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Hey, guys. It's Chelsea from The Financial Diet, and this week's video is brought to you by Policygenius.

And this week, I wanted to do something a little different and kind of personal, which is talking about the worst financial decisions of my life. It is no secret to those of you who have been hard core fans of TFD that I largely started. The Financial Diet because I was such a hot mess when it came to my own money situation.

So when it comes to bad financial decisions,. I have plenty to talk about. But I think it's easy, if you're maybe more of a recent watcher or don't watch a ton, to assume that because I host this channel, I'm perfect with money and always have been.

And that is 100% not the case. It's very important for me to talk about the bad financial decisions that I've made, not just so that I can be honest and transparent and remind everyone that I am not perfect, but also so that I can potentially help some of you avoid these same mistakes, by not just exploring their impacts, but really what led me to make them. So let's get right into it with my seven worst financial decisions.

Number one was living in illegal situations. Several times between the ages of about 18 and 23-ish,. I lived in living situations that were in various ways illegal.

Either I wasn't on the lease or there was no lease or it was an illegal sublet situation, or just in some capacity, I wasn't supposed to be there, from a legal point of view. And I honestly did this mostly because I didn't have any credit. So the option of me getting my own rental or getting some sort of legitimate on-paper situation was slim to none.

And it's important to know more generally the structure of leasing and subleasing and what is and isn't allowed. In general, if the lease doesn't mention subleasing, it is usually permitted. However, most leases do require that you obtain your landlord's consent to sublease, as well as your landlord's approval of any new subtenant.

Whether or not your rental lease is silent on subleasing, consider contacting your landlord before subleasing to help maintain a good landlord-tenant relationship. Long story short, you often can do it, but do not want to get in a situation where you're doing something you shouldn't be, and potentially seriously angering the person who could put you on the street. But even in my situations where the sublet situation was OK with the landlord, by not being on any paperwork,.

I was opening myself up to a ton of potential risks. And while nothing terrible happened to me during those times-- knock on wood--. I know people personally in my life who have been in such a terrible sublet situation that they've literally had to escape their apartment in the middle of the night when no one was home.

And while it may not get to that extreme, if there is ever a dispute around the money that someone is owed or who has a right to be where or belongings that you may have mutually paid for, remember that not being on the paperwork completely screws over any rights you might have. If you are not on a lease or a sublease slash rental agreement, you are not granted tenants rights, such as the right to a habitable home, anti-discrimination, security deposit limits, et cetera. Living in these situations was such a terrible decision for me, because I ended up wasting so much money overpaying to compensate for the fact that I couldn't get a legitimate situation.

And what I got for that extra money was a way worse living situation. Point being, even if you maybe have to wait longer to move out of your parents' house, wait until you can do it in a way that makes sense legally and financially. Number two was not having any savings, literally.

So before I get into my story, I think it's important to understand just how common having little to no savings actually is in America. Only 39% of Americans when surveyed said that they would be able to cover $1,000 setback if it came up. And just under 20% of those surveyed said that they would have to cover it with credit cards and pay it back over time, which if you even can pay it back, means that you are automatically paying more for it.

And overall, the average American has less than $4,000 saved total. And if you consider that the TFD standard for a solid emergency fund is about three months of total living expenses, that is almost certainly nowhere near what most people need just to cover emergencies. But in my case, I was not just one of those people who had under $4,000 saved.

I was a person who had negative money saved. From the ages of about 18 to 22, I literally only had my checking account, which I was frequently overdrafting, and then closing or abandoning those accounts to open up a new checking account, because I couldn't afford to pay all the compiled overdraft fees. And this is particularly bad, because between the ages of about 13-- when I started babysitting for money-- and 18, my parents made me save 75% of every paycheck.

I got from all of my summer and after school jobs, including ones that paid decently, like retail jobs with commission. But the day I turned 18 and got access to that account, which had at that time around $14,000 in it,. I spent every last penny in that account over the course of a few months on literally nothing.

I can remember. And during that time, once I had spent that initial money,. I really looked at money fundamentally as something to spend and enjoy, never something to save.

