November 2, 2023 • 21 mins
Ever had that feeling when you realize you've made a financial blunder? Well, you're not alone. I once impulsively signed up for a store credit card for a tempting discount, only to be sideswiped by the interest on my bill. Hear the story and the lessons I learned about setting clear financial priorities and understanding the implications of credit cards. And how I later applied this lesson in a similar scenario but this time with a much wiser strategy.
We all have our share of money-related missteps, but the trick is to turn them into lessons and prevent future mistakes. Follow me on a journey as I expose my financial mishaps, from signing up for store credit cards without understanding the impact, to buying my first car at an auction without seeking advice. Through trials, errors, and bit of hilarity, I've learned the importance of avoiding bad money choices, budgeting, and setting goals for financial health.
Join me and let's grow wiser together from our financial mishaps!
Links mentioned:
Episode 27 - How I set up my banking for success
Budgeting Guide
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🌐 Website: thefinancialmoment.com
📸 Instagram: @thefinancialmoment
💼 Money Coaching: Need deeper support? Visit my website to learn how we can help you take control of your finances.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Hello everyone.
My name is Carolyn.
Welcome to the Saving for yourFirst Home podcast.
I am the CEO of the FinancialMoment.
We offer money coaching forthose who are ready and willing
to make financial changes intheir lives.
For the most of us, there comesa point in time where we think
to ourselves it would be reallynice to own property, but it
(00:22):
sometimes can feel like a pipedream and not very easily
obtainable.
So I created this podcast togive you all the information and
tools you need to take thesteps forward toward home
ownership.
Take it from me my husband andI started our lives together,
working part-time jobs with ayoung child.
Fast forward, through manyhiccups and failures, we stepped
(00:43):
our feet into our very firsthome.
For us it was a pile of dirt,but eventually our family home
was built on that dirt.
Now we are in the midst ofgrowing our investment property
portfolio.
I created the savings for yourfirst home podcast to give you
easy, actionable tools for youto do the same.
If you have that same gutfeeling that I did and want to
(01:06):
create a life for yourself andyour growing family, but don't
know where to start, you are inthe right place.
Let's do this.
Hello and welcome back.
I feel like this episode isgoing to be kind of like a
blooper reel.
Either you're going to belaughing at how I got myself
into these crazy situations oryou're going to be able to
(01:27):
relate and share some of yourcrazy stories with me as well.
So today I thought we'd talkabout our bad money choices.
Now why, you ask?
Why do we want to go downmemory lane and think about all
the mistakes and problems thatwe had when it comes to making
money decisions?
Well, there's a couple ofthings that we can learn from
(01:52):
our past.
Faux pas First is identifying apattern.
If you have something thatoccurs time and time again and
it's leading to poor decisionmaking, recognizing those
patterns perhaps is a good,positive first step to making
change.
(02:12):
Also, I mean, who doesn't learnfrom experience?
Right, you fall, you cut yourknee.
You're going to watch whereyou're walking the next time,
right?
So every financial mistake, itreally offers a valuable
learning opportunity.
Whether that could beoverspending, accumulating debt,
you know, failing to save.
(02:32):
All of these experiences reallybecome a source of wisdom and
if you acknowledge your errors,you can better understand what
went wrong and why.
And another reason why we kindof dive into this is because we
really want to set clearpriorities.
Okay, so let me share one of myexperiences with you.
(02:56):
I'm not sure if I've mentionedthis on the podcast before, but
I am a bit of a spender, so Ilove to shop, I love getting a
deal and it just lights me upfor some reason.
So many, many moons ago, I wasin New York one year and Macy's
had this great sale and ofcourse you know, picking up
(03:19):
different things, and if yousign up for their Macy's card,
their Macy's credit card, you'llget an additional.
I don't remember what it was,maybe 20% off, and it was
already on sale, and so it wouldhave been even more of a deal
if I got this card.
So I'm thinking, sure, why not,right, get the 20% off and save
(03:41):
myself some money?
So I'd go through the wholehassle of signing up for this
credit card.
I get my 20% off and I'm like,yes, you know, I didn't even
have to spend my US dollars thatI had at the time on the
purchase, so it was an evenbetter score.
So now here's where things wentsouth.
