You’re Going To Make Mistakes

dog mistake

As with anything you challenge yourself to, you’re going to make mistakes along the way. This holds true in wealth management, too. You’re going to make mistakes on your journey to financial betterment, and that’s OK.

I repeat: it’s OK.

Sometimes they won’t even be mistakes, but you might read them as mistakes. Sometimes these so called “mistakes” will really be adjustments. Whatever goal you have in your finances, things will come your way that require modification to those goals. You shouldn’t be scared about that or consider yourself short because of them. Most importantly, you shouldn’t close yourself off because of these alterations.

I have had some very obvious mistakes in my finances leading up to the good part of my financial independence and stability, but I honestly believe that those mistakes were needed for me to learn more about how money works and how I can work with the money I have. Even where I am now in my finances (a good place), I still have the occasional hiccup.

For example, this month I am one week away from payday. Time cannot move fast enough. I have been crawling toward the 16th because I had several hiccups in my wealth management.

The hiccup? Well, there were a few.

  • I have not been actively keeping tabs on my spreadsheet. My typical behavior would be to check in on it once a week, but I have not been keeping up with this habit of mine.
  • I got into a minor fender bender, which resulted in an unexpected charge for a deductible and car rental fees. This particular hiccup was out of my control, but had I been keeping track of my spreadsheet better, then I would have been a bit more prepared for it.
  • I got cocky and began shifting money in my bank account from one goal to another. It started off by moving five bucks here, and then maybe 10 bucks there, and before I knew it my monthly goal amounts were all over the place. (For anyone not familiar with my bank, I use Simple which allows goal creation where you can set money aside for certain things like bills, etc. This feature typically holds me accountable for where my money is going, but this month I got a little careless with adhering to those amounts.)
  • I started using my credit card for everyday purchases, which is not what I had originally intended on. BAD HERSHEY’S CHOCOLATE BAR, BAD! These little things can add up.

I wanted to share this with you to show that there is room to make mistakes on your financial journey, and that realistically you will probably make some every now and then. I do not have everything figured out because I will always have room to learn more and enhance my habits.

The part that matters in this case is what you plan on doing to fix those mistakes that you make along the way. Don’t beat yourself up over them. Create a plan to overcome them.

In my case, the mistakes are no way dire partly due to the fact that I have been building my money skills for some time now. They are mistakes that I can easily correct this coming month, and in no way do they affect my bills.

If you make some financial mistakes along the way, what can you do?

  • Review what didn’t work (the mistake) and review what did work (what were the strong aspects of your finances this week/month?)
  • Take the things that did work and keep doing them. See if you can apply any of the strong aspects to what did not work.
  • Reflect on how you got to the mistake. Is it likely to occur again?
  • Create a plan. Don’t ignore. (Do you have to shift some priorities around? Do you have to side hustle? Do you have to sit out this weekend round of drinks? Do you have to wait to buy that one thing you initially wanted? Do you have to set up notifications in your bank app to keep track of spending?)

As with anything, allow yourself to make mistakes. Don’t let those mistakes overwhelm you because you are in control of your finances. Learn and remain proactive.

This has been it for your financial pep talk!

Money and Emotions: Planning for Financial Emotional Pitfalls by Onicia Muller

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This week we have a special guest post by Onicia Muller. When I set out with Breaking the Piggy Bank, I intended it to create an open discussion about money and ourselves. Onicia’s guest post continues the discussion we began last week with my post about Financial Literacy Basics: Habits Between Pay Dates.


Money and Emotions: Planning for Financial Emotional Pitfalls

During my final year of college, I found myself paying for a 3-bedroom apartment, 2 maxed out credit cards, overdue rent and utilities. Under our parents’ advice, my two sisters and I mixed finances so we could live in a nice apartment away from city distractions that most students faced. We coexisted mostly in harmony and our apartment was cheaper than each of us renting a room in a student flat.

Unfortunately, while away for study abroad and internships, my sisters and I fell out of touch and we neglected our bills. Since I was the only one physically in the building the following year, I had to take on all the bills or face eviction and debt collectors.

The Pig’s recent post on habits in between pay dates reminded me of some habits I developed to cope during that time.

When I confessed to my mom about my financial burden, I explained that I thought I couldn’t even afford a soda. She said, “Everyone deserves candy. Breaking your budget for one candy bar is not a crime. Don’t feel guilty.”

The two habits I then developed were changing when I opened my bills and when I did grocery shopping.

See no evil … until I’m ready

Most bills aren’t surprises. Even so, companies give you a reasonable amount of time to pay them. Instead of reacting I became proactive.

New rule: DON’T check the mail between Friday and Sunday. It’s very unlikely there’s a pending payment due within three days. So, chill out, ignore the mailbox, and enjoy the weekend.

Not letting bills interrupt my weekend reduced emotional spikes and therefore impulse purchases.

When I did check my mail, I didn’t open letters until I was ready to pay them (usually Thursday morning). To calm my nerves, I wrote (and still do) “seen” and the date on the envelope. Later, I wrote the “seen” and “paid” dates near the amount. These are things that I still do.

I was now in control and strong enough to face my financial demons. Now I needed to find a healthy way to reward myself.

Rediscovering joy for shopping

When you’re poor, spending money on ‘responsible’ things isn’t fun. My triggers (opening bills, meeting a school deadline, and prematurely celebrating booking a temp gig) were mostly under control, but I needed some retail therapy.

Impulse purchases on clothes or candy temporarily made me feel better. However, the guilt that followed was not worth it.  Instead of hitting the vending machine or ordering takeout every time I had an emotional spike, I changed how I did groceries.

