Everyone makes mistakes, even CMO. And recently my family and I made a big money mistake. I remember that recently Steve at Think Save Retire urged his readers to share their failures, and not just their successes, and so I wanted to share this with my readers. Why? Because everyone makes mistakes! No one is perfect, even if they somehow seem to be from the outside. Sometimes I worry that people take a look at my goals, or the surprise success I’ve had with this site, and think that my life must be oh-so-perfect with us just cruising along on the financial independence train. Nope! This is real life, and stuff happens.
So sit back and enjoy laughing at the confluence of events that recently caused us to overdraw our checking account by hundreds of dollars. And yes, it’s OK to laugh at my mistakes! Even though it was a pain, hopefully this story will help someone realize that it’s OK to make mistakes, talk about them, and learn from them.
A Morning Chat
My husband came up to me early on Tuesday morning, around 5 AM, as I was sitting at the computer doing work for this site. He gave me a smile, and a nice kiss. Then he gave me a funny look.
“What?” I said, somewhat annoyed he was interrupting my early morning of trying to figure out what I was going to do on this site. Little did I know our conversation was going to spark this article.
“The checking account is negative by over two hundred dollars,” he said in a surprised tone of voice.
“WHAT!” I said loudly, waking up the two year old still snoozing away on the couch. “How did that happen? It’s never negative!” My immediate thought was that it had been hacked, because it’s never even close to zero. Someone must have hacked into the debit card and gone on a spending spree.
“I don’t know,” he said, “when I was shopping for the Boy Scout books yesterday I was having some trouble with the debit card. I logged on to the app and it showed the account was at zero dollars. So I went to the bank and deposited a few dollars left over from the laundromat, but then this morning I logged on and it was negative.”
Side note – Our washing machine broke recently and we had to get a new one, which hasn’t arrived yet. So we’re stuck washing our clothes in the laundromat until it gets here.
I immediately opened a new tab on the computer and logged into the checking account. It asked me for my security code, so I had it call the house and give me the code so I could log on. Sure enough, when I got in I saw a negative balance by a little over $200. When I clicked to look at the transactions, I could see the most recent one was the homeowners and car insurance, for a little over $200.
“How did this happen???” I said, scrolling through the transactions to try and figure it out. After all, we keep a thousand dollar buffer in the account specifically so it will never overdraw.
My Checking Account History and Strategy
When my husband and I first met, I was a teenager and he was in his early 20’s. Even back then I was a responsible money nerd, having read the Wealthy Barber around 16. He was….less responsible and had multiple issues overdrawing his checking account. But I literally never did. After we got together my good money habits rubbed off on him and he stopped overdrawing his account. Eventually we combined accounts and I managed it so that we always had a buffer in there.
My strategy for the account is to always keep a specific dollar amount as the “floor”. Currently our floor is a thousand dollars. This way if an emergency comes up, or an unexpected bill, we have extra in there to absorb the cost until I can do a transfer from savings. Using this strategy we’ve only gone negative in the account once in over 20 years.
The one time the account went negative before was after my husband almost died from septic shock. That was a time we were really struggling to make ends meet every month. Huge medical bills were coming in, there was no income except from me, and for the first time in our lives as parents we had to pay for daycare. My husband usually watched the boys (just two of them back then) and of course he was in no shape to do so when he got sick. So we had to pay a thousand dollars a month for child care. There was one month that I told my husband not to spend any money because I had to pay the daycare bill and we weren’t going to have any extra money until I was paid later in the week. Unfortunately he forgot and took the boys to a park, spending a bit of money, and that took the account negative. I was forced to do a savings transfer to cover it. Honestly, though, that situation was really a severe crisis situation and understandable given the circumstances.
But not this. It was just an ordinary week! What the heck could have happened. I continued to dig through the transactions.
Finding The Big Mistake
As I scrolled through, the first thing I noticed was that it had been getting dangerously low for the past five days or so. Right after I had paid the mortgage it had gone to only $600 total balance, well below my buffer. Usually my husband or I check the checking account balance every few days, but we’d been busy with work, kids, and my sons 14th birthday party preparations and we must have forgotten. Also honestly with the buffer sometimes we slack on checking it as often as we should.
I continued to scroll down and saw a check that took $550 out of the account right before I had paid the mortgage.
“What’s this check for $550?” I asked. I hadn’t known of any checks that large being outstanding.