So you know, obviously Ireturned back to Canada and I
(04:03):
had given them all myinformation, address,
information, whatever, but itprobably took a while to set up
the card and actually send outthe bill to me to be paid.
So when I finally got the bill,I had long forgotten about this
purchase and I kind of just putit aside, because it required
me to have it set up onlinebanking, and it was just a
(04:24):
hassle, right to pay.
So I'm like, oh yeah, I'll getto it.
It was a small amount, itwasn't a lot of money, and so I
figured I'll, I'll just get toit.
Well, you know, they don't sendthe bills, take a long time to
come, and so I kind of justforgot about it, right.
And so months went by, didn'tpay much attention to it, and
(04:44):
then finally a bill came and ifyou saw the amount of interest
that they put onto this purchase, it was like more than double
what I paid originally for theitem.
And I was just like what isgoing on right now?
And so I had to end.
This was in US dollars and sothe conversion on top of that
(05:07):
and here is where I learned mylesson, because my priorities
were not on point, you know, Ididn't prioritize paying off the
debt, I just allowed it to kindof accumulate.
I didn't think anything of itand I didn't really realize the
impact it would have on me inthe future, and so this was a
definite learning lesson for me,because I had to pull out more
(05:29):
money out of my pocket and I'msure it had an impact on my
credit rating.
Probably back then I wasn'tpaying attention.
Now this is where prioritiescome into play.
If I had made a wiser decisionat the time of purchase like how
much was the 20% off, you know,was it really worth it going
down this road?
Now perhaps it was.
(05:49):
But again, priorities of payingoff debt in its entirety when
it comes in, those are thingsthat you need to set to avoid
unnecessary interest.
Also, making it a priority tostick to a budget.
Now, because I put thatpurchase on credit, it freed up
cash that I had to spend evenmore, which probably put me over
(06:12):
my budget.
Now the real question is did Ilearn from this experience?
So I did do this one more time.
I signed up for an Ann Taylorcard because, again, it gave me
a massive discount off of what Iwas purchasing.
However, what I did learn wasthat I needed to pay that off in
its entirety.
(06:32):
So what I did was I took the USdollars that I had for the
purchase and I paid it at thecashier.
I paid the bill right then andthere, so there would be no bill
to me in Canada, and I ended upgetting the discount and it was
all.
It was a win-win.
So my point in all of this isto say that really learn from
(06:54):
your previous mistakes, avoidmaking the same ones over and
over again, and really stick towhat your priorities are Paying
off debt, sticking to a budget,right.
These are things that will helpyou to make better financial
decisions in the future.
Okay, so here's another one foryou.
Have you ever made a moneychoice without seeking advice?
(07:18):
Well, I have, and this goesback to when I purchased my
first vehicle.
I was so excited, right, I hadsaved some money and I was going
to buy a car and it would be myfirst vehicle that was
considered mine.
So I had heard that a lot ofpeople were buying cars via an
(07:41):
auction.
You know they would be perhapsa leased car that was returned,
or a car dealership that wouldno longer do the vehicle and you
would get, you know, a betterdeal on it.
So I was like perfect, let's dothis.
So my boyfriend, which is nowmy husband at the time we go to
(08:01):
this car action and one of therules of the auction is you know
, you can take a look at the car, you can go inside, but you
can't drive it, you can't testdrive it, you can't do anything
with the vehicle, you just kindof have to take a look and hope
for the best.
Now I picked a Dodge Shadow.
So I don't know if you know,I'm probably dating myself now.
(08:23):
But do they even make that caranymore?
Probably not.
Anyway, that was my first car,first choice.
It was shiny, it looked reallynice on the outside.
We went inside the car.
It was clean.
So I figured, you know, it'sprobably like a rental return.
You know it's a really gooddeal, just the car, we drive the
(08:43):
car off the lot and no ends ofproblems.
So I don't even rememberexactly what the mechanical
issues were, but the cost torepair it would have been more
than the value of the vehicle.
I was devastated.
I never even got to drive thatcar for more than three months
(09:07):
because it was just such a lemonand all the hard earned money
that I had just went down thedrain and later, of course, you
know, the mechanics that I tookit to said well, why didn't you
bring a mechanic with you totake a look?
And you know, just start theengine, listen for its different
sounds, whatever I'm like, Idon't know.
(09:27):
I just thought you know thesecars would work.
