Money Mom Podcast

52: The $50,000 Money Mistakes I Made (So You Don't Have To)

• Rachel Coons • Season 1 • Episode 52

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Money mistakes happen to everyone—even financial coaches. In this vulnerable deep-dive, I pull back the curtain on three devastating financial blunders that cost me over $50,000 and continue to impact how I think about money today.

These costly lessons shaped me into a better financial coach and a happier person. Listen now to skip the expensive tuition I paid for these insights and transform how you think about your own financial journey. What money mistakes have taught you the most valuable lessons?

xoxo,
Rachel

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Speaker 1:

Hey there and welcome back to another episode. I'm Rachel, your host, and today we're going to get a little bit messy and I am going to share some of my deepest, darkest secrets with you. No, I'm just kidding. I'm not actually going to air my dirty laundry on the internet, but I am going to share some huge money mistakes that Brad and I have made together. I'm going to pull him in on this as well. He's making mistakes with me in hopes, for a couple reasons.

Speaker 1:

First off, I am a money mom coach. Right, I teach moms how to control their finances and I teach budgeting, I teach wealth building, I teach money mindset. I teach all of these things. But it's not because I haven't made mistakes along the way, and some of our biggest mistakes become our biggest teachers. I think it's really important to remember that if you're in the thick of it right now, it is okay to make mistakes. In fact, I think sometimes the bigger the mistake that you make, the more you can learn from it. And you know before we dive into this episode.

Speaker 1:

First off, it's normal to make money mistakes and, like the ones that I'm going to share with you again, $50,000 plus of mistakes that I've made I don't hold on to them, right, I move past them. I understand that this life is a journey and we're here to mess up. And money is money, right, it can feel in the moment and I will tell you, in the moment some of these mistakes felt really awful and I felt really bad about myself. It can jump really quickly back into that scarcity mindset. But when you step back and you're like, it's okay, a couple thousand dollars is here nor there. There's nothing I can do about the mistakes that I've made in the past and I don't want to hold on to them, to have them affect me in the future. So today I'm going to get really real about the mistakes that I've made, not something just basic like oh my gosh, I purchased too many happy meals for my kids kind of mistakes. I am talking about expensive lessons that have cost me over $50,000. Lessons you can learn from me so that you don't make the same mistakes I did. So let's jump into it. The first mistake that was a complete facepalm moment happened more recently. This was the most recent mistake that I've had and again I know where the money's going.

Speaker 1:

Every month we check our credit cards, we pay them off in full and I have all of my credit cards set on auto pay, so at a certain time of the month the credit card just comes from the bank account. We make sure we have enough money in the bank account and it all works fine and I feel like I'm in very good control. But recently I got an email from one of my credit cards. I'm not even gonna say which one it was, but I had a credit card from a store that I rarely shop at. Okay, fine, I'll tell you what it is. It was Target.

Speaker 1:

I have a Target red card and it's totally normal. Most people have a Target red card. I signed up for it years ago, like 10 years ago and I shop at Target. I'm not a huge Target shopper, mainly because I just spend a lot of money when I go there. So I don't go there very often. Really, I'll order if I need to pick up an item. Most of the time I'll just order online, drive up, pick it up, and that happens maybe once a month, so I'm not really spending that much at Target.

Speaker 1:

Well, I got an email that said I owed $4,000 on my Target red card and I got the email and I was like what is happening? What is going on? Surely this has to be fraud. Somebody stole my red card and went and bought a bunch of things at Target and that's why I owe over $4,000. So when I get home on my computer and I check my statement and I realize that I'm on autopay Again. I've set all my cards up on autopay but unfortunately this card and I don't know why was not set up on paying off the statement balance every single month. It was set to pay the lowest balance that you could every month and if you don't know this about credit cards, automating your payments is a really good idea. I highly recommend automating your credit card payments, but it needs to be paying off the statement balance. And when I didn't set it up to pay off the statement balance, it was paying off the lowest balance, which then means there is interest on your credit card and this interest has been racking up for about two years.

Speaker 1:

I had no idea this was going on. I had no idea that I was paying 25% on interest on like a hundred dollar charge, month after month after month, and this was not something that I couldn't pay off. It wasn't like I could have signed into my account and paid it off right away. I just had no idea that it was happening. I didn't sign into my red card. I just thought it was getting paid off and I didn't worry about it. And all of the apps that we have you know, we've signed up with a couple different apps to track our subscriptions and our credit cards and help run the money. None of the apps were pulling up this credit card and so it just was off into the abyss. And when I signed in and I saw that interest charges every single month, it was like $100 every single month that I was paying.

