A Financial Planner Admits Her Money Mistakes


Today’s post is part of a new series called “Life by De$ign,” which explores non-traditional choices that women make in order to make their finances work. 

I’m a 33-year-old financial advisor, and you can call me Joanna. I invest andmanage millions of dollars for people.

So why am I moving my husband and two toddlers into my dad’s house? 

Because we’ve been living beyond our means, (LBOM). Like the shoemaker’s kids who go barefoot, I tell other people what to do with their savings while my family has none.

LBOM, or the “L-Bomb,” as I like to call it, began when my husband and I bought our first house in 2005. We thought that to be “real adults” we had to buy a house. It was the height of the market, and we’d been outbid on four previous offers. Our desperation to buy caused us to act irrationally.

After using all of our savings for a 5% down payment, we took on a mortgage payment that ate up 30% of our net monthly income. I suggest to clients that it should never be more than 20%.


To finish reading this post, head on over to DailyWorth.
To finish reading this post, head on over to DailyWorth.

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    • Lastango

      Just an FYI… the links to the rest of the article don’t work.

      But, the bit that appears here seems very relevant. I’ve known people who bought a home because all their friends were buying, and they felt left out. They bought more house than they could afford, and they paid too much for what they got.

      LBOM is a disease. It always means debt, and interest payments. The payments keep people from accumulating the cash they need to start paying cash. So they’re trapped in the debt spiral.

      My sense is that flawed, marketing-driven aspirations are at the root of many of our cravings. We see affluent lifestyles in TV programs, hear about vacations in exotic locations, and want some of that glamour for ourselves. We don’t want to feel like losers in a mediaworld where the wealthy winners are the only people that matter.