Like you know, I had noknowledge of what I was doing,
to be honest with you, and sothat really resulted in one of
probably the worst money choicesthat I had ever made.
I went on to have to save againfor another vehicle and I was
(09:50):
able to buy another car, but itwas painful, right, because I
was taking the bus and it wasjust not pretty time for me.
So, having said all of that, itis so important to seek out
guidance and advice right, andthis can come from your mentors,
it can come from financialexperts you know really people
(10:12):
that you are knowledgeable inwhat it is that you're trying to
do.
Now, this doesn't have to be apurchase, right.
It can be about financialdecision making, like you know
retirement goals, or saving foryour kids' education, or buying
a home, or any of the bigfinancial decisions.
You really need to seek outguidance and advice.
You don't just want to jump in.
(10:33):
You know, things can be soemotional when it comes to money
.
You see something, it's shiny,it's nice, and you jump in and
then, all of a sudden, you'velost thousands of dollars.
And so did I learn from thatexperience?
Well, yes, because the nexttime I purchased a car, you know
, I learned that you can getcertification, that certain
(10:56):
safety criteria need to be met.
You know, there's so manythings that I learned from that
experience.
And so, again, reflecting onthese things and making better
choices the next time reallyputs you in a better position.
Okay, so bad money choices alsooften result from poor financial
habits.
(11:16):
Okay, so I'm going to draw onagain some of my poor money
choices to give you an exampleof what I mean by this.
So in the past, I would kind ofrub Peter to pay Paul have you
ever done that?
So I would pay the minimumpayments on some of my cars so
(11:38):
that it would free up cash to beable to do some other things
that I wanted to do.
Now let's just think about thatfor a second.
I'm paying minimum payments onthe debt that I already owe and
then I take the money that Ihave left over that I really
should be pitting on that debtand then go and spend it on
(11:58):
whatever else.
Now again, I think at the timeyou probably had a little bit
more limited income and my sonwas probably in competitive
sports and you know all thatstuff cost a lot of money, and
so in order to pay a fee like,for example, their entrance into
a competition, I had to pay ina certain amount, and it wasn't
(12:22):
budgeted for, of course, and soI had to just pay lesser on some
of my bills in order to free upthe money to put towards their
competitive fees.
And this is a really unhealthyhabit that I probably developed
over time of just paying theminimum and using that money for
something else, because what itdid was really cycle me into a
(12:46):
series of debt.
And then, all of a sudden, youhave a large amount of debt,
whether on credit or whatever,and you don't even know how you
got there, because you didn'tfeel like you spent a lot of
money.
But yet the debt is piling up,and this is where understanding
how interest really works isimportant, because compounding
(13:06):
interest on the debt that youalready owe is going to get
higher and higher and increaseyour debt load.
So having an increasedfinancial awareness is really
crucial.
This is why financial literacy,to me, is one of the most
important pieces of knowledgethat you should have as an adult
, and it really does come fromyour childhood.
(13:29):
But as you go into adulthood,understanding how interest works
, understanding why you shouldbe creating some healthy habits,
really is going to set you upin a better financial position
and it really is going to helpyou to make better, more
conscious choices for yourfuture, and you're going to
(13:52):
avoid a lot of pain and stress.
Let me tell you Okay.
So those are some of my badmoney choices, and I have many,
many more, but I'd like to hearfrom you Am I the only one?
Have you guys made any kind ofbad money choices that you know
have changed the way you thinkabout money?
(14:14):
Or perhaps you're still makingthem?
I don't know, but I'd reallylike to hear back from you.
If you could send me a DM onInstagram, that'd be great.
You know, just make me feel alittle bit better that I'm not
the only one, but we can't justtalk about the mistakes that
we've made.
Yes, I want you to learn fromthem.
I want you to develop goodhabits.
(14:36):
I want you to have a littlemore financial acumen, but what
I'm going to do is actually giveyou some tips on how you can
kind of avoid some of thesesituations.
So I always talk about a budget.
Right Now again, I've said itmany times that a budget doesn't
have to be something that isvery restrictive.
(14:56):
It can be something that isvery simple.
So, for example, if you'retraveling and you want to do a
little shopping or excursions orwhatever, create a budget for
it, understand how much it isthat you want to spend before
you leave and really keep trackwhile you're away of what you're
spending, because you don'twant to come back to a huge
(15:18):
credit card bill when you gethome.
