When does spending become a money mistake?

Let’s be honest. Being an adult isn’t always fun. In fact, sometimes it’s just downright hard. And more often than not, there’s a steep learning curve – especially when it comes to DIY and finances. But what about if those two intersect?

Let me just paint you a little picture…

“When you make a mistake, there are only three things you should ever do about it: admit it, learn from it, and don’t repeat it.” — Paul “Bear” Bryant, American college football coach

Setting the scene

Moving house is expensive, as we discovered last year. And, after receiving multiple quotes ranging from £2,000-£3,500 to add grass and decking to our postage-stamp garden, we discovered recently that maintaining a house is expensive too. So we decided to do it ourselves and save some money.

We used £400 gifted to us by my lovely grandmother and added another £500 ourselves to cover the materials. After a week of free labour, we had beautiful grass. But it was short lived. A very hot summer and an adolescent dog with an affection for digging, meant we quickly found ourselves with a disaster.

Admitting defeat and calling the professionals

So, after a winter spent with a mud pit and hours wasted cleaning paws, the kitchen and scrubbing mud from the carpeted stairs, we caved in. We called the professionals, coughed up the £2,100 for durable dog-friendly artificial grass (lesson learned) and custom-fitted composite decking.

I practically cried the next week when I checked our savings and the balance showed £22! I felt like a complete hypocrite – especially writing about finances each week – but I learned a very important lesson: cheaper is not always better.

The £900 spent on our DIY garden was cheaper, but the garden lasted 10 weeks. This new garden, while expensive, has a 10 year warranty. That got me thinking: we don’t actually plan to live here for 10 years and we’ve more than certainly increased the potential rent of the property for future tenants…

So I called the landlord and stuck a deal. While they didn’t want to split the cost of the garden, we did agree on £100 for each year left on the warranty. So if we move out in 2 years, they’ll pay us £800 for the remaining warranty and appropriate paperwork – a sum they’ll likely recoup instantly with rental increases.

Side tip for renters: if you have a private landlord, be friendly. You’ll have a much better experience and they’ll probably be more likely to make improvements sooner and listen to your concerns.

Money mistakes and moving forward

We’ve all made money mistakes, or what we’ve viewed as irresponsible spending. Whether it’s forgetting a credit card payment or impulse buying a new outfit… only for it to sit in your wardrobe for months. My mistake was ultimately spending £3,000 on something that should have only cost £2,000. A huge expense, but one that didn’t have to drain my savings.

So when it comes to investing, what can we do to avoid mistakes? We all like to think we are rational investors. In reality, though, most of us fall into at least a few common traps. The trick is, to know what these traps are and then try to avoid them.

And, if you are unsure about what fund choices to make, then again you have the option to leave it to the professionals. It might cost you a bit more to have them decide your asset allocation for you, but in the long run, it might pay off.

Find out more about multi-asset funds

Four multi-asset funds to consider

BMO MM Navigator Distribution

This is a multi-manager, multi-asset portfolio, which generally contains between 25 and 35 individual funds, balancing diversification and risk. The team behind it have worked together at three different companies over many years – always staying together.

Brooks Macdonald Defensive Capital

The manager of this defensive multi-asset fund uses the range of tools available to him to dial up or dial down the fund’s sensitivity to market movements, which results in an intelligent investment mix that should see investors through a range of market conditions.

Liontrust Sustainable Future Managed

This multi-asset fund may appeal to those wanting to invest more sustainably. The managers have identified three mega trends making the world cleaner, healthier and safer and, within these three buckets, they have identified 20 areas of predictable and resilient growth.

Premier Miton Multi-Asset Monthly Income

This multi-asset, multi-manager, multi-structure, fund has been designed to produce a high and sustainable income, and strong absolute and relative growth, through robust risk management. It may appeal to investors seeking a well-diversified and regular source of income.

This article is provided for information only. The views of the author and any people quoted are their own and do not constitute financial advice. The content is not intended to be a personal recommendation to buy or sell any fund or trust, or to adopt a particular investment strategy. However, the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Past performance is not a reliable guide to future returns. Market and exchange-rate movements may cause the value of investments to go down as well as up. Yields will fluctuate and so income from investments is variable and not guaranteed. You may not get back the amount originally invested. Tax treatment depends of your individual circumstances and may be subject to change in the future. If you are unsure about the suitability of any investment you should seek professional advice. Whilst FundCalibre provides product information, guidance and fund research we cannot know which of these products or funds, if any, are suitable for your particular circumstances and must leave that judgement to you. Before you make any investment decision, make sure you’re comfortable and fully understand the risks. Further information can be found on Elite Rated funds by simply clicking on the name highlighted in the article.