Tuesday, March 29, 2011

Learning from Our Mistakes

What mistake have you made financially that caused you to learn the most, turn around your life/way of thinking? What could you change if you had a financial do-over?

There were a few things that happened in succession that made me realize we were in deep, deep doo-doo. First of all, we were on the brink of becoming homeless. We weren't able to meet all of our financial obligations, and something had to give. I mistakenly thought that not paying the rent would be ok, and that somehow the money would magically appear out of thin air. Ha ha!

Secondly, we were getting repeated phone calls from collection agencies. The phone never rang anymore for a mere conversation. It was depressing.

We had just had a baby, hubby's income had decreased by some 55%, and then he was hospitalised for an injury. Our child was hospitalised shortly after being born. Our life was falling apart in every way possible. I stopped watching the cash flow. I was primarily concerned with making sure my guys lived through their respective medical crises.

Then the electricity got shut off. And the gas. Really cold showers and an inability to cook a meal made life very difficult for us. It was sort of a 'rock-bottom' for us.  I knew things had to change, and quickly. We were headed for financial ruin a.k.a. bankruptcy.

There was no single big financial mistake that we made that I would take back if I could. Most of my financial mistakes were caused by ignorance. I had no idea what I was doing. I had never budgeted, and had never learned how. I had no idea how to run a business from a financial perspective. If I could go back in time, I would definitely have gained more financial knowledge earlier than I did. I think though, that the rough times we had were not only the catalyst for change, but also gave me the drive to learn a better way. If I had learned the lessons earlier, perhaps things would have been better, but having tough times helped me to internalise the lessons that I needed to learn.

Today, most of the original debt has been paid off. There's only about $6,000 of it left, and is on the chopping block to be paid off this year. Over the last three years, we have incurred more debt, but from completely different sources. Yes, it would have been optimal to not incur any more debt, but it was not realistic for us. At least it's not credit card debt, being spent on stuff that we didn't want or need.

I look back to where we were three years ago, and think of how much has changed over that time, specifically with our mindset. We're both thinking about buying newer vehicles. But this time around, it's with a plan in place to save a majority of the purchase price first. I have money in retirement savings for the first time in my life. We are setting aside money for the kids post-secondary educations. We have a small emergency fund. And we sleep better at night.

And that, my friends, is what makes the whole journey worthwhile.

Have a great Tuesday.


  1. My biggest mistake financially was loaning money to a boyfriend. Of course I never got it back and that put me in a real bind. I had saved it to pay off my student loans. So I ended up paying it off monthly over the course of TEN years. Not my best decision obviously but I really learned a lesson and have been saving ever since!

  2. I need to give this question a bit of thought, because right off the top, I'm not sure what my biggest mistake financially was. I certainly know I do things differently now as compared to when we were living beyond our means, but the specifics elude me. Perhaps this could be a blog post in my blog next week. :)

    Anyway Eboo, I'm glad you got your money woes sorted out and are in a much better place today and in the future. Thanks for sharing your story.

  3. I definitely think the 2 biggest lessons that I have learned the last 3 years go side by side in learning and are connected. Planned Saving and having an Emergency Fund are 2 of the things I wish I had learned a long time ago. I got delusional about student loans and my partner and I got lax on paying them back, no biggie, someday, well that combined with buying a home and getting married all in the last 5 years has proven that CRAP HAPPENS! as Gail says and we needed to get serious and motivated about paying things off if we wanted to have a future.

    Lessons learned

  4. I can't pinpoint one financial mistake, just a series of many stupid financial moves..i.e. cashing out retirement accounts early, not saving enough, spending money on crap...you know, the usual.

    It sounds like you really had it rough for a while, I'm so glad things are looking up!

  5. That is definitely an inspiring story. I am sorry that you had to go though such tough financial struggles, but I am also glad to hear that you have your life in order now and are in a much better place. I am trying to learn from my family's financial mistakes and securing my future with a solid savings account (just opened it with Aurora Bank) I am focused and sticking to my goals! All the best to you and your family :)