You know it kind of takes awayfrom the trip that you just had,
right.
So what I do sometimes on myphone, in the notes section of
the phone, is just create alittle chart, right.
So you have three columns date,the item and how much you
purchased.
So if you feel like you need torecord your food costs or you
(15:40):
need to record what you'repurchasing whatever it is you
know just quickly enter it intoyour phone when you're making
the purchase and when you comeback to the hotel, you can kind
of see how it's adding up dayover day, right.
And then you can kind of scaleback.
Or you can spend maybe a littlebit more, who knows, right.
But setting a detailed budgetfor your trips or your kids'
(16:03):
school activities or you knowthings that just are a little
bit outside of your normaleveryday budget.
It's important to do that,because that's what's kind of
throw you off and force youalmost to make a bad financial
choice.
And then I want you to havesome clear goals, right?
So goals about saving for yourhome, paying off debt, building
(16:27):
your emergency fund All thesethings are very important for
your financial health and ifyour goals are forefront in your
mind, you're going to makebetter choices because you know
the bigger picture is around thecorner, right?
So take the example of mepaying the minimum payments.
Well, had I thought about itand actually put the money down
(16:49):
on the card, I would have savedmyself the interest and I
probably would have had moremoney to put towards my
children's activities.
So you know it's all a bigcircle and if we focus on our
major goals that are importantto us, we will make better
decisions along the way.
Another tip is to reallyseparate your money.
I did an episode.
(17:10):
It's number 27.
If you want to take a listen tothat episode, it talks about
how I actually set up my bankingand if we separate our money
for different purposes.
So, for example, our essentials, the bills that need to be paid
, perhaps our discretionaryspending groceries, gas all in
(17:31):
separate individual accounts andwe set an amount for each of
them.
When we've reached that targetand we've spent the money, then
we kind of know that that's itright.
So it's almost like a forcedway to stay on track.
Now, in doing so, you do need tocreate a system of tracking.
Now, I think everybody hates totrack, including myself, right?
(17:55):
I think that it's painful torecord every single thing that
happens or any of the time youspend money.
So there's different ways ofdoing it.
If you need help with creatinga budget or you want some tips,
I have a great guide that youcan download.
You can just go tothefinancialmomentcom
(18:16):
backslashbudget-tips.
It's going to give you severalways in order to stick to your
budget.
But tracking is actuallysomething that really helps us
to stay aware.
Especially in these days wherethings are so much more
expensive, it's important tohave an idea of where your money
(18:38):
is going.
Do you need to increase yourbudget?
Say, for example, gas.
Gas prices are super high rightnow and if you have it that
your budget at the same targetedlevel you did last year, then
you're definitely going to havea shortfall, which can result in
additional debt.
All right, so why don't we recapon why we're reflecting on our
(19:00):
bad money choices?
First off, it's going to helpus to identify some patterns.
If you've made financialmistakes in the past and you're
continuing to do the same thingsin the future, you need to
identify those patterns and thenmake some positive changes.
And, of course, we need tolearn from our experience.
Right, every financial mistakeoffers that valuable learning
(19:24):
opportunity.
Then we talked about settingclear priorities.
We want to ensure that ourpriorities about saving, about
budgeting, paying off debt, aretop of mind, so that when we go
to make a financial decision, weunderstand what our priorities
are.
And this leads into our healthyhabits.
(19:44):
Right, making decisions basedon just a habit that we've
always done.
Right, robbing Peter to payPaul.
Also, we want to increase ourfinancial awareness.
Now I know I'm speaking to thechoir because you guys are
listening to this podcast, so bydoing so, you're improving your
financial literacy and I'mhoping that you're going to have
(20:06):
some takeaways that you canimplement in your own lives.
So just continue to befinancially aware and use that
to motivate you to change.
And then don't forget to askfor guidance, right?
You can save yourself so muchpain and heartache if we just
seek out financial expertise andadvice.
(20:29):
Set your clear goals.
Make sure they are top of mind,like investing for retirement,
paying down your debt, savingfor a home All those big, big
goals that we have in mind.
Make sure that they are top ofmind when you go out and make
those little, tiny moneydecisions.
