone had told me was that there were programs in place to help first-time homebuyers. That 20%, while ideal, was hardly a requirement for getting your foot in the door. Literally.

After an enlightening chat with my local credit union, I was elated to learn that not only could I afford a house, but a mortgage could be less expensive than my monthly rent. That doesn’t touch the additional costs and responsibilities of being a home owner but was still a large step up from feeling relegated to rental life forever.

I became a proud homeowner this year thanks to some of the programs available at the state and federal level, and could not be happier. Moral of the story: Never give up on your financial dreams, and always ask what your options are.

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Looking for more tips?  Take a look at what our friends over on the TurboTax Community have to add to the conversation.  

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