A Few Mistakes Made & Lessons Learned

A Few Mistakes Made & Lessons Learned

A Few Mistakes Made & Lessons Learned

When I was a kid, I thought being an adult was synonymous with being perfect and all-knowing. At age 18, I’d be a perfect being. It was a difficult bubble to have burst. That said, as we get older, we should be getting wiser. Each day is another opportunity to learn from the mistakes we make. So by the time we’re like 50, we should have run out of mistakes to learn from, right? And by then we’re perfect beings. Right??

Learning from our mistakes seems like it’d be pretty automatic. But here’s the thing. A few nights ago in my rush to eat something piping hot, I burned my mouth. Me no likey. Yet it’s happened dozens of times, and I’m sure it’ll happen again. In fact, it happened to Johnny last night. It takes sharper tools in the shed to know to wait for pizza to cool before affixing its molten lava cheese to the roof of your mouth.

And here’s another example: As a freshman in college, I overdrafted my checking account, which was embarrassing to the point of causing tears to come out of my face. But I have a secret. It happened a second time right before I married Johnny. Although I hated the feeling of overdrafting, for some reason I let it happen again. But unlike the case of eating piping hot food, I’ve learned from that mistake, and I track my saving and spending now.

Even as a married couple, we’ve made some financial mistakes. You heard that right… we still aren’t perfect. I’ll give you a second to pick your jaw up from the ground. You live and you learn (so said Ms. Alanis Morissette), and here are three mistakes we’ve definitely learned from:

Applying for Pell Grants

This was our very, very first mistake made as a couple. Technically, it was just my mistake, but it became our mistake since it affected our combined finances. It was a few days before our wedding, and I was so stoked to be eligible for a Pell Grant once I got married since I hadn’t been eligible before that point. Thus, I decided to get the ball rolling and apply for a Pell Grant three days before Johnny and I said “I do.” But soon after Johnny and I were married, I found out that I had been denied a Pell Grant. Why? Well, apparently eligibility is based on your marital status on the date you apply!! So because I applied three days before I was actually married, I was only eligible for loans—no grants! No amount of arguing and pleading with the FAFSA folks over the phone would get them to change the application date. We’re still bitter about that little bit of bureaucratic letter of the law bull. This mistake cost Johnny and me a few extra thousand in debt. It was terrible.

Car Buying in Winter

Johnny and I bought our first car together the January after we graduated. We lived in Utah — Utah in January is frigid. We found a 2006 Ford Focus with low mileage for an incredible deal. Everything about the car was pristine. So we bought it. And then in May we drove to California. And in order to get to CA, we had to drive through Nevada, which is a very warm place in May. So we tried to turn on the car’s air conditioning and… drumroll… nada. nothing. zilch. zip. But we were like, “No big deal! We just need to pick up some AC fluid (I’m super technical with car terms if you can’t tell).” But as we tried to find out more info about getting our AC to work we found out the truth. Our car was not equipped with AC at all. We could buy AC fluid all day long, but there’d be nowhere to put it! Luckily it was still an amazingly reliable car, and when the time came, Johnny sold it on a 95-degree June day for a few hundred more than we paid.

Maximizing Retirement

When I started my current job a few years ago, I heard something about “retirement options” in my new employee orientation. At the time, I yawned and wondered when we were going to break for lunch. Because of my lackadaisical attitude, I missed out on two years of a 403b match from my employer! Dos años, folks! However, despite my negligence in contributing, my company automatically contributed 3% to a retirement account for me. Johnny and I got big packets about the plan every few months, and Johnny always asked me what it was for and I’d say,”No idea… I think it’s my life insurance or something. Or maybe it’s about retirement communities or something. Don’t know, don’t care.” But I’ve repented, and I now contribute 3% which is fully matched, in addition to the 3% they kick in for freebies. If I hadn’t missed out for those two years, I’d be a few thousand dollars better prepared. Grrr. Silly me.

Those are three of our mistakes that involved finances. And two of them were 100% my fault, peeps! What can I say? I like to keep Johnny on his toes! From each one we’ve learned some valuable adult lessons and moved on a wee bit more wise and mature.