(20:49):
So I hope that you've enjoyedlistening to some of my money
faux pas and what I've learned,and don't leave me high and dry.
Send me a DM and tell me someof the mistakes that you've made
, just so that maybe I can learnsomething as well.
And just remember to downloadthe budgeting tip guide.
You can find it atthefinancialmomentcom
(21:10):
backslashbudget-tips.
All right, I hope you guys havea wonderful week and we will
see you next Thursday.
Thank you for listening.
We are committed to helping youplace your very first steps
into your new home.
See you next time.
Hello everyone.
My name is Carolyn.
Welcome to the Saving for yourFirst Home podcast.
I am the CEO of the FinancialMoment.
We offer money coaching forthose who are ready and willing
to make financial changes intheir lives.
For the most of us, there comesa point in time where we think
to ourselves it would be reallynice to own property, but it
(00:22):
sometimes can feel like a pipedream and not very easily
obtainable.
So I created this podcast togive you all the information and
tools you need to take thesteps forward toward home
ownership.
Take it from me my husband andI started our lives together,
working part-time jobs with ayoung child.
Fast forward, through manyhiccups and failures, we stepped
(00:43):
our feet into our very firsthome.
For us it was a pile of dirt,but eventually our family home
was built on that dirt.
Now we are in the midst ofgrowing our investment property
portfolio.
I created the savings for yourfirst home podcast to give you
easy, actionable tools for youto do the same.
If you have that same gutfeeling that I did and want to
(01:06):
create a life for yourself andyour growing family, but don't
know where to start, you are inthe right place.
Let's do this.
Hello and welcome back.
I feel like this episode isgoing to be kind of like a
blooper reel.
Either you're going to belaughing at how I got myself
into these crazy situations oryou're going to be able to
(01:27):
relate and share some of yourcrazy stories with me as well.
So today I thought we'd talkabout our bad money choices.
Now why, you ask?
Why do we want to go downmemory lane and think about all
the mistakes and problems thatwe had when it comes to making
money decisions?
Well, there's a couple ofthings that we can learn from
(01:52):
our past.
Faux pas First is identifying apattern.
If you have something thatoccurs time and time again and
it's leading to poor decisionmaking, recognizing those
patterns perhaps is a good,positive first step to making
change.
(02:12):
Also, I mean, who doesn't learnfrom experience?
Right, you fall, you cut yourknee.
You're going to watch whereyou're walking the next time,
right?
So every financial mistake, itreally offers a valuable
learning opportunity.
Whether that could beoverspending, accumulating debt,
you know, failing to save.
(02:32):
All of these experiences reallybecome a source of wisdom and
if you acknowledge your errors,you can better understand what
went wrong and why.
And another reason why we kindof dive into this is because we
really want to set clearpriorities.
Okay, so let me share one of myexperiences with you.
(02:56):
I'm not sure if I've mentionedthis on the podcast before, but
I am a bit of a spender, so Ilove to shop, I love getting a
deal and it just lights me upfor some reason.
So many, many moons ago, I wasin New York one year and Macy's
had this great sale and ofcourse you know, picking up
(03:19):
different things, and if yousign up for their Macy's card,
their Macy's credit card, you'llget an additional.
I don't remember what it was,maybe 20% off, and it was
already on sale, and so it wouldhave been even more of a deal
if I got this card.
So I'm thinking, sure, why not,right, get the 20% off and save
(03:41):
myself some money?
So I'd go through the wholehassle of signing up for this
credit card.
I get my 20% off and I'm like,yes, you know, I didn't even
have to spend my US dollars thatI had at the time on the
purchase, so it was an evenbetter score.
So now here's where things wentsouth.
So you know, obviously Ireturned back to Canada and I
(04:03):
had given them all myinformation, address,
information, whatever, but itprobably took a while to set up
the card and actually send outthe bill to me to be paid.
So when I finally got the bill,I had long forgotten about this
purchase and I kind of just putit aside, because it required
me to have it set up onlinebanking, and it was just a
(04:24):
hassle, right to pay.
So I'm like, oh yeah, I'll getto it.
It was a small amount, itwasn't a lot of money, and so I
figured I'll, I'll just get toit.
Well, you know, they don't sendthe bills, take a long time to
come, and so I kind of justforgot about it, right.
