One of the phrases that Dave Ramsey has become popular for is when someone has to pay “stupid tax.” And it probably isn’t his, but I have heard it most when listening to his show. Today, I was driving to work and I was listening to some old segments of people paying some stupid tax. In essence, stupid tax is where you buy something or do something that actually costs you more money than what it was worth. It could also be just a dumb financial mistake. I have revealed my financial mistakes in the past but I thought it would be a fun blog post to rehash and share some of that stupid tax in the past. I also hope that people will share their stupid tax mistakes in the comments. We all make mistakes. It doesn’t matter if you are the smartest person with money in the world we all have made dumb mistakes or paid for something that we didn’t use or regretted. So I have three stupid tax stories.
First, I remember when I was going to graduate school in 2002 in Atlanta, GA. I decided to hire a mover to move my 1 bedroom apartment furniture to my new apartment in Atlanta. The problem was that the furniture was probably worth no more than $1000, maybe $2000 if I was lucky. However, I paid a mover over $1500 to move my furniture and he moved it in my birthday when I was in the ATL. Instead of just selling or ditching the furniture I decided to take it with me. I rationalized it by saying I didn’t know anybody or where to go so that I wouldn’t have to purchase new furniture in Atlanta. I probably could’ve gotten $1500 worth of furniture by just purchasing in Atlanta. What an idiot I was.
Second, (and another moving story) I remember that when my ex and I were moving in 2006 that we hired movers for our journey up to Boston. Hiring the movers wasn’t the stupid part (we had a house full of furniture). The stupid thing was that we had received a free car from my in-laws about a year or so before. It was a Dodge Avenger that was maybe worth $3000. Well, my ex refused to drive on the freeway in our move up to Boston. Thinking that we needed two cars we got the brilliant idea to hire a private company to move our car up to New England. It cost us $1200 to move a car that was worth maybe 3000. And a car that I sold about a year or so later for about $1500. We didn’t, as it turns out, need the car. And we could’ve just sold it and bought another car, but for whatever reason I figured we needed the car. Again, stupid TAX!
Probably the biggest stupid tax I ever paid was when I was in graduate school again. It was an early December morning in 2001 and I was running late for a final. The night before I had called my car insurance company and I had cancelled my collision coverage because I didn’t think I needed it. I mean my car was paid off and wasn’t worth that much. I think I purchased the car for about $4000 in 1999. Anyway, that night we had a pretty severe winter storm, however this is Minnesota. We don’t ever cancel classes. So I was late and I was driving to school when my car hit an icy patch and slid into the back of a parked car. Of course I was embarrassed, but this is where the stupid tax comes in. So I take care of the car situation and I go home to call Progressive and try to reinstate my collision coverage before they find out about the accident. Well, that didn’t work.
The next part is the worst. The car probably should’ve been totaled. It mean it was a bad accident. Instead, however, I decided to have the car repaired. So the car was repaired and it cost me $3000 (more than the car was worth) and I put ALL of the bill on my Discover card. I could’ve bought another car for that amount. Even worse is that they couldn’t fix the air conditioning in the car. So I drove around for another year or so with no air conditioning in summer heat and Atlanta humidity. I only replaced the car after I got into another accident (this time the car was truly totaled and I broke my collar bone in the process).
I know that there are more stupid tax stories, but these are some of the most severe. So what are your stupid tax stories? Share in the comments below. And don’t be shy everyone we have all done it.