“It was for the plumber,” my husband said. He had called a plumber to the house to fix the toilet and replace the sewer pipe in the basement. I knew he had called a plumber but not that it was $550. I’m in the wrong career.
“Ugh!” I said exasperatedly. “You need to tell me about checks that big! Look what happened, now we have a negative balance.”
“I’m sorry!” he said, “I wrote it on the calendar!” He then proceeded to show me, and sure enough, he had not only written the plumber appointment on the calendar but also the fact that it cost $550.
“But that’s a huge expense! You can’t just write it on the calendar, I don’t check that for spending. You need to tell me!”
“I’m sorry,” he said, “I thought you’d see it.”
Ugh! Although I was annoyed at his mistake, I wasn’t too mad. You know, it happens. We kept talking about it and I kept scrolling through the transactions, trying to see if there might be something else in there.
Of course, the moment when it went negative was when we paid the mortgage.
Why were there two mortgage payments-one in late September and one only two weeks later in early October?
Oh my god.
“Todd,” I said. “It wasn’t you. It was me. I accidentally paid the mortgage twice this month.”
“What???” he said, walking over. I showed him. Sure enough, I had paid the mortgage on September 25th and again on October 11th. Our mortgage payment is way more than the buffer we keep in the account. My strategy is to always pay the mortgage every other paycheck, and then since I get paid every two weeks, I have two months each year I get an “extra” paycheck and can skip paying it one paycheck. I then use that extra money to put into savings. The non-mortgage paycheck goes toward all the other bills like the car and home insurance, electric bill, automatic college savings, and other such things.
How did that happen? Remember that I pay the mortgage every other paycheck. Well, I’ve been crazy busy over here with work and life, and when I got paid on October 5th, for some reason I thought it was the mortgages turn. But no, no it wasn’t. That was supposed to be for this paycheck coming on Thursday.
We both started laughing at the crazy confluence of events that brought us here. I checked into transferring from savings into checking, but the transfer would hit on the same day as my paycheck. So we decided to simply wait for me to get paid in two days, not spend anything until then, and have my husband go down to the bank and talk with our main contact there about what happened. We would beg for mercy and a fee reversal.
From this funny event both my husband and I learned several things:
- Don’t get lazy! We can’t slack on checking the account balance-we need to keep a much closer eye on it, even when life gets busy. Sometimes we slack because we keep a big buffer here, but we need to be more on the ball
- Communicate! He needs to tell me about outstanding checks, particularly large ones, and not write them on the calendar where I don’t look
- Be on the ball! I need to triple check that I’m using the right paycheck to pay that stupid mortgage
- We are very fortunate. Paying the mortgage twice and paying $550 to a plumber only caused us to overdraw by a few hundred dollars. If we didn’t have such good money habits, it would have been much, much worse. As it is we were able to quickly and easily fix the mistake.
- Follow-up: It took some time at the bank, deposits from other accounts, and freezing the checking account for a few days. But we were able to make it the few days until payday, and they’re not going to charge us overdraft fees. Phew!
It’s amazing how after being together for about 20 years, and married for sixteen, you can still make mistakes and keep learning.
What Was Your Money Mistake?
I agree with Steve at Think, Save Retire that we can learn just as much-if not more-from each others mistakes as our successes. I’d love to know more about mistakes you’ve made with money-big or small. So let me know in the comments a time you made a mistake with money, so I don’t feel alone!
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P.S. Thanks to my friend Mr. JumpStart for reminding me about the other recent posts around financial mistakes! I’m glad to know I’m not alone here. If you’d like to see just how many mistakes the rest of us can make, check out these other great posts!
- ThinkSaveRetire – Don’t brag about success; tell me your failures
- A Journey to FI – MY FINANCIAL MISTAKES
- Chronicles of a Father – My Financial Mistakes
- OthalaFehu – Budget Bungles, Money Muddles, and Fiscal Flubs
- Turning Point Money – My Financial Mistakes
- Femme Cents – 7 lessons I learned from my biggest financial mistake
- Jumpstart From Scratch- Recent Financial Blunder
- The Frugal Gene – Top 5 Sorry Financial Mistakes Of My Early 20s
- Gen Y Money – My Tell All: Investing Mistakes in my 20’s
- 99to1percent – Our 6 Financial Mistakes and 15 Lessons Learned
- Atypical Life – 5 Super Lame Financial Blunders From My Life
- Winning Personal Finance –
My 7 Most Regrettable Financial Decisions
- Foreign Born MD – My Biggest Financial Mistake – Over A Million Dollars Worth!