So let’s recap. Pizza is hot. And it’s okay to make mistakes. Just try to learn the lesson and avoid doing it again. Have you learned from any financial mistakes? Any you’re willing to share, that is? My dirty laundry’s hanging out, and it’s feeling very lonely.

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  • Reply Elvin Peria April 18, 2013 at 7:30 am

    Good thing my wife and I are exposed to financial planning at the start of our marriage. So we are doing our best to maximize our savings and investments for our future. However, there was a moment when we became unhappy. The reason? We can’t go out with our friends because we don’t have a budget for it. We even can’t have a date because we don’t have a budget for it. We felt there’s something wrong. So we revised and allocated fun into our funds. We’re not yet perfect with our budget, but we’ll get there.

    • Reply Erin April 18, 2013 at 11:17 am

      We are there too Elvin! We are working so hard to pay off credit card debt from our travel abroad programs in grad school and save for our upcoming baby, retirement, a new car, etc… we were so proud of our budget. Until we realized we hadn’t put any money into the budget for occasional fun or special events. Like buying wedding gifts for friends and family, buying new shoes because mine literally had holes in the soles, or even going out to dinner for my husband’s birthday! So now we put $100 aside every month for these expenses. Its a little less that goes towards paying debt, but at least we are enjoying life a little more and reducing our stress. It was worth it for our marriage and our sanity.

      • Reply Elvin Peria April 18, 2013 at 11:04 pm

        Thanks for the comment Erin.

        I really think setting aside budget for fun makes us alive. I mean we’re not robots programmed just to save and invest for our future. We only have one life and I think we should definitely enjoy it. 🙂

      • Reply Joanna April 18, 2013 at 11:11 pm

        Agree with both of you!

        It sounds like you’ve found a perfect balance, Erin. Saving and budgeting isn’t sustainable if you’re not using some money for fun! Good luck with continuing the debt payoff process!

  • Reply Brian April 18, 2013 at 7:54 am

    My biggest financial mistake to date is letting a former roommate pick where we lived and trusting his judgment without seeing the place. I lived there for 1.5 years before finding someone else to move into my room. The place was disgusting… The basement was creepy on the level of “Silence of the lambs.” It was also a financial mistake because I had to put all the utilities in my names since I was the only one with good credit. In the end I was about $2K between the deposit and the amount my roommates never paid me back for the bills. I’m still bitter about the deposit (someone took it when they moved out 3 years later but no one will own up to it), but I am over the bills.

    I also burn the roof of my mouth every time I make a frozen pizza… moral of the story… never make frozen pizza

    • Reply Joanna April 18, 2013 at 11:16 pm

      Oh man, what a story. I can’t believe someone took the deposit!! And I thought my roommates not owning up to eating my food was bad. Here’s to life without roommates, amiright?

  • Reply Jane Savers @ The Money Puzzle April 18, 2013 at 8:43 am

    Some of my coworkers have been with the company for 20 years or more and have never contributed to the pension fund to get the small employee match so 2 years isn’t too bad.

    I was guilty of buying my sons things when I first separated from my ex because I felt a lot of guilt and I thought things would make them happy. I could sure use that money now and the stuff did not improve their lives at all. They are happy productive young men but I still feel like spending money I don’t have on them to make their lives easier.

    • Reply Joanna April 18, 2013 at 11:34 pm

      20 years?! Oh, my wallet hurts for those people.

      You’re doing the best you can with your sons. I think most people would have responded the same way you did in your situation. It’s obvious you really care about and love them, which is what really matters — not stuff.

  • Reply Mrs. Pop @ Planting Our Pennies April 18, 2013 at 8:47 am

    I *literally* missed a memo on a change to our 401K plan that extended the matching amount. So by not reading that and boosting my 401K contributions a couple years earlier, we missed out on a couple grand, too. No fun. =(

    • Reply Joanna April 18, 2013 at 11:36 pm

      Oh dang it. Hopefully we’ll have so much saved up come retirement age that a couple grand will just be chump change! 😉

  • Reply Rob April 18, 2013 at 9:26 am

    “So by the time we’re like 50, we should have run out of mistakes to learn from, right?”

