Looking for more? Last year, Jason and Regina recorded a special Halloween episode of Money & Taxes from Bb to XYZ that touches on some of these scary stories and many more! Check out “Eek! Spooky Finance & Tax Horror Stories 🎃” or listen to our brand-new 2024 episode, “Halloween Savings Hacks” when it’s released on Halloween!

Halloween is my favorite holiday. And before you ask, The Nightmare Before Christmas is both a Halloween and holiday season movie. (I’ll be watching it multiple times between now and the end of the year.) The thing is that it’s not exactly scary. So in honor of Halloween, I’m bringing you three quick financial horror stories from my own life. While I understand that you might not tell them around the fire, I hope they show you that even financial planners make mistakes — and can recover from them. I also hope that they bring a little real-life fright to your spooky season!

1. For years, I didn’t invest my Roth IRA.

That’s right! My favorite account type was invested in cash for years. Over a decade even! It was sitting at my old credit union in the Midwest. (Funny thing: That credit union is called Dupaco Credit Union. Its name is based on the Dubuque Packing Company, a former meat packing plant in that city … and I’m vegan. Eek!)

Sure, I invested it in Roth IRA CDs at the bank to earn a bit more interest, but it was still rather minuscule growth — even with compound interest over that time baked in. It was only after I started working with Jason here at FPFoCo that I wondered why I’d never invested it in the stock market. The reason? I wasn’t exposed to the possibility and opportunity for growth that the stock market could offer!

Once I knew, I made the decision to invest. I also helped my partner do the same, although a portion of his Roth IRA was at the bank until recently for a different reason. He was working to fully fund his emergency and future opportunities fund (EFOF), so we kept a year’s worth of his Roth IRA contributions at the bank. The reasoning behind that was twofold: One, for easy access, and, two, to shield those funds from market fluctuations. (Don’t worry, I’d already learned my lesson, which I passed onto him. The rest of his Roth IRA was already invested under FPFoCo’s management at Charles Schwab.) Another little fright for you: I kicked myself for not encouraging him to invest his Roth IRA funds at the bank in Roth IRA CDs. They would have earned so much more interest than the regular Roth IRA savings rate!

Scary, right? I hope this mini horror story goes to show you that it’s not always a bad thing to keep designated retirement funds at the bank — but that it doesn’t always make sense, either. If you’ve got Roth IRA dollars sitting in cash at your bank, let’s chat. From there, we can plan a move to invest in the market or at least in CDs if it’s the right thing for you.

2. I bought an extended warranty.

Let me set the stage for this scary story: In the year 2016, I bought Priuscilla. She’s the first car I’ve ever bought for myself from a dealership, and the process itself was pretty frightening. I was afraid the salesperson at the dealership wouldn’t treat me fairly and that I’d end up paying too much for my vehicle. While I’m pretty sure I paid a fair price, they never did provide the cargo cover that should’ve come with the car. But I digress.

I’d probably been saving for about a year and a half, and I spent all of my savings and borrowed money from family on top of that to buy this vehicle. While I had comprehensive and collision insurance to protect my new ride, I knew that other things could happen. Computerized mechanisms could go out. The engine could die. And then what? I’d be stuck with no savings, paying back a loan, and having to purchase another new vehicle on top of all of that. 

I’d already overextended myself financially. [Insert ‘90s Halloween sound here.] And then I let a salesperson from some random company scare me into purchasing a $3,000 extended warranty. Sure, I could pay it in installments with no interest — but I had to do it now because it was only available for a limited time! And I did. Did I ever rely on said extended warranty? No. (And how did they get my information to call me, anyway? I guess I’m lucky I wasn’t scammed out of more than that $3k, but still.)

Sometimes, it makes sense to buy different types of insurance to protect yourself. In my case, however, I threw $3,000 out the window of my new car on the highway to the hell of regrets. Do I actually regret it? As long as I can help someone else learn from my massive mistake, not really. 

If you’re thinking of purchasing a vehicle, let’s make sure it works in the context of your financial plan. Borrowing money, including taking a 0% loan from family or a dealership, isn’t always a bad idea. But taking too much of a loan at too high of an interest rate could strain your monthly cash flow — not to mention your relationships in the case of familial borrowing. Yikes! 

3. I paid for duplicate phone insurance for far too long.

Please don’t shame me for this one. Like I said, insurance has its place. This one shouldn’t have had two places in my life for as long as it did, however. Here’s what happened: I bought a new iPhone — get this — on Halloween in 2018. I’d recently started working at FPFoCo, and I wanted to do the financially savvy thing. So I did a buy-one-get-one-free deal as I was going to visit my mother a few days later and because she needed a new phone, too.

No jump scares so far! But then I bought Apple Care and Verizon device protection. Why? I’m not sure. I think it had something to do with a combination of factors. The main ones were that the free phone came as a series of credits to my plan over years and that I’d just spent a lot on my phone. I certainly didn’t want to pay for another new phone when I’d just bought one! 

To top it off, I still had the Verizon device protection on my phone plan for a few months after my phone was paid in full and the credits on the second phone had ended … and I later did the same thing on my partner’s phone, having him pay for coverage he no longer needed. I should’ve turned the extra protection off when I got down to my last few payments and could’ve paid for the final balance due and a new one from my EFOF if needed, but alas. 

I finally got a new phone earlier this year, more than five years after I’d made that Halloween purchase, and I didn’t buy any insurance or even do Apple Care Plus this time. Why? My EFOF can handle the cost of a new one, so I’m self-insuring this time. I hope that doesn’t come back to haunt me!

I also hope you enjoyed taking this little trip down memory lane with me. Well, memory lane if it were especially dark and foggy with eyes peeking out from either side of the path and bats swooping down at you! Happy Halloween — and happy financial planning!