My Biggest Financial Mishap and How I Fixed It

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We have all done something really really financially bad.  Whether it was a mistake or just poor judgment, we have all done SOMETHING we regret with money.  I’ve made a lot of mistakes.

My worst mistake, however, was when setting up an automatic bill pay.

Automatic bill pays (typically) work brilliantly for me.

I was always that girl who left the envelope containing the payment in my car passenger seat for days.  I always had the best intentions to send it out, but weeks later it was still in that passenger seat.  My husband is just as bad.  Like I mentioned, we have very good intentions and often would write the check the exact same day.  Once it was in that envelope, however, it was doomed to nonpayment purgatory.

So, when I say automatic bill pay works brilliantly – it does, unless I set it up wrong.

I had a credit card that I owed almost $5000 on.  I went into bill pay for that credit card, and somehow I hit the wrong button.  Instead of hitting “pay the minimum payment”, I hit “pay the balance”.  I set it up (or so I thought), and went off about my day.

Two days later, when the bill pay was due, I tried to use my debit card.  Declined.  Hmm.  That’s weird, I should have plenty of money…. tried again.  Declined.

I didn’t think much about it, as I did have some cash on hand.  I ran my last errand, and came home and logged into my bank account online to see what was going on.

I had overdrawn.  By over $2000.  There was a charge for $4,846.00.

I immediately knew what happened.  My heart sank, my stomach hurt.

That moment, I got on the phone with the credit card company.  Could they help me?  Could they reverse the charge?  No, the transaction was complete and there was nothing they could do.

I SOBBED.  I’m not even exaggerating.  I cried like it was the end of the world.  I have overdrawn my bank account by over $2000!!!!!

How My Biggest Financial Mistake Did Not Break Me

I had overdrawn my bank account by $2000.

My husband came in, and once he got my hysterics under control, he said: “It’s ok”.  He was cool, calm, and collected.  How is this ok?!

“We have an emergency savings account.  Remember?”  Well, yes, I did, but not during my mental breakdown.

It was a Friday night, and the bank was closed.  There was nothing I could do but arrive at the bank first thing Saturday morning.  So, I did.

I showed up and transferred literally every last bit of our $4000 emergency savings into our checking.  (I only overdrew by $2000 but needed more money if we were going to continue to live until the next payday so that’s why I transferred the $4000.)  We did incur a small overdraft charge of $25, but it could have been SO MUCH WORSE.

Friends, this is why we have emergency accounts.  It’s not just for when the car breaks down, your washing machine dies, or if your roof gets a leak.  It is for when you click the wrong button and overdraw your account by $2000.

How Much Should I Have in an Emergency Account?

I’ve seen lots of different figures and numbers on how much money should be in your emergency account.  I’ve seen $1000, and I’ve seen more than that.  I think it depends on who you ask.

Dave Ramsey says to start with $1000, and then get built up to 3-6 months of expenses.

Personally, I agree with a minimum of $1000.  More if you can.  If you think about my above mistake, if I had just $1000 in our emergency account, I would have still been overdrawn.

How Do You Build an Emergency Account?

Simply, you build an emergency account by whatever means it takes.  I know it’s hard.  Especially if you are living paycheck to paycheck.

Try to take a small amount from each paycheck.  Maybe you can have an auto-deposit into savings.  I can’t tell you what amount to use because it’s individual.  You might only be able to afford $10 a check.  Or you might be able to set back $100 a check.  It’s up to you and your personal lifestyle.

You can also use the extra money for this rather than pull from your paycheck.  (I’d actually do both.)

Sell Your Stuff

Sell your stuff, and save your profits.  You can do this by having a yard sale, consignment sales, utilizing eBay, or even selling on your local Facebook yard sale groups.  Get rid of your unnecessary items, and use those profits for your emergency funds.

Online Surveys

There are plenty of online survey opportunities that actually reimburse you quite well.  Add a few surveys into your day, and use that money toward that emergency account.

Swagbucks is one place to make money with surveys, but you can also make money in many other ways including just surfing the web!  I wrote a blog post about Swagbucks and the multitude of ways to earn Swagbucks. If you sign up through my referral link, you will get a bonus $5 to start with!!

E-poll is another online survey opportunity that I’ve used personally.  It adds up quick, and well laid out, easy to use. You can get cash via PayPal or a gift card, and they have drawings every month for cash prizes too.

Vindale is another reputable survey company that will pay you via PayPal.  Also, Pinecone Research has a great reputation.

Money Saving Apps or Programs

Ibotta or Checkout 51.  Both of these are ways to scan your grocery receipts (Target, Dollar General, Kroger, Walmart), and earn cash back that can be paid out as a gift card OR CASH.  I wrote a more detailed post about both of these free apps and you can read about them here.

Ebates is one of my favorites.  If I am already shopping online, I will shop through them and get money back.  They pay by check or PayPal.  Put that savings right back into that emergency fund.

Cut the Cord

Cut the cord, and get rid of cable.  Get rid of your expensive cable bill, and use that allotted money to build that emergency fund. There are plenty of good CHEAPER alternatives to cable, such as Netflix, Hulu, or Sling.  We personally use Sling.  It’s affordable, very reliable service, and we get everything we want to watch (yes, even Food Network!).  We have had Sling for probably almost 2 years now.

Build that Emergency Fund Fast

Remember, the faster you can build up the emergency account the better.  We never know when an emergency is going to happen, so you want to be prepared.

Start with that $1000 minimum, but then try to build a bit more after that.

I’m curious what your biggest financial mistake has been?  Did you need an emergency account to save you?  Did you ever find yourself needing emergency money, and not having it?