Speaker 1:

I can't even tell you the pit I had in my stomach and I felt so dumb, I felt so shameful, I felt really embarrassed. This was something that, like, I'm supposed to be the one that is in control of our money and I am literally doing the exact thing I tell nobody to do. I've never had credit card debt and I can now say loud and proud that I have had credit card debt. I just didn't know about it and we were throwing away thousands of dollars to this stupid credit card. Luckily, my husband, brad, is the nicest, kindest, most patient person and I was really embarrassed and so I called him into the room and I was really embarrassed.

Speaker 1:

And so I called him into the room and I was like, hey, I had no idea that this card had been paying off the lowest statement balance. I'm so sorry. We have like a couple thousand dollars we need to pay on this card and luckily we have an emergency fund we have, you know, we we really like to keep a good cushion in case things like this happen, and so that money was not going to send us into debt, it wasn't going to push us over the edge for the month. But he just looked at me and was like, well, I hope you learned your lesson and I hope you now check all your credit cards every month. And he just walked away and he didn't make me feel shame, which I'm so grateful for, because he really could have gotten mad If roles were switched. I probably would have gotten more mad at him than he got at me and he actually called the credit card company and explained to them what had happened. Obviously they don't care. They're in it for the interest. That's what they want you to do. So he ended up paying off the credit card and then we changed the statement to the statement balance I have vowed to not shop at Target for a while because I'm still so bitter about it and so angry.

Speaker 1:

But here's the deal about this mistake that I made. It's a very easy mistake to have happen and I'm sure there are going to be some of you listening to this episode where this has happened before or it's happening right now and you don't even know it. So a couple of things that you can do to combat this mistake that I learned through this. First, make sure when your automatic payment goes out of your credit card, you get a notification to your emails. When you get that notification, you can sign into your credit card and check the balances. Now, this was a credit card I don't use very often and that's why I didn't check, because I just figured when it was paying off the balance. It was like, oh, that one trip to Target, that's what it was paying off, but I didn't know how much was going there and I didn't know what it was charging me. And I should have. Now I know I should have logged in to every single card that I have and making sure that the full amount was getting paid off If you choose to use credit cards, which I actually am a huge proponent of. Even after this experience, I still believe credit cards are a really great thing to use, as long as you use them correctly and as long as you're paying off that full statement balance every single month.

Speaker 1:

Okay, mistake number two. Let's talk about the biggest facepalm moment that we have had in our marriage dealing with finances, and Brad and I still talk about this mistake to this day. It happened in 2015 and it's now 2025. And I still lose sleep over this mistake, because this was our biggest money mistake I think we've made so far. Other than not purchasing a home in 2019, which would have been a really good decision to make, we decided to purchase in 2022. So we were like at the top of the market, but that's here nor there. We can't change the past, but this mistake was a conscious mistake that we made, a decision that we made that turned into a big mistake.

Speaker 1:

This mistake may be a little controversial. Some people may agree with me, some people may agree with me, some people may not but when it comes to how Brad and I have decided to run our finances, we have decided to take on some debt. I truthfully don't believe that all debt is bad debt. There is good debt and bad debt, and good debt is financing that you can get at a low interest rate. If I can take a debt that's going to make me pay 3% interest over time and I could take that money and invest it into an index fund or a Roth IRA or something else where it's going to compound interest over the years and I can make back more than that 3% interest on the debt, I would much rather do that, because we know that money invested most of the time makes 7% to 10% growth over the year. Some people have a big aversion to debt, and that's okay. You get to choose how you want to navigate your finances, but I am not averted to low interest debt. I am very much averted to high interest debt. As seen in mistake number one, if your interest rate is higher than six or 7%, you 100% should try and get rid of that debt as soon as possible.

Speaker 1:

Brad started dental school in 2015. And, if you don't know, dental school is actually one of the most expensive professional schools that you can go to. Like we were paying over $100,000 a year to go to dental school. That was just for school. That's not living, that's not food, anything else, it, just for school, was like $120,000 a year. And so we knew going into school that we were going to rack up a lot of school debt and that was a very conscious decision that we made for him to go to school. But we didn't like the idea of having all of this debt and we really wanted to be responsible with our money and we had saved up quite a bit of money before going into dental school Because we were in college, we were making good money. I was actually I was out of college, brad was in school, but I was working full time making good money and we just like saved that money in our bank account and we were stressed about this debt that we are going to.

