Money Mistakes: Did You Not Hear, or Did You Not Listen?

What do you do once you gain knowledge? Oftentimes, especially when it comes to money management, people cite a lack of knowledge as the reason for not saving, for bank overdrafts, not paying credit card bills on time, not contributing to their 401k plan, etc. While it may be true that you didn’t save because you weren’t taught that you should, that you got an overdraft because you thought the bank wouldn’t let you keep spending if you had insufficient funds, and that you didn’t pay your bills on time because you didn’t know there would be any consequences other than the company not receiving their money when it was due.

The bigger question is what did you do when you were made aware of what you once did not know? Did you start saving, stop over drafting, start paying bills on time, start contributing to your 401k, etc.? Or did you continue to ignore the lessons that you learned and defend them with new excuses? I’ll raise my hand and say that I made excuses for many years before I acted on lessons learned.

I was in high school the first time that my bank account had an over draft. I got mad at the bank. I wondered why they let me spend more than what was in my account instead of declining the transaction. However, when I first opened the bank account, my sister cautioned me to track what I spend because not every purchase shows up on the bank's website right away and may take days to show up. She told me that not seeing all of my purchases may lead me to believe that I had more money than I did, eventually resulting in an overdraft.

She suggested that I use the paper transaction register that the bank gave me when I opened the account. Did I listen? Nope. The thought of carrying around a paper transaction register and recording my purchases in front of my friends was mortifying (although the thought of insufficient funds should have been more mortifying), so I didn't do it. Thus, my account was over drafted. Yet, my initial reaction was to be angry with the bank instead of at myself for not acting on the wisdom that I received and keeping track of my spending. From that point on, I began to use the transaction register. My friends laughed at me at first, as I expected, but eventually they began to come to me for financial advice.