Which is just a bad idea even if nothing bad ever happens to you. But in my case, when I added it to my overall sense of irresponsibility, I kept finding myself in situations where I needed or owed money on short notice and couldn't pay it. And in my case, that resulted in a situation where I accumulated many unpaid parking tickets and moving violations, which I simply didn't have the money to cover, which quickly resulted in a suspended license and suspended registration on that car, which resulted in me being arrested when driving home one morning after spending the night at a friend's house.

Now, am I going to pretend that my arrest story was some terrible, sordid affair that completely changed the course of my life forever? No. All things considered, I was pretty lucky and privileged in that situation, and was able to move on from it without terrible long lasting effects.

But it was also humiliating and expensive and extremely avoidable. And the vast majority of how I got myself into that trouble to begin with was not having an emergency fund that I could dip into when I first got a ticket. Which let's be honest, we'll probably all get tickets every now and then.

Because if I had done that, they wouldn't have snowballed, and eventually done all of those terrible things to my license and registration, and eventually my ability to not be handcuffed in the back of a cop car. The moral of my story, have an emergency fund. Number three was dating a financially abusive partner.

And I hesitate to even call this a bad financial decision on my part, because at the end of the day,. I didn't knowingly choose to put myself in a relationship with someone who would use money in a very negative way with me. But if I had known how to recognize some of these signs earlier, I could have likely gotten myself out of this situation before it spiraled out of control and left me in debt.

Without getting into too much detail,. I dated a guy once over the course of several months who was overall an emotionally pretty abusive person. He would say things that were extremely nasty and meant to demean me when I did things that he didn't like.

And suffice it to say, nearly everything I did was something he didn't like. And I learned to be very nervous and anxious in his presence, because I didn't want to upset him. But I also from day one of that relationship felt an extreme power imbalance, because he came from a very wealthy family, and himself personally had a lot of money.

And because of that really big discrepancy in personal wealth, one of the tactics that, looking back, he used to keep the power imbalance always in his favor was he would insist that I pay for things over and over, and get very, very judgmental if I said I couldn't afford something or would rather not spend money on it. He knew that I had almost no money. And feeling like I was constantly on the verge of not even being able to put enough gas in my car to get home kept me very much on the defensive.

I remember once we were at a restaurant, and he ordered much more food and drink than I did or would have, and literally he left me with the bill, knowing that the total was probably more than I had in my checking account at that time. I ended up going into about $1,000 of debt that summer just to feel like I wasn't constantly embarrassing him by being broke. And that was just my manifestation of a financially abusive dynamic.

But it can be even more fraught when you're in a relationship where your finances are combined, or perhaps one person depends entirely on the other for their financial stability. And it's estimated that some element of financial abuse occurs in about 98% of all abusive relationships. Because money isn't just a way to really control someone on a day-to-day basis.

It's also a way to express and enforce power. My feeling an extreme sense of shame and embarrassment around not having enough money to keep up with him kept me quiet and in a much more accepting role for all of the other not great stuff he was doing. And here are some other signs of financial abuse that you might want to look out for in your own relationships.

Substantial increases in joint activity and/or substantial withdrawals from a joint account, individual confused about missing funds, forged signatures, caregiver seeks to cash the individual's disability or paycheck, someone coercing an individual to cover their own expenses, and jewelry or other valuable items missing. But as a more general rule, if someone in a relationship makes you feel actively ashamed or embarrassed about your financial situation, you should not be with that person. Number four was ruining my credit score.

Now, this is probably the thing that I've talked about the most on this channel from my own personal life. And I do it for a reason-- not only because it was something that was so avoidable and had such a broad impact on my overall life, but because it's something that so many people don't understand. From the ages of about 18 to 22, I had the lowest possible credit score basically that a person can have.

And if you don't know what a credit score is, this is what it is. A credit score is a statistical number that evaluates a consumer's credit worthiness and is based on credit history. Lenders use credit scores to evaluate the probability that an individual will repay his or her debts.

A person's credit score ranges from 300 to 850, and the higher the score, the more financially trustworthy a person is considered to be. And for myself, once I had ruined my credit score by initially getting a credit card at 18 with a $500 limit, maxing it out, and then throwing away all of the statements to repay it, I felt that, whatever, I'm screwed,. I might as well not even try.

