Learn from My Financial Mistakes: Why Having a Plan Can Help You Recover

Financial Planners

A certified financial planner on the money mistakes she made early in her career and how she got on a better path.

It seemed like a good idea at the time. I was a brand-new financial planner and I thought I had to look a certain way. The only problem was that I hated shopping, especially for suits. I learned about custom-made suits from my male colleagues, which is how they avoided the hassle of shopping. The best part: They’d come to your office to take the measurements, show you designs, and even present fabric swatches. I was in. It never occurred to me to ask how much this convenience would cost. Two jackets, two pairs of slacks, one skirt, and a handful of shirts later, and I was out $3,500. To add insult to injury, I hated almost every single item I got. I still have a few of these pieces sitting in my closet, collecting dust. Each time a skirt or shirt stares back at me, I’m reminded of my financial mistake.

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It’s also a reminder that we all make mistakes, and that financial mistakes don’t have to define you. You can learn from them and make different choices. With time and experience, I’m now able to understand why I felt compelled to spend $3,500 on suits I don’t wear and know I won’t do that again.

Each time I make a mistake, I ask myself: “What can I learn from this? What can other people learn from this? What can I do to avoid making the same mistake again?” Here are some other lessons my money mistakes have taught me.

Mistakes are learning opportunities

Now that I’m older and have been around the financial planning industry, I realize I’m not the suit-wearing type. I can look professional and put together without an uncomfortable suit. I also know that I hate shopping and now I rely on subscription boxes to deliver professional outfits to my door at reasonable prices.

Of course, the suit fiasco isn’t my only money mistake. Shortly after my divorce, I bought a house in the Iowa suburbs of Omaha. Soon after, I met my now-husband — a man who lived, and always planned to live, on the Nebraska side. The joint custody agreement he had with his ex-wife mandated that he live in Nebraska. When we got married less than three years later, it was clear that I would have to sell my house. I didn’t lose money on the house, but I didn’t benefit from any of the appreciation of my property after factoring in moving expenses and closing costs. 

The lesson? It’s not a good idea to make big financial decisions when your whole life is in flux and emotions are running high.

Give yourself a soft landing after a mistake

I still think about the fabulous trip I could have taken if I hadn’t bought those custom suits. But what stops me from feeling truly terrible about that fashion choice is that I was also building up on my emergency savings at the time. So when the bill for the suits came due, I didn’t worry that I wouldn’t be able to cover my rent. 

What prevented this financial mistake from becoming an all-out disaster was my emergency fund. And still today, my savings allow me grace to make mistakes. I recommend everyone give themselves this gift.

What’s an emergency fund to you? Is it a pool of money that you’ll only touch when the roof caves in or you total your car? Or is a fund that allows you to pick yourself back up when you stumble so your whole financial plan doesn’t get derailed and you can move forward? An emergency fund can also be an opportunity fund, so you can avoid regrets. 

At its most basic, an emergency fund should cover three to six months of living expenses. After that, it can help you take advantage of opportunities that are too big for your day-to-day budget. For instance, when I see a great deal on airfare to one of my bucket list locations, I’ll jump on it and use my savings (and then build it back up). You could use yours to invest in a business opportunity or to snap up a good real estate deal.

Life happens and plans change

Sometimes, what was supposed to be a sound financial move ends up becoming a mistake because circumstances have changed. I’ve been in that situation too.

During the first year of the COVID-19 pandemic as mortgage rates plummeted, my husband and I rushed to refinance at those attractive rates. But within a few months we moved. Our family situation changed and we needed to be in a different home.

For starters, the drive to my office had become horrendous. What had started as a 25-minute commute when we first moved there, slowly crept up to more than an hour each way. More importantly, coming out of Covid our children had different needs than they did before. We moved them to new schools and wanted to be closer.

Do I wish I wasn’t out $3600 in closing costs? Of course. However, I don’t regret moving to prioritize my children’s education and my sanity. If I had known that things would change so much, I wouldn’t have done the refi and saved those closing costs. But that’s not how it panned out.

The pros aren’t immune from money mistakes

As a financial planner, people expect that I’ve executed my own financial plan flawlessly. Nope. I’m candid about my own mistakes. In fact, most of the financial planners I know have their own collection of financial mistakes lurking in their closets.

It can be helpful to hear these stories to put your own missteps into perspective. If you’re interviewing financial planners, try asking them about their mistakes. You’ll see that you’re not alone. In fact, I would consider it a major red flag if an advisor isn’t forthcoming about the ways they’ve stumbled. That’s probably not a person who will help you love yourself through mistakes and help you move forward.

Allow yourself grace

We’re all human and mistakes — money or otherwise — are bound to happen. Understanding that you will stumble from time to time will help you build a durable financial plan that allows grace for when you do.


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