Speaker 1:

So what we decided to do in the first or second I can't remember if it was first or second semester of dental school, we decided to take our $50,000 that we had in the bank account and use it to pay off the first year of school, which sounds super responsible, right? It sounds like, yeah, that's what you should do. You should put that money towards your debt, but it's wrong. I think we had locked in like a three or 4% interest rate at that time, so we threw $50,000 at an interest rate debt at 3%, while the market was returning 10% annually around that time. And now, even you know, 2020 was even more. If we had taken that $50,000 and held on to the school debt, that money would be worth $75,000 today, $100,000 in a couple years, like it would just compound interest increase over time, and that $50,000 would have been much more money in the long run. So here's what I wish I had known then. I wish I knew that not all debt was bad debt and I wish I didn't get stressed over that small amount of debt that we had, because that fifty thousand dollars didn't even barely touch the amount of school debt that we had over the years and brad and I are always talking about. Had we taken that debt, we could have built a lot more wealth over the years. I mean, we were 25 at the time and we could have used that money and been much more strategic with it. We just didn't know what we were doing and we were really short-sighted in that decision and that was a huge money mistake. And the last mistake hits a little bit differently than the first couple mistakes, because the first couple mistakes are more tangible.

Speaker 1:

For years I was so focused on being good with money. I got my first job at age 15. For years I was so focused on being good with money. I got my first job at age 15, and I worked all throughout high school. I worked all throughout college. In the summers I would work full time and while I was in school I would work a TA job. So I made money doing that and I was all about making as much money as I possibly could so that I could have extra money at the end of the month and not feel stressed about money.

Speaker 1:

But in that process I forgot what money is actually for, and what I forgot about was the things that were really important to me. And what is really important to me is different, for maybe what's important to you, but what's important to me is experiences and memories and creating adventure and fun. I really that's really highly valued for me, and for a long time I just thought money was a means to an end, where I used it to pay the bills and then whatever was left over had to go into a savings account for the future in case something bad happened. And I don't think that that's a bad way to view your money. I think it's a very smart way in the right conditions, but the problem was is I said no to a lot of experiences where I shouldn't have I had the money, I should have said yes, one of those experiences being I went and did a study abroad in New Zealand and on that study abroad we had a lot of experiences that we could choose and some were out of pocket and some were paid for, and most of the experiences that I had the opportunity to do that were out of pocket, I said no or I took the lowest possible price for it, because I didn't want to spend my money. And what I've learned now is that memories are priceless and experiences are priceless.

Speaker 1:

Just to save a couple hundred dollars in the long run is really short-sighted, and I wish I had more memories from my younger years. I wish Brad and I had taken more trips before we had children. We had the money to do it. We spent $50,000 on stupid dental school debt. We could have taken a really fun vacation and not go extravagant. We didn't have to travel expensively, but we should have taken a really fun vacation and not go extravagant. We didn't have to travel expensively, but we should have taken more vacations. You know, spend $10,000 on memories and the other $40,000 could have gone into the stock market, and I really regret not having that value alignment with my spending at a younger age and not feeling stressed about spending money. Not to say you should be completely careless with your spending, but if you have extra money and you are paying for everything and you're saving and investing and doing all the things you should, that extra money should be used to create whatever life you want to create, and you shouldn't feel bad about that.

Speaker 1:

So now that I've learned that about myself and what I truly value, I follow a simple rule I want to spend money on experiences. I want to create memories with my children. I want to save money on the stuff that doesn't matter to me, things that aren't important, that don't create memories, but the stuff that does. Yeah, heck, yeah. I wanna buy that vacation. I wanna take our kids on adventures and create memories with each other, because I only have so many years with my children, and so I would rather not worry about the extra $100,000 in my bank account and spend it on that.

Speaker 1:

And you may not resonate with this idea of experiences and memories and value that, but you get to decide what does matter to you, what things are you wanting to spend your money on, and don't make the mistake of getting run into the mundane bills that come in every single month and forget the bigger picture of why we make money, why do we have money in our bank account and why do we spend money.

Speaker 1:

And once you can really get down to the nitty gritty of what's important to you, I think you'll find that money is less stressful and money doesn't feel quite as heavy because you're in control of it and it really aligns with you. So now that I've shared my three biggest mistakes, I hope you can take away some lessons here. First, I hope you understand that everybody makes mistakes and if you are feeling guilty or bad about past mistakes, it's time to move on. It's time to look at them for the experience and the lesson and be grateful for the things that you learned and then move forward with more knowledge. And second, if you're feeling like you've made some of these mistakes in the past, remember the goal is to learn from other people's mistakes and your own, so you can skip these really expensive lessons. I hope you learned something today and I hope you can take away some things from this episode and I will see you next week.

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Rachel Coons

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