A Good Time Learn From Your Financial Mistakes

The end of the year is a time to look back and figure out what went wrong and what went right.

I'm blessed to say 2006 has been a good year for me. I launched the second season of my television show, "Singletary Says," on TV One. My second book debuted, "Your Money and Your Man: How You and Prince Charming Can Spend Well and Live Rich." And I saw an almost 80 percent growth in a financial mentor ministry I started at my church. The ministry helps women get their finances together by hooking them up with other women who can provide guidance and support.

But I've made my share of mistakes, too. I didn't rebalance my 401(k) retirement plan like my financial adviser told me to do at the beginning of the year. I finally did it after many, many reminders from her. I still haven't updated my will (since the birth of my third child). And I need to look into getting supplement disability insurance. I've got coverage through my job, but because any distributions will be taxed should I become disabled, I need to get a little extra insurance coverage outside of my employer's plan.

When it comes to personal finances, I would venture to say that most of us have made mistakes or failed to act when we should to prevent a financial crisis. Even the most successful businessman or woman has made financial mistakes.

In Kathleen Day's recent article, "Learn by These Mistakes: Financial Planners Say There Are Classic Ways People Let Money Slip Away," readers can learn from some well-know personalities who fessed up about their own financial blunders.

Real estate investor Joe Robert, radio personality Diane Rehm, investment banker Herbert Allen, baker Warren Brown and novelist George Pelecanos shared their stories with Day; the mistakes they reveal cost them from a few hundred dollars to several million.

As Day writes, "Their stories bear out what the experts say: Anyone can make a mistake with money. Financial planners say most miscues stem from failing to take a big-picture look at your finances that should tell you what you can afford, what your goals should be and what steps you can take to reach them."

Have you made a big financial mistake? How did you get out of it? I want to hear so that we can help others avoid the same mistake. Send me an e-mail to colorofmoney@washpost.com. In the subject line put "Financial Foul-Ups."

Year-End Financial Assessment

Now that you've read about the financial mistakes made by some now-successful people, you may be wondering just how you're doing financially? Well, I have a way for you to figure it out.

Read my column today to find out how to calculate your debt-to-income ratio. This isn't a perfect barometer, but it does help to see if you are carrying too much debt. Before the year ends you should also figure out your net worth. This way you'll have all the information you need to make those financial New Year's Resolutions.

Here's the article: Are You Financially Healthy? Do the Math.

Mom and Dad to the Rescue

Back in my BC era ("before children"), I thought that once my kids became adults I would be free. I now know different. You are a parent forever.

But when should you cut the financial umbilical cord? For example, should you lend your children the money to help them buy a home or stay in the one they have?

If this is something you are considering, read Martha M. Hamilton's recent column about family mortgage lending -- "Borrowing From A Mom and Pop" (Dec. 3).

Hamilton reports that a 2006 survey by the National Association of Realtors trade found that 9 percent of first-time home buyers borrowed from friends or relatives for their down payments. For some experts red flags go up when family and money is mixed. Things can get real ugly, real fast if circumstances go awry.

Real Estate Tips

Trying to shave a couple years off your monthly payments on a 30-year mortgage? Or what about that property line, can you move it? Going through a divorce and concerned about your home? Robert J. Bruss provides answers to these questions and more in his latest column "Paying Your Mortgage Faster" (Dec. 2).

And just how bad is this real-estate bubble-pop you've been hearing about. Kenneth R. Harney has some answers: "The Median Is the Message" (Dec. 2).

You are welcome to e-mail comments and questions to singletarym@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.