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.