$2,500 for 4 Pots, And Other Mega-Mistakes

I was watching Rachael Ray's talk show recently when she featured a young couple who spent $2,500 on four cooking pots.

Pots, I might add, they don't even use. They bought the pots in part because they were promised a free trip to Cancun. The couple was planning to use this trip for their honeymoon. But when they called to book the vacation, their claim was denied. It seems they hadn't registered for the trip within some 30-day window.

I sat there shaking my head, thinking "stupid, stupid, stupid." Who in her right mind would even spend $625 for one pot? For that kind of money, the pot had better be so automatic it slices, dices and cooks a meal by itself.

But before I got too smug, I began to wonder. Have I ever made a mega-money mistake?

I have.

I once hired a financial adviser who gave me some incredibly bad advice. He persuaded me to move some money I had in an individual retirement account to a mutual fund his company was pushing. The problem was the mutual fund wasn't really that much different than the one I already was in.

The cost of the switch: $1,800. That was his commission.

And to make matters worse, I watched as the old fund outperformed the new fund. Stupid, stupid, stupid.

I trusted the adviser without doing enough homework. That was a mega-money mistake.

What's yours?

Each year I have a contest to find the biggest penny pinchers. This year I'm starting another contest -- "My Mega-Money Mistake." To participate, send me a letter or e-mail outlining what you think your biggest financial blunder has been. The amount of money lost, misspent or mismanaged doesn't have to be huge. For someone making $20,000 a year, losing $20 to a fake charity can be a hefty chunk of financial pain.

Perhaps you refinanced your home to pay off credit card debt and then ran up the cards again. That's a mega-money mistake. Or maybe you co-signed for a car for your boyfriend. And now he's disappeared with the car, leaving you stuck with paying the loan. I'm not making this up. It has happened. One thing I won't do is co-sign for anyone other than my husband. Never co-sign for anyone for anything unless you are married. Co-signing means you are on the hook for the entire amount of money in question. It is a serious financial obligation.