And it's easy to feel hopeless like that when your credit is in a really bad spot. Because your credit isn't just a number. It can affect almost every element of your financial life.

For me, it had an impact basically everywhere. I wasn't able to rent on my own. I couldn't get my own cell phone plan or a new cell phone.

I couldn't get any kind of car with a payment plan. I couldn't get a loan. I couldn't get a credit card.

Basically every avenue of financial maturity was closed off to me. And I first took a major step in turning my credit score around when I was 22 and finally had the financial flexibility to pay off that defaulted card, which had long since gone to collections in one fell swoop. But even if that's not available to you, if you are someone who's having issues with your credit, there are many steps that you can take to improve it.

You can start by paying bills on time. About six months of on-time payments are required to see a noticeable difference in your score. You can keep your credit utilization rate under 30%.

And one way to do this is to call your credit card company and ask to have your credit limit increased. And this is obviously easier to accomplish if you're in good standing with your payments. Then keep your card spending low so that credit bureaus can see you have ample credit available.

Don't close old credit accounts. Longer length of credit contributes to a higher score. And those are just a few of the strategies to building a score.

But even in the worst credit situations, there are options. For me, one of the biggest steps after that initial repayment to building my credit was getting what they called a rehab credit card. It basically has a $300 limit and very little flexibility to do any serious financial damage, but it allows you to prove month after month your ability to pay a bill back.

I got that rehab credit card when I was 24. And it was not only a huge step in repairing my credit worthiness, but also proving to myself that I was capable of being an adult. So even if your credit score is in the dumpster, there are options.

We'll link you to more reading on credit scores and how to improve yours in the description. Number five was not speaking up at work. For basically all of my professional life before The Financial Diet, I never negotiated about anything.

First it was because I basically literally didn't know it was an option. But beyond that, it was because I felt so lucky and nervous to have a job that I didn't want to rock the boat and potentially mess things up. And this is something that according to the overall stats is extremely common, particularly for women.

Women negotiate less than their male counterparts. 68% of women accepted the salary they were offered and did not negotiate, a 16% percentage point difference when compared to men-- 52%. But not just in terms of salary. I didn't even negotiate about day-to-day things, whether it's work-life balance or benefits or working conditions or essentially any element of my professional life that could and should have been up for negotiation.

According to Forbes, women may not realize that many companies set aside money with the expectation that employees will ask for better compensation packages. And it wasn't just raw negotiation. I simply did not speak up to advocate for myself at work.

In fact, in both my staffer and my freelance life, there were two separate situations where I was treated in what I perceived to be a harassing way by a co-worker, or in the freelance case, by someone who was managing me. At the time, I never brought it up to a superior, partially because I thought that it could in some way jeopardize my career. But also because I just felt that dealing with harassing or inappropriate behavior at work was something you were supposed to do as a professional.

Obviously with the MeToo movement, we're learning that many, many women are conditioned to take these kind of situations and internalize them, because speaking up is perceived as being a whiner or greedy or not being able to get along with the regular workplace environment. But unprofessional or intimidating conditions are no part of a professional workplace expectation. And learning to feel that you are worth speaking up for and worth advocating for is crucial in any work scenario, whether that means negotiating or simply standing up for what you're worth.

Number six was not asking for help at home. So it took me a very long time to admit in my personal life that I needed help with either changing really fundamentally bad financial habits or doing things that came really hard to me. And I am not ashamed to admit now that when I was first saving up my emergency fund,.

I asked my now husband, then boyfriend, to take control of my paychecks and force me to save that money out of sight. Because I wouldn't be capable of doing it. I just didn't have the self-control at that time.

And if it hadn't been my boyfriend at the time,. I honestly would have asked my parents to do it. And by turning over those big things that were extremely difficult for me, I was able to focus on the parts of my life where I could really make improvement in my behavior, such as being diligent about the rehab credit card I was working on at that time.

And not everyone will have access to that level of financial help. But it's important to understand that for many of our really deep-seated financial problems and bad habits, they can be not dissimilar from an addiction in terms of breaking them. For me, impulsive spending was definitely in that category.

