I’ve made some pretty dumb debt decisions in my life. I’ll list my “Top 5″ starting with the “dumb” and finishing with the “dumbest”.

Dumbest Debt Decisions Ever: #3

When I was 18 years old, I financed my first brand-new car. My parents had purchased a used car for me when I turned 17, but I was determined to “get something cool.” I was a senior in high school and I was working for the local hospital. I was working for $5 an hour and my monthly take-home pay was roughly $600. So, I figured I could “easily” swing a $250 car payment. (Forgetting, of course, that I needed to pay for: gas, insurance, oil changes,etc. Plus, I was 18 and dating.) My father co-signed a loan with me, and I purchased a brand-new, 1993 Eagle Talon. (An Eagle Talon is a little “sports car”. Mine was black! I thought that I was the coolest guy in the world.) The total price for the car was about $13,000. I financed the car for 5 years, and my payments were about $275 a month. Here’s a brief history of the Eagle Talon:

I purchase the car for 13K.

I make 3 or 4 payments.

I quit my job, and get behind on my payments.

My dad has to take over the payments.

I feel like a total loser.

I finally get a new job, and I manage to help with making some of the payments.

My dad ends up paying about 75% of the car payments over the next few years.

After about 6 months, the paint began to come off of the car. The auto dealer says it’s my fault and will do nothing about it.

I own the car for about 3 years, and then I try to trade it.

The dealership will give me a grand total of $1000 dollars for the car. This is less than I owe on the car! I’m upside down on the loan. What do I do? Well, I roll the OLD loan into a NEW loan for another car!

An 18 year old kid working a part-time job has no business financing a new car. I should have been happy to drive the used car and I should have saved up to purchase a newer car.