    We all should be so lucky !!! 🙂

    I’m sure that you’ve must have read about the horror stories that happened around 2008 and thereafter, especially in the US, where people got overextended in their home mortgages and had no choice but had to walk away from home ownership after foreclosure. These were peeps who couldn’t really afford homes in the first place but the banks made it so easy to take out a mortgage on one. Or others who made bad investments and lost much of their retirement savings and now can’t afford to retire but must keep working past 65. People can make mistakes at any age – right up until the day they die.

    Fortunately, we’ve been lucky so far (touch wood). Years back however I did make one investment decision that I wish that I had done differently – invested a large sum of money over a 5 yr period with a financial institution but, due to economic conditions back then, I never earned a cent in investment interest, although fortunately I didn’t lose any of the original money invested. Suffice to say, no one’s perfect.

    So the moral of the story:
    learn from past mistakes but don’t beat yourself up about them (water under the bridge)
    plan for the future but don’t worry about it because you haven’t arrived there yet
    live for today, enjoy it, but stay alert and educated about things.

    • Reply Joanna April 18, 2013 at 11:50 pm

      It’s true… no matter our age, mistakes can and will happen. It’s human nature. I’m glad to hear from someone like you who has been able to retire as they planned… I don’t see a lot of people who are able to do that these days!

      I really like what you said about planning for the future but not worrying about it. I tend to be a worrier, so that’s a good one for me to remember!

  • Reply Grayson @ Debt Roundup April 18, 2013 at 9:47 am

    My biggest mistake was to purchase a Jetski when I first got out of college and got my first paycheck. Did I need it, hell no, but I thought I wanted it. That thing turned out to be a nightmare and it cost me a lot of money. Post about it coming next week!

    • Reply Joanna April 18, 2013 at 11:53 pm

      I look forward to reading it! While getting the Jetski might have been a mistake, it sounds like you learned from it. And that right there will probably prevent you from making a similar mistake in the future!

  • Reply Emory April 18, 2013 at 10:02 am

    My husband and I are still in the newlywed period of our lives, but already we have managed to mess up on some big decisions more than once. At my husbands old job he kept getting memos about benefits packages and retirement savings plans, which he ignored. I was getting concerned because he had reached the end of his 30 days and should have been bringing home paperwork to fill out. I asked him about this and he said, “well, I think open enrollment ends tomorrow, but we don’t need benefits right now so I passed on everything.” Needless to say we remedied this situation before it turned into a full blown disaster. But had I not asked we would have missed out on an opportunity to start putting some money aside. Our second financial whoops came in the form of car insurance. My husband and I pay our car insurance plan 6 months at a time because we get a much better deal. Awesome! We did not, for whatever reason, put away money towards our six months of car insurance that came up in February. Oops. That made a huge dent in our bank account and we spent the whole month playing catch up for that one mistake. We have been fortunate to be able to bounce back from both of these could-have-been-disasters. But we have also learned a lot about communication and planning from these situations.

    • Reply Joanna April 18, 2013 at 11:57 pm

      It’s tough to adjust to making financial decisions as a married couple because you have to start communicating, like you said. Before marriage, you could just make those decisions on your own! It sounds like you two are figuring things out really well and learning how to prevent future mistakes, which is great!

      p.s. Johnny and I pay for our car insurance the same way!

  • Reply Vanessa@cashcowcouple.com April 18, 2013 at 10:10 am

    You’re not alone! I just confessed all of my money mistakes yesterday on my blog post! I made the 401K mistake as well. UGH. I now read the fine print. Always.

    • Reply Joanna April 19, 2013 at 12:08 am

      A few others have mentioned being in the same boat as us with missing out on our 401ks/403bs! I’m glad we all figured it out and are now on the right path!