And learning to understand where you really need help, admitting it, and seeking it is hugely important. And similarly, there were things that were very difficult for me. Particularly as a freelancer or someone who had multiple sources of income, even many years ago, I learned very early on that outsourcing my taxes was very much worth it.

And this can be another area in which you can seek help. For me for the past seven years, I've been paying an accountant each year to do my taxes. And while it has cost me a few hundred dollars for my personal return each year, every single year, the savings compared to what I would have missed by not understanding it has been literally in the thousands.

Just a few benefits of using an accountant. They can help you find deductions you may not have otherwise thought of. If you've been contacted by the IRS, going with an accountant is a safer bet that you won't make an error.

And if you have certain circumstances, like multiple sources of income or an income property, tax paperwork can get very confusing. An accountant might save you a ton of time. And looking for help is not just about helping you do the things you can't or won't.

It's also about learning to value your time and seeing where you're wasting a ton of it by trying to do everything yourself. Even simply taking advantage of the people your bank likely makes available to you to ask questions can be a huge helper when you're not sure the initial steps to take to your longer term goals. As the CEO of a company, I am now faced everyday with a ton of bigger questions, strategic needs, and life decisions that I wasn't having to make even a few years ago.

And knowing how to ask for help on that and seek out the experts or convenient ways to do things is a huge key. Even something like getting life insurance as a CEO, which is something I'm now doing, has been something I'm so grateful to be able to seek out experts for. So often with personal finance, the answers and help are out there.

You just need to know how to ask for it. And remember, there is no shame in asking for help. Lastly, number seven, is spending because I disliked myself.

So as I may have mentioned on the channel before,. I spent my adolescence in a city that was very wealthy by national standards. Many of the people I socialized and went to school with as teenagers drove luxury cars, wore all incredibly expensive clothes, attended high schools that cost $30,000 a year, or owned boats-- their own teenage boats.

And during that time, out of that sense of shame and entitlement to have the things that the people around me had, I spent thousands and even tens of thousands of dollars on many of these superficial things that I can't even remember. I was obsessed with like brand name clothes and going to restaurants. I was totally ashamed of the fact that like my mom shopped at Marshalls and stuff.

I just could not get enough of this idea that what you bought, what you could afford, what you wore defined who you are as a person. I had a strong and unshakable sense that my inability to afford the things I wanted were distinctly preventing me from being the person I wanted to be. And today I can say that the number one thing that freed me from that cycle of spending because of personal insecurity and inadequacy was being really honest about money itself and the emotional implications of it.

Until you can be honest with yourself about why you want something, why you want to spend on this thing you can't afford, why you feel like you need this object to be a better person, you'll never free yourself from the dynamic of feeling like you're always one purchase away from the thing that's going to make you feel complete. I now can't get enough of talking about money, obviously. I love shopping on a discount.

I love getting the best deal possible. I love buying things because they make sense for my life and serve a purpose, not because they make me feel like I'm a better person. It's so important to remember that you are not your tax bracket or the label on your dress or even the car in your driveway, no matter how much other people and advertising might make you think that that's the case.

Spend because it makes sense, not because you're trying to fill some void in your heart that you can't even name, like I was. So as I mentioned, some of my worst money decisions have come from not facing up to the stuff I needed to do, and seeking out the best ways to do them. And like I said, a big part of that for me these days as a CEO and someone with a fair amount of responsibility is a good life insurance plan.

But let's be honest. No one wants to think about life insurance. But being a grown up means that you have to.

But the good news is that it doesn't have to be scary, and you can find what you need in as little as two minutes. Policygenius is the easy way to get the life insurance that works for you without all the extra stuff that doesn't. You can easily compare insurance quotes from over 15 carriers on one page so you can see apples-to-apples policies and understand what makes them different.

Plus, if you want to speak to someone,. Policygenius has a team of in-house licensed advisors who are ready to answer any of your questions and provide you with guidance and advice. Do something truly adult for yourself today, and make sure that you've planned for everything with Policygenius, at the link in our description.

You will be so glad you did it. So as always, guys, thank you for watching. And don't forget to hit the Subscribe button, and to come back every Tuesday, Thursday, and Friday for new and awesome videos.

Bye. .