If you’ve been reading here very long, you know I’ve done some TOTALLY stupid things where money is concerned. Between bankruptcy, credit card debt, and expensive tanning bed packages, I have been the poster child for financial mistakes.

Long ago, I decided I can either beat myself up about the dumb things I’ve done or learn from my stupidity and move on.

When I think about all the things I’ve done wrong, I realize that some of the lessons I’ve learned outweigh the facepalm factor. It may seem strange to say that, but I credit my financial past with giving me a road map to my financial future. Here are some of the things I’ve done that taught me way more than I ever could have found out on my own:

1. I took out a private student loan to pay off credit card debt.
Private student loans are a terrible invention. You can’t consolidate them with your federal loans, the interest rates are astronomical, and the payments start as soon as you take the money. The worst part is that I didn’t even use the money to pay for my education. I reasoned that I was paying off credit cards to allow myself to finish school, but that was a load of crap. I ended up maxing out the cards again within 6 months, so I had the new loan payment AND the credit card minimums. Seven years later, the $9500 balance is only down to $7900 because the interest is so high. Ugh!

Lesson learned: If you have to go into more debt to pay off debt, you’re doing it wrong.

2. I cashed out my 401(k) when I left my first job.
When I resigned from my first job out of graduate school, I had about $1000 in a 401(k). Instead of rolling it over or leaving it alone, I chose to cash it out, minus the penalties. I can’t even tell you what I did with the money, but I’m sure it involved clothes, shoes, and/or something electronic that was outdated within a month. If I had left that money in a retirement account, it could have grown to $1400 by now or $12,000 by age 65 without any action on my part. Basically, I gave away $11,000!

Lesson learned: Dipping into your retirement savings is like stealing from your future self. Don’t do it.

3. I saved “whatever is left.”
I’ve always had a savings account linked to my checking account. In my head, I was going to accumulate tons of money by saving whatever I had in checking at the end of the pay period. When I thought about how much my bills were vs. my income, I marveled at all the money I was going to save. You know how much I ended up with? Um, I think I had $50 in my account once, then I took it out because I wanted to go out for dinner. My savings plan was a big fat failure.

Lesson learned: Be realistic about what you’re able to save. Take it away through automated transfers as soon as you get paid, because if you wait for what’s left, there won’t be anything.

4. I lived WAY beyond my means.
We all know those people. The ones who think they deserve huge houses, fancy cars, and a closet full of designer clothes with the tags still on. The ones who have everything and still want more. For some strange reason, despite growing up in a blue collar home, I tried to be one of those people for a long time. I rolled my eyes when someone said, “Sorry, but I don’t have the money,” or “I can’t afford that.” To me, admitting I couldn’t afford something was out of the question. If I couldn’t get it myself, I’d charge it! And we all know how the story ends - with me budgeted to the penny and trying to get out of the holes I dug for myself.

Lesson learned: Wealthy people don’t have a bunch of stuff. They have money in the bank.

5. I taught my son that money grows on trees.
This is the hardest failure for me to swallow and one that I’m working actively to change. Although I tried to teach him that you have to work for the things you want in life, my son grew up watching me buy all kinds of junk on credit and spending even when we really couldn’t afford it. Now, a few months from his 13th birthday, he constantly asks for money beyond his weekly allowance. When I offer him ways to earn extra cash, he looks at me like I’m nuts. He totally doesn’t understand when I tell him we can’t spend money on something. “Oh my gosh!” he says. “We don’t have ANY money left?” When I explain that we do have money, but we need to save it, I can almost see the words floating through his ears and into oblivion. My son has asked for his own checking account, but he’s already spending the money mentally before he even gets it.

Lesson learned: It doesn’t matter what you say. Your kids will notice what you do. And they will always pick up the habits you least want them to imitate.

What financial lessons have you learned the hard way? Which ones are you still struggling with?