And so months went by, didn'tpay much attention to it, and
(04:44):
then finally a bill came and ifyou saw the amount of interest
that they put onto this purchase, it was like more than double
what I paid originally for theitem.
And I was just like what isgoing on right now?
And so I had to end.
This was in US dollars and sothe conversion on top of that
(05:07):
and here is where I learned mylesson, because my priorities
were not on point, you know, Ididn't prioritize paying off the
debt, I just allowed it to kindof accumulate.
I didn't think anything of itand I didn't really realize the
impact it would have on me inthe future, and so this was a
definite learning lesson for me,because I had to pull out more
(05:29):
money out of my pocket and I'msure it had an impact on my
credit rating.
Probably back then I wasn'tpaying attention.
Now this is where prioritiescome into play.
If I had made a wiser decisionat the time of purchase like how
much was the 20% off, you know,was it really worth it going
down this road?
Now perhaps it was.
(05:49):
But again, priorities of payingoff debt in its entirety when
it comes in, those are thingsthat you need to set to avoid
unnecessary interest.
Also, making it a priority tostick to a budget.
Now, because I put thatpurchase on credit, it freed up
cash that I had to spend evenmore, which probably put me over
(06:12):
my budget.
Now the real question is did Ilearn from this experience?
So I did do this one more time.
I signed up for an Ann Taylorcard because, again, it gave me
a massive discount off of what Iwas purchasing.
However, what I did learn wasthat I needed to pay that off in
its entirety.
(06:32):
So what I did was I took the USdollars that I had for the
purchase and I paid it at thecashier.
I paid the bill right then andthere, so there would be no bill
to me in Canada, and I ended upgetting the discount and it was
all.
It was a win-win.
So my point in all of this isto say that really learn from
(06:54):
your previous mistakes, avoidmaking the same ones over and
over again, and really stick towhat your priorities are Paying
off debt, sticking to a budget,right.
These are things that will helpyou to make better financial
decisions in the future.
Okay, so here's another one foryou.
Have you ever made a moneychoice without seeking advice?
(07:18):
Well, I have, and this goesback to when I purchased my
first vehicle.
I was so excited, right, I hadsaved some money and I was going
to buy a car and it would be myfirst vehicle that was
considered mine.
So I had heard that a lot ofpeople were buying cars via an
(07:41):
auction.
You know they would be perhapsa leased car that was returned,
or a car dealership that wouldno longer do the vehicle and you
would get, you know, a betterdeal on it.
So I was like perfect, let's dothis.
So my boyfriend, which is nowmy husband at the time we go to
(08:01):
this car action and one of therules of the auction is you know
, you can take a look at the car, you can go inside, but you
can't drive it, you can't testdrive it, you can't do anything
with the vehicle, you just kindof have to take a look and hope
for the best.
Now I picked a Dodge Shadow.
So I don't know if you know,I'm probably dating myself now.
(08:23):
But do they even make that caranymore?
Probably not.
Anyway, that was my first car,first choice.
It was shiny, it looked reallynice on the outside.
We went inside the car.
It was clean.
So I figured, you know, it'sprobably like a rental return.
You know it's a really gooddeal, just the car, we drive the
(08:43):
car off the lot and no ends ofproblems.
So I don't even rememberexactly what the mechanical
issues were, but the cost torepair it would have been more
than the value of the vehicle.
I was devastated.
I never even got to drive thatcar for more than three months
(09:07):
because it was just such a lemonand all the hard earned money
that I had just went down thedrain and later, of course, you
know, the mechanics that I tookit to said well, why didn't you
bring a mechanic with you totake a look?
And you know, just start theengine, listen for its different
sounds, whatever I'm like, Idon't know.
(09:27):
I just thought you know thesecars would work.
Like you know, I had noknowledge of what I was doing,
to be honest with you, and sothat really resulted in one of
probably the worst money choicesthat I had ever made.
I went on to have to save againfor another vehicle and I was
(09:50):
able to buy another car, but itwas painful, right, because I
was taking the bus and it wasjust not pretty time for me.
So, having said all of that, itis so important to seek out
guidance and advice right, andthis can come from your mentors,
it can come from financialexperts you know really people
(10:12):
that you are knowledgeable inwhat it is that you're trying to
do.