I changed my shopping day from whenever to Thursday nights. We had three grocery stores within walking distance from each other, so I kind of got into meal prep and couponing. Nothing serious, I already and a thesis and bills to worry about.

As a reward for buying “real food” on discount, I felt confident adding value pack candy to my shopping list. I could now easily afford 1-2 sweet treats PER DAY without breaking the piggy bank 😉 .

Now, watch the magic.

It’s Friday (the weekend), my bills are paid, I have snacks and real food in the fridge, and I’m not being bullied by my mailbox. If I want, I could pack a lunch and chill in the city or parks and not waste money at fast food places. During the week, instead of hitting the vending machine for $1.25 Snickers because something stressed me out, I just reach into my backpack for one that cost about $0.50 because past me purchased in bulk. High five!

Wealth management skills getting better. Emotional triggers handled. Sweet Tooth secured. Feeling more positive about life.

What are your financial emotional pitfalls and what habits can you develop to avoid them?


Onicia is an entertainment blogger and humor columnist. When she’s not working on screenplays and stage scripts, she does stand-up comedy in Chicago.

Interested in writing a guest post at Breaking the Piggy Bank? I would love to have more voices and perspectives about money related items. Pitch ideas here.

I got a tax refund, now what?

taxes

You may be someone who is receiving a tax refund this year. If so, hey, awesome for you!

What are you going to be doing with that money?

Today’s post will focus on learning to prioritize and plan what to do with your tax refund. If you happen to be someone who is not receiving a tax refund, hey I hear you, been there, too. This can still be relevant to you in terms of learning to prioritize with any sort of money.

I’m only talking about taxes in order to be topical.

Plus, I think when you get a refund, it is easy to lose track of it and spend it without having a plan. If I happened to receive a refund while I was living paycheck to paycheck, I would lose control and before I knew it that money was gone. Why? Because I wouldn’t be used to having “extra” money in my bank account. So, like with any time you may find yourself with some “extra” money, whether a refund, overtime pay, or side gig pay, we can try and form habits that will help us hold onto that money a little longer and prioritize where it is spent.

Tip #1: Create Goals

When creating money goals for a refund, extra & side income, I like to ask myself a few questions.

Is there something I have been meaning to get around to that I have not yet?Outstanding bill? Class I’ve been meaning to take? Something that needs to be repaired sooner than later?

Is there something I would like to get to in the future that I can plan towards?
A trip somewhere? A class I haven’t thought about yet? A renovation project? Early retirement? (ha…)

These two questions help me actively think about how to best allocate any extra money I have coming into my bank account. By actively asking myself these questions, I can then create goals to categorize that money into it.

Since I am receiving a refund this year, the answers to these two questions turned into the following goals for myself:

  • Pay therapy deductible from earlier last year. (immediate goal)
  • Pay extended car warranty deductible to fix minor inconvenient issue. (immediate goal)
  • Set aside for Peru trip in April. (short term goal)
  • Set aside for general savings fund. (long term goal)

I like to create goals that are a variety of immediate, short and long term. This makes it easier to be able to form a habit of not saying BYE to that extra money right away.

Tip #2: Visually Organize

“I’m keeping track of it in my head,” is something I used to say all the time. Guess what! It didn’t work for me because I learned that having a visual representation of these goals holds me more accountable than just keeping it all in my head.

How can you visualize it?

You can simply write it down somewhere you will actively look at it. It can be as simple as a list. However, I found that drawing it out in a little web of sorts and color coding helps me out more than just a written post it. See example below:

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(This was one visual representation while I sorted out my priorities. My brain works best when I am drawing out, literally. Sometimes it takes a few drafts before I settle on a final version.)

Check to see if your bank’s app or website has a feature that will help you categorize your money. For example, I use Simple. The Simple app and website have a “Goals” feature where you can move money in your bank account to different categories. This becomes a useful visual guide of where you PLAN on using your money.

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(Photo from Simple’s website)

Tip #3: Divide & Conquer by Calculating

Decide based on your goals how much of the extra money you find yourself with will go to each of those goals. I like to use a spreadsheet, but again you can write this down. Assigning a fixed amount to each goal makes it easier to reach than simply telling yourself “Some of it will go to Goal 1, some of it will go to Goal 2, and whatever is left over will go to etc etc”. Throw ACTUAL numbers in there. Doing so can help you feel more in control. Below is how I used my spreadsheet to divide & conquer my goals with my tax refund.

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(The above spreadsheet example allows you to throw in numbers and calculate toward the different goal categories.)

Actively planning using these strategies helps me hold myself more accountable toward actually using that extra money toward what I say I want to use it on. Does the idea of buying a Nintendo Switch spontaneously tempt me to splurge instead? YES, BECAUSE DEAR GOD AM I THE ONLY ONE WITHOUT A NINTENDO SWITCH YET? However, I am in charge of prioritizing my goals. Unfortunately, the Nintendo Switch just isn’t one of my more immediate goals.

As with anything I post on this website, you are free to disagree with what I offer. I’ve only developed these strategies having dealt with a lot of financial mishaps, and so far I have been on a better financial path. You may learn that you work differently and that what works for me doesn’t work for you, and that’s fine! I want to encourage you to find what works for you! (and maybe share that with people!)


Don’t forget you can ASK THE PIG a question to be answered during next month’s ASK THE PIG post.

 


Other money musings to check out this week:

“Where to Write When You’re Cheap and Broke?” by Onicia Muller

“You cannot Buy Permanent Happiness With Material Possessions” over at Thinking a Hole in the Earth