  • Reply David April 18, 2013 at 10:32 am

    Joanna, when I first started working, my employers offered a 401(k) match of 5% and eligibility for a pension fund. Upon which I would get money for every dollar I contributed. Well, I decided to also yawn through those meetings and missed out on both. The 5% match wasn’t as big of a deal as not being eligible to contribute to the pension fund. Had I contributed to it for those 2 years, i’d be eligible for 300$ a month every month after I turn 65. Assuming I live to 90, that comes out to 25*12*300 or 300 * 300 or $90,000. 🙂

    • Reply Joanna April 19, 2013 at 12:10 am

      Oh man. Well, as another commenter said, it’s water under the bridge. I think the real problem is that we were all raised without a financial education, so we’ve had to learn the hard way sometimes… maybe they should start teaching practical financial advice in our schools!

  • Reply Emily @ evolvingPF April 18, 2013 at 10:44 am

    When I started contributing to my Roth IRA I was saving a set amont of money each month. But when I set up the account, I didn’t actually put the money toward the mutual fund I had wanted – I LEFT IT IN THE BROKERAGE ACCOUNT IN CASH! For 1.5 years!!!!!!! (More details in my link.) But I don’t regret it, actually.

    • Reply Joanna April 19, 2013 at 12:12 am

      Yeah, there’s no point in being hard on yourself. You’ve figured it out now, which is what really matters! And that’s awesome you’re contributing to a Roth IRA!

  • Reply My Financial Independence Journey April 18, 2013 at 11:00 am

    My two biggest personal finance mistakes were:

    1) Not budgeting and tracking my expenses. It’s amazing how much money you can lose when you don’t know where it’s going.

    2) Investing without a plan. Making money in a bull market is easy. Pick any stock and you’re good. In any other market, things get harder (but not impossible) so you need a plan if you don’t want to get slaughtered.

    • Reply Joanna April 19, 2013 at 12:13 am

      Totally agree with what you said about budgeting. Anytime I’ve guesstimated my spending over a month instead of actually tracking it, I’ve spent way more than I should have!

  • Reply debtperception April 18, 2013 at 11:36 am

    I have learned from my biggest financial mistake that student loans are bad and for-profit schools are even worse. Because of my mistakes, I will probably never have a full-time career and with 100% of my income going towards my student loans for many more years, I won’t be able to save for retirement until I’m approaching retirement age.

    • Reply Joanna April 19, 2013 at 12:16 am

      I’m sure you’re doing all you can, but it’s still a tough pill to swallow. Hopefully you can help others to not make the same mistake. And just keep looking forward — never back!

  • Reply Erin @ Red Debted Stepchild April 18, 2013 at 12:15 pm

    I overdrafted my checking account SO MANY times freshman year. I just didn’t pay attention to the balance or the pending activity. NEVER AGAIN! I also bought a car in January (a Ford Focus, no less), but the A/C works fine :).

    The one mistake I didn’t make was retirement contributions. I’ve been at my first “real job” for almost a year and a half and I’ve contributed enough to get a full match since my eligibility date. *pats self on back*

    • Reply Joanna April 19, 2013 at 12:28 am

      Awesome job on contributing to retirement, Erin. And good to hear about another person who has wisened up since freshman year! 😀

  • Reply Mary D. April 18, 2013 at 1:15 pm

    I think one (there are a few) of my biggest has been with credit cards. The man and I were struggling last year after he quit (or was it fired? same thing!) his part-time morning job that racked in $600 a week. At the same time, we had just had a baby. We needed extra cash. Fooling around online with my credit card accounts I noticed that I could make a balance transfer.. CASH right into my checking account. I didn’t use it to pay off another credit card, I used it for personal uses. I made several balance transfers anytime we were low on money. We’ve since been able to catch up with our bills and the man has since gotten a new part-time for the morning. He doesn’t make as much as before but its at least an added $1000 a month. We also started up an emergency savings again just in case.

    • Reply Joanna April 19, 2013 at 12:32 am

      Well, the important thing is that you’ve figured it out and are moving forward, Mary! There’s so many people who never figure it out and just stay on the same bad path.

      While I’ve felt dumb about a lot of the things I’ve done, I’m grateful for them because I’ve been able to live and learn!