Now, this doesn't have to be apurchase, right.
It can be about financialdecision making, like you know
retirement goals, or saving foryour kids' education, or buying
a home, or any of the bigfinancial decisions.
You really need to seek outguidance and advice.
You don't just want to jump in.
(10:33):
You know, things can be soemotional when it comes to money
.
You see something, it's shiny,it's nice, and you jump in and
then, all of a sudden, you'velost thousands of dollars.
And so did I learn from thatexperience?
Well, yes, because the nexttime I purchased a car, you know
, I learned that you can getcertification, that certain
(10:56):
safety criteria need to be met.
You know, there's so manythings that I learned from that
experience.
And so, again, reflecting onthese things and making better
choices the next time reallyputs you in a better position.
Okay, so bad money choices alsooften result from poor financial
habits.
(11:16):
Okay, so I'm going to draw onagain some of my poor money
choices to give you an exampleof what I mean by this.
So in the past, I would kind ofrub Peter to pay Paul have you
ever done that?
So I would pay the minimumpayments on some of my cars so
(11:38):
that it would free up cash to beable to do some other things
that I wanted to do.
Now let's just think about thatfor a second.
I'm paying minimum payments onthe debt that I already owe and
then I take the money that Ihave left over that I really
should be pitting on that debtand then go and spend it on
(11:58):
whatever else.
Now again, I think at the timeyou probably had a little bit
more limited income and my sonwas probably in competitive
sports and you know all thatstuff cost a lot of money, and
so in order to pay a fee like,for example, their entrance into
a competition, I had to pay ina certain amount, and it wasn't
(12:22):
budgeted for, of course, and soI had to just pay lesser on some
of my bills in order to free upthe money to put towards their
competitive fees.
And this is a really unhealthyhabit that I probably developed
over time of just paying theminimum and using that money for
something else, because what itdid was really cycle me into a
(12:46):
series of debt.
And then, all of a sudden, youhave a large amount of debt,
whether on credit or whatever,and you don't even know how you
got there, because you didn'tfeel like you spent a lot of
money.
But yet the debt is piling up,and this is where understanding
how interest really works isimportant, because compounding
(13:06):
interest on the debt that youalready owe is going to get
higher and higher and increaseyour debt load.
So having an increasedfinancial awareness is really
crucial.
This is why financial literacy,to me, is one of the most
important pieces of knowledgethat you should have as an adult
, and it really does come fromyour childhood.
(13:29):
But as you go into adulthood,understanding how interest works
, understanding why you shouldbe creating some healthy habits,
really is going to set you upin a better financial position
and it really is going to helpyou to make better, more
conscious choices for yourfuture, and you're going to
(13:52):
avoid a lot of pain and stress.
Let me tell you Okay.
So those are some of my badmoney choices, and I have many,
many more, but I'd like to hearfrom you Am I the only one?
Have you guys made any kind ofbad money choices that you know
have changed the way you thinkabout money?
(14:14):
Or perhaps you're still makingthem?
I don't know, but I'd reallylike to hear back from you.
If you could send me a DM onInstagram, that'd be great.
You know, just make me feel alittle bit better that I'm not
the only one, but we can't justtalk about the mistakes that
we've made.
Yes, I want you to learn fromthem.
I want you to develop goodhabits.
(14:36):
I want you to have a littlemore financial acumen, but what
I'm going to do is actually giveyou some tips on how you can
kind of avoid some of thesesituations.
So I always talk about a budget.
Right Now again, I've said itmany times that a budget doesn't
have to be something that isvery restrictive.
(14:56):
It can be something that isvery simple.
So, for example, if you'retraveling and you want to do a
little shopping or excursions orwhatever, create a budget for
it, understand how much it isthat you want to spend before
you leave and really keep trackwhile you're away of what you're
spending, because you don'twant to come back to a huge
(15:18):
credit card bill when you gethome.
You know it kind of takes awayfrom the trip that you just had,
right.
So what I do sometimes on myphone, in the notes section of
the phone, is just create alittle chart, right.
So you have three columns date,the item and how much you
purchased.
So if you feel like you need torecord your food costs or you
(15:40):
need to record what you'repurchasing whatever it is you
know just quickly enter it intoyour phone when you're making
the purchase and when you comeback to the hotel, you can kind
of see how it's adding up dayover day, right.
