Lessons Learned (The Hard Way)

I could probably do a month’s worth of posts – if not more – devoted to my own financial mistakes and the lessons I learned from them. But for the sake of our reader’s attention span and my own mental health, I’ll just focus on one big one for now.

Lately I’ve been keeping the balance in my checking account low, just enough to cover my monthly expenses and a buffer for small, unexpected emergencies. The rest I pile in my bevy of savings accounts that I have set up for a variety of purposes. The one account that I pay out of my checking account that has a balance that varies from month to month is my credit card. I don’t get a paper statement from them, just an email notifying me that I can download my statement online. Usually I just mark that email in my account and towards the end of the month I retrieve my statement and pay my bill. And this has worked smoothly for me since I’ve had the account. The varying balance is not a big deal, as I roughly charge the same amount each month, and I frequently update Quicken, so I typically have a pretty good idea of what to expect when it comes time to pay my bill.

Well, this time it was different. December was an expensive month for me: Christmas gifts, travel expenses, school expenses, money spent for my upcoming anniversary…all those atypical expenses came in the month of December. Added to that was the fact that I wasn’t as up to date on updating Quicken as I usually am. So when I finally retrieved my bill with about two weeks to go before payment was due, I was in for a bit of a shock. The balance was much higher than I had expected, and I didn’t have enough money in my checking account to cover the charges. No big deal, that’s why I have those savings accounts set up. And it would work out that I could transfer the money to my checking account in time to send the check out and everything would be fine. And then things started to not be fine.

The day the funds posted I went about writing the check. Except that I made a mistake when filling out the check. So I shredded it and went to grab another. Except there was no other; the checkbook was empty. No big deal, I was sure I had some more. Nope, that was my last checkbook, and I hadn’t reordered any. So I went online to reorder checks, and the soonest they would arrive would be well after the bill was due. Ok, on to online bill pay, something I had set up a while ago but hadn’t gotten in the habit of using. So this would be good; I could start using that instead of paper checks. And to my deep dismay I saw that that check wouldn’t be delivered until two days after the bill was due. Ok, now I’m frustrated and irritated at myself for getting into this situation. But I have one more saving grace; I could go through my credit card company and use them to do a bank-to-bank transfer from my checking account directly to my credit card account. So I log on and begin that process, only to then discover that they have transfer limits that are quite low, and not enough to cover the full bill in time. Now I’m lost. I’ve exhausted all potential options, and I’m now going to have to call my credit card company – luckily it’s a credit union and I’ve met my account representation, and she’s been very helpful in the past – and work something out, either an extension or perhaps they’ll accept something like a cashier’s check. I’m sure I’ll work it out, one way or the other, but regardless, I’ve somehow managed to turn the simple act of paying a credit card bill in to a stressful and drawn-out chore. Nicely done Michael.

The worst part is this whole situation was completely avoidable. I should have been more aware of how much the bill was going to be. I should have ensured the funds were there in my account earlier. I should have had a larger buffer in my checking account. I should have noticed when I started running low on checks and ordered them earlier. There is seemingly no end to the number of things that I could have done to avoid this situation, but here I am.

The lesson here: always stay on top of your finances. When you become lax about managing your money, you open the door for all sorts of things to go wrong, as I found out the hard way. We’ll see how this shakes out, but whether I escape unscathed or not, you can be assured that I won’t be making this mistake again.

Michael

Twitter: @michael_dink