  • Reply Shannon-ReadyForZero April 18, 2013 at 2:40 pm

    Some of my biggest mistakes were not applying for more scholarships and, after graduation, not focusing on saving because I thought I didn’t earn enough to do so. Had I created better budgeting habits then, I likely would have been in a much better financial situation for years to come. Now I’m finally on the right track, but it took many years to get there!

    • Reply Joanna April 19, 2013 at 12:34 am

      Glad to hear you’re on the right track now, Shannon! Here’s to looking forward and learning from what we’ve done!

  • Reply Byron April 18, 2013 at 5:01 pm

    I’ve made a lot of mistakes in the past, but probably one of the ones I regret the most is taking out too much in student loans in grad school without fully understanding the consequences.

    I had my law school tuition paid for in full by my dad who is a us army vet but I still somehow managed to take out around 55k over 3 years for living expenses. I think I could have spent 2/3 that amount if I had been more conscious about eating out and rooming with people my first year in school instead of living on my own.

    It’s just so easy to see that loan money in your account and not really know what kinda long term consequences there are that come along with it. Definitely an expensive lesson learned that I am having to deal with today.

    • Reply Joanna April 19, 2013 at 12:41 am

      I hear ya, Byron. I had no idea what I was doing when I took out school loans, and a lot of that money was spent unwisely, too. I think a lot of it has to do with most of us being thrown out into the real world with absolutely no financial education. Hopefully we can prepare our own kids financially so they make fewer snafus than we have! Here’s to learning and moving forward!

  • Reply Becky @ RunFunDone April 18, 2013 at 9:08 pm

    Well I wouldn’t blame myself for #2 too much if I were you! You needed a car in the winter and you shopped for a car in the winter…I don’t know what you could have done, other than driving into a heated garage so you could test out the A/C!

    • Reply Joanna April 19, 2013 at 12:42 am

      Good call, Becky! I just had to add one in the mix that I wasn’t completely responsible for to even things out a bit. 😉

  • Reply Diane April 19, 2013 at 12:44 am

    OMGosh… how much time & space do you have for the list? As newlyweds my ex-husband & I financed a small house at 11 3/4% interest~ the going rate in 1983! That was bad, but what was worse is that we didn’t refinance when the interest rate dropped, because he wanted to buy a lot & build a house instead. When the bottom fell out of his business, I ended up divorced, with 2 small boys, and an IRS lien against the house for his business taxes, plus $750K in business debt. (Thus the EX-husband!) I filed bankruptcy and waited 10 years to have the lien removed from my house, paying many thousands of dollars in interest until I could refinance. Does that make you feel any better about your mistakes??

    The take-away from this, is be sure you know what your spouse’s money habits and policies are and know what the other person is doing! This is just one of my money mistakes, but it was definitely the biggest. The good news is that my house is now close to paid for, my car is paid for and I have savings in the bank and no debt other than my mortgage. If I can recover from my mistakes, anyone can!

    • Reply Joanna April 19, 2013 at 12:53 am

      The best suggestions I’ve ever gotten are from people who have actually lived through the mistakes. Your advice is definitely some I’ll take to heart.

      And how awesome that you’ve bounced back! What an inspirational story you have.

  • Reply TyS April 19, 2013 at 2:10 am

    For the first several years of my working life my policy was basically to spend now and save later. Well, I did manage to save up a couple grand at one point but I haven’t seen that much in my account in a long time. My problem was that I would look at my goals and think that it’s going to take forever to reach them. I’d become impatient and knowing that I would kick myself for it later go spend money on something else. Sometimes they were legitimate needs, oftentimes not so much. So my mistake was that I wasn’t patient enough.

    There’s also the not paying much attention to 401k’s, pensions, ira’s, etc etc. I’m still learning. At least I don’t have a credit card. I can only imagine what I might have done with one of those.

    • Reply Johnny April 20, 2013 at 2:36 pm

      We have a similar mindset with our retirement savings right now. It’s really hard for us to put a good chunk of change away into 401k’s and IRA’s when we know it’s going to be YEARS and YEARS before we ever see a dime of it. We know we’ll be better off for it, but that’s why we take it directly out of our paycheck so we never see it and never have to make a decision where it goes.

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