The now-millionaire remembers a time when he overdrafted his account.
Question: What has been your biggest spending mistake?
Aaron Patzer: My biggest financial mistake was probably, you know, in terms of scope it was probably, you know, not cashing out in the 2000 tech crash, but on a more personal note, I was 19. I had moved to Silicon Valley to work there for the summer. Apartments were really expensive. Since it was the first move I had made, I didn’t account for the cost of getting TV, Internet, power set up, all the furniture, all of the cleaning supplies and food and spices and cooking stuff that you need when you first set up an apartment. Overspent - it was a first and only time that I ever had my account overdraft. Got hit with a fee. The part of the mistake that I made was I thought I had enough saved up, but I didn’t realize that your first paycheck often takes not two weeks to get, but four weeks until, you know, payroll kicks in or until your direct deposit kicks in or if you open a new bank account, sometimes to prevent fraud on their part, they’ll hold your check for four or five days or ten days to let it clear when you think, “Oh, well I’ve got the check in hand,” or, “This is my pay period right now.” No, you don’t actually get to use the money for a couple weeks beyond that. And so, that sequence of timing and ill planning was just a bad combination and I was very, very depressed and very mad at myself for making that mistake.
Question: What is your weakness?
Aaron Patzer: As of late my the big surprise was I spend a lot more on travel and hotels and airfare than I ever thought. That’s probably my biggest area of spending. In fact, it’s probably, at this point, more than rent. You know, I just sold my company. I’ll have good proceeds from that. I’ll have plenty of money to do as I please, but I won’t. I’ll still live in my one bedroom apartment and drive my used cars and not go out too much, but the one thing that I won’t curb any more is, you know, good travel and good experiences with friends and family. And so, that’ll be an area where I increase my mid-budget.
Recorded on November 2, 2009