Literally! Throwing money away! But, we’ll get to that later.
This post is an illustration of how our little habits, can make (or lose) us big money in the blink of an eye. Good habits can find us unexpected riches. Bad habits can be an absolute money suck.
I got a vivid lesson on that last week, when the opposing sides of my brain almost simultaneously made and lost me hundreds of dollars. Here are their stories:
Left Brain: The Devil is in the details
Contracts make my eyes bleed. And I used to just kind of scan through them. Even the really important ones!
Contracts still make my eyes bleed. But I’ve gotten into the good habit of taking the time to actually read through paperwork, word for excruciating word. I’ve trained my Left Brain to hunker down and really dig into the details. And I saved hundreds of dollars last week because of it.
That’s not going to seem too impressive when I say that the contract was a purchase agreement to sell our townhouse for six figures. That’s why I put the words up there in bold italics. To give them the importance I think they deserve. No one can scoff at bold italics. Hundreds of dollars.
You see, my wife and I have been wanting to sell our townhouse for a while, but have been unable to until recently. It’s that classic story of love, marriage, two homes, the bursting housing bubble, renting out one of the homes for years while climbing out from an underwater mortgage, and monthly cash flow drain of about $250-$400.
We finally got a fair offer on the townhouse after it sat empty almost five months on the market and we had every intention of accepting the offer as-is when we got the contract. Here’s where I pat myself on the Left Brain… I read through the whole purchase agreement! Carefully!
And I found something! Something the old me almost certainly would have missed. One of the boxes that was checked had us, the seller, paying the difference between homestead property taxes and non-homestead property taxes for the rest of the year. Since we had been renting it out for years, the townhouse was considered non-homestead and taxes were higher.
Seems fair. Why should the buyer pay more in taxes, simply because we hadn’t qualified for the homestead exclusion? Well, it turns out the buyer isn’t planning to live there either. This is an investment property for them.
As long as that one box was checked, we would be on the hook for that extra money at closing, whether the buyer was planning to live in the home or not. That one checked box essentially amounted to us just giving money away. Depending on bank appraisal of the property, I estimate we would have lost $300-$320.
I know that’s not a whole lot of money in the grand scheme of the whole deal. But there was literally zero chance of the deal falling through if we disputed that part of the contract. The buyer’s agent may have just auto-checked that box from muscle-memory when drawing up the contract.
I wish I could say I found thousands of dollars of mistakes in that purchase agreement, but a few hundred bucks ain’t bad for 30 minutes of work. That’s almost two years of Netflix!
Well done, Left Brain. Take a well-deserved break and veg out on Stranger Things.
Right Brain: Throwing money away… again
Now, as for you, Right Brain… What the hell was that money doing on the shredder!
That’s right. My Right Brain. My artistic, carefree, whimsical Right Brain. The same Right Brain that brings you the exquisitely drawn and hilarious masterpieces that accompany these blog posts week after week almost absent-mindedly shredded two checks worth hundreds of dollars.
The checks were generous Christmas gifts from Mom and Dad and Grandma that I had forgotten to take to the bank and carelessly left on my desk along with piles of other paper clutter. Naturally, they ended up sitting on top of the shredder last week, sandwiched in between a pile of not-so-exquisitely-drawn reject sketches (I choose to shred the rejects so there’s no paper-trail proof that I don’t just draw masterpieces all the time).
Clearly, I’ve got a problem with clutter. Especially paper clutter. I’ve been battling that little bad habit all my life. It’s a product of my Right Brain shunning basic organization for basically any other shiny, happy, fun-time project.
This time it almost cost us $375. I know I could have gone back to my parents and my Grandma to ask them to cut us another check when I finally realized the money was gone. Awkward. And if I didn’t, my dad would have almost certainly asked about them after balancing his own checkbook.
But those could have just as easily been rebate checks from a business or bank. Banks don’t go out of their way to ask about un-cashed checks. I’ve learned that lesson the hard way.
Forget the checks. If I put everything else together, I’m sure there are thousands of dollars I’ve thrown away over the years of my adult life because of paper clutter:
I didn’t have that valuable coupon readily on-hand that one day. I didn’t keep proper track of car maintenance, so I overpaid on redundant repairs. Or I simply forgot to pay bills on-time (Thankfully, not so much of a problem anymore).
All because of a paper clutter habit I still haven’t gotten under control.
Damn you, Right Brain!… You’re such a fun guy, though.
So, there you go. A couple cautionary tales of how habits have directly affected my finances. For each of these stories there are countless more that are a lot more subtle. If I can lose (or make) hundreds of dollars in the blink of an eye like this, just think how all of my little habits affect my wealth over a lifetime.
Do you have any stories like these? I’d love to hear them in the comments. How have your habits (good or bad) affected your money?
Don’t forget to follow me on Twitter @cabbageblog
or follow me on Pinterest www.pinterest.com/crispycabbage