And then you can kind of scaleback.
Or you can spend maybe a littlebit more, who knows, right.
But setting a detailed budgetfor your trips or your kids'
(16:03):
school activities or you knowthings that just are a little
bit outside of your normaleveryday budget.
It's important to do that,because that's what's kind of
throw you off and force youalmost to make a bad financial
choice.
And then I want you to havesome clear goals, right?
So goals about saving for yourhome, paying off debt, building
(16:27):
your emergency fund All thesethings are very important for
your financial health and ifyour goals are forefront in your
mind, you're going to makebetter choices because you know
the bigger picture is around thecorner, right?
So take the example of mepaying the minimum payments.
Well, had I thought about itand actually put the money down
(16:49):
on the card, I would have savedmyself the interest and I
probably would have had moremoney to put towards my
children's activities.
So you know it's all a bigcircle and if we focus on our
major goals that are importantto us, we will make better
decisions along the way.
Another tip is to reallyseparate your money.
I did an episode.
(17:10):
It's number 27.
If you want to take a listen tothat episode, it talks about
how I actually set up my bankingand if we separate our money
for different purposes.
So, for example, our essentials, the bills that need to be paid
, perhaps our discretionaryspending groceries, gas all in
(17:31):
separate individual accounts andwe set an amount for each of
them.
When we've reached that targetand we've spent the money, then
we kind of know that that's itright.
So it's almost like a forcedway to stay on track.
Now, in doing so, you do need tocreate a system of tracking.
Now, I think everybody hates totrack, including myself, right?
(17:55):
I think that it's painful torecord every single thing that
happens or any of the time youspend money.
So there's different ways ofdoing it.
If you need help with creatinga budget or you want some tips,
I have a great guide that youcan download.
You can just go tothefinancialmomentcom
(18:16):
backslashbudget-tips.
It's going to give you severalways in order to stick to your
budget.
But tracking is actuallysomething that really helps us
to stay aware.
Especially in these days wherethings are so much more
expensive, it's important tohave an idea of where your money
(18:38):
is going.
Do you need to increase yourbudget?
Say, for example, gas.
Gas prices are super high rightnow and if you have it that
your budget at the same targetedlevel you did last year, then
you're definitely going to havea shortfall, which can result in
additional debt.
All right, so why don't we recapon why we're reflecting on our
(19:00):
bad money choices?
First off, it's going to helpus to identify some patterns.
If you've made financialmistakes in the past and you're
continuing to do the same thingsin the future, you need to
identify those patterns and thenmake some positive changes.
And, of course, we need tolearn from our experience.
Right, every financial mistakeoffers that valuable learning
(19:24):
opportunity.
Then we talked about settingclear priorities.
We want to ensure that ourpriorities about saving, about
budgeting, paying off debt, aretop of mind, so that when we go
to make a financial decision, weunderstand what our priorities
are.
And this leads into our healthyhabits.
(19:44):
Right, making decisions basedon just a habit that we've
always done.
Right, robbing Peter to payPaul.
Also, we want to increase ourfinancial awareness.
Now I know I'm speaking to thechoir because you guys are
listening to this podcast, so bydoing so, you're improving your
financial literacy and I'mhoping that you're going to have
(20:06):
some takeaways that you canimplement in your own lives.
So just continue to befinancially aware and use that
to motivate you to change.
And then don't forget to askfor guidance, right?
You can save yourself so muchpain and heartache if we just
seek out financial expertise andadvice.
(20:29):
Set your clear goals.
Make sure they are top of mind,like investing for retirement,
paying down your debt, savingfor a home All those big, big
goals that we have in mind.
Make sure that they are top ofmind when you go out and make
those little, tiny moneydecisions.
(20:49):
So I hope that you've enjoyedlistening to some of my money
faux pas and what I've learned,and don't leave me high and dry.
Send me a DM and tell me someof the mistakes that you've made
, just so that maybe I can learnsomething as well.
And just remember to downloadthe budgeting tip guide.
You can find it atthefinancialmomentcom
(21:10):
backslashbudget-tips.
All right, I hope you guys havea wonderful week and we will
see you next Thursday.
Thank you for listening.
We are committed to helping youplace your very first steps
into your new home.
See you next time.
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