This is a life lesson you'll undoubtedly encounter in your life as well. There are endless opportunities for you to screw up when it comes to personal finance, and the key is to really just waste as little money as possible.
A Sad Surprise
I was going through my charges for my credit card recently and noticed this mysterious charge:
That's right, they had charged me $17.63 because I had forgotten to bay my bill on time! 🤦♂️
I am normally very good about paying things on time so this was something I honestly can't remember seeing before. Sure, $17.63 is not all that much, but to me this is a very painful charge to endure because it's completely unnecessary. I just literally no value from this, it wasn't like I didn't have the money to pay the bill- I just went out of my way to give them extra. Not only that but it caused me to spend time and emotional energy thinking about this completely unavoidable event.
Spiral Up, Not Down
This "pay your debts off quickly" ideology applies not just to credit card bills, but all payments- phone and utility bills, rent, taxes, car payments... Don't try to be sneaky and think your debtors will just forget it ever happened. They will be back, and they will come back asking for even more than they were originally. Plus, you're making enemies rather than friends at that point, and that's no fun.
Get to the point where you're net-positive and pay your debts off as soon as possible.
Do not get into situations where you will owe more money than you even have.
Do the math when it comes to borrowing, and be extremely cautious of anything that says "variable interest rate".
Get to the point where you're net-positive and pay your debts off as soon as possible.
Do not get into situations where you will owe more money than you even have.
Do the math when it comes to borrowing, and be extremely cautious of anything that says "variable interest rate".
Learn From Your Mistakes
Unlucky things happen to everyone that's true. Shit happens sometimes, and it will happen to you too. The key is that when unfortunate things do happen you have to really reflect on it and take action. Think about what you could do different to safegaurd against these things happening again in the future.
Look For The Deeper Problems and Consider Multiple Solutions
For example, in my late credit card example there are many things I can do to avoid having late fees again in the future. I could have an email alert sent out when my bill is ready and/or getting near the payment deadline.
Maybe though, I'm the the kind of person who doesn't check my email much so I'd rather have an automatic text message sent out.
Or maybe the real problem that I'm too lazy / don't have the time and energy to login and pay it, or just that when I see the alerts I'm always distracted doing other things at the time and end up forgetting about it again! In that, I could setup auto-payments and make a note to monitor my account for suspicious charges every few months (this is what I actually decided to do 😉).
The key takeaway here is that you should be creative when thinking about how you can solve the problem and pondering what behaviors you are doing and factors from the environment around you that are leading to these situations occurring.
Rather than going with the first solution you think of, try to play devil's advocate and think of the cons as well as the pros. This may inspire an even better solution or something else you can combine with your original solution to mitigate against the cons.
Maybe though, I'm the the kind of person who doesn't check my email much so I'd rather have an automatic text message sent out.
Or maybe the real problem that I'm too lazy / don't have the time and energy to login and pay it, or just that when I see the alerts I'm always distracted doing other things at the time and end up forgetting about it again! In that, I could setup auto-payments and make a note to monitor my account for suspicious charges every few months (this is what I actually decided to do 😉).
The key takeaway here is that you should be creative when thinking about how you can solve the problem and pondering what behaviors you are doing and factors from the environment around you that are leading to these situations occurring.
Rather than going with the first solution you think of, try to play devil's advocate and think of the cons as well as the pros. This may inspire an even better solution or something else you can combine with your original solution to mitigate against the cons.
Meta - Learn From Mistakes Without Making Them!
When you hear stories about unfortunate things happening to others, help them think through things they can do to improve the situation and avoid it again. Doing so will not only help this person, but it it's also a good exercise for you to think about precautions you should be taking. This applies to more than just personal finance- friendships, diet, fitness, dental health...
And in that same vein I'll leave you with a quote from the Roman philosopher Seneca:
And in that same vein I'll leave you with a quote from the Roman philosopher Seneca:
“Luck Is What Happens When Preparation Meets Opportunity"
RSS Feed