A few years ago we had two children get married almost within a year of each other and were also given a $10,000 tax bill at that same time. My husband enjoyed spoiling our children so he was adamant about not putting a limit on either wedding for our children, and they each spent about $10,000 each. That same year we had just bought a new house which we put a hefty down-payment on of $75,000 and at the time we had about $47,000 stacked away in stocks.
I had tried to convince him that we should sell some of the stocks to cover these expenses (taxes and weddings) but he refused and instead took out a second mortgage on our new home.
At this same time we had some credit card debt that massed into several thousands of dollars.
Around the time of the recession and housing market crash, my husband left me and filed for divorce. During the divorce hearing the judge was confused as to why we were paying interest on this debt when we had money stacked away in stocks, and ordered that they be sold to pay off what debt it could.
But since this was during the recession, the stocks were only worth a fraction of what they once were. We also had to sell our house as part of our divorce settlement, which meant it was also sold for a fraction of its original worth, while trying to finish paying off the two mortgages.
Total lost during this entire debacle, after the sale of everything to cover expenses we lost about $30,000.
Submitted by: Roseanne
Pride has no place in the financial world. Being too prideful to sell an asset in order to prevent yourself from digging into a hole, or pride that forces you to spoil your children to the point where it also puts you into debt is just ridiculous. Not only is it ridiculous from a common sense stand-point, but it also hurts your children by not teaching them financial discipline and instead giving them a sense of entitlement.
Never given children an open-ended offer financially, and what good is a nest-egg if your debt is larger than said nest-egg? It only sets you up for financial ruin at a point where it might be too late to fix it.
Amount Flushed Down the Money Drain: $30,000