This is a column by regular contributor Clark.
I’ve read that unless a person is ready to learn something, any advice offered is virtually useless. I say virtually because the advice makes the receiver aware that there is a different way to their present path (for better or worse – not all advice is good!). But, the knowledge is useful only when applied to obtain a practical solution. In the personal finance world, writers do their best to help readers avoid pitfalls by offering suggestions and examples and sharing experiences about getting out of debt, remaining debt-free and planning for retirement.
I’m positive that many people benefit from them but for those who just won’t listen, I wonder if it is such a bad thing to get burned to feel the pain and then, get prepared to listen and learn. I realize that there are situations which could become irreparable or those that make a severe dent to change one’s path forever. Nonetheless, I’d like to use three random cases to highlight my views.
A Car Crash and Work Incident
1. “Speed thrills but could kill” is a universal truth but I had to learn it the hard way to realize my folly and become a responsible driver. I won’t go into the details – let’s just say that I was fortunate to not get injured in the single-vehicle collision and I got the message!
2. At work, a colleague and I are in charge of a specific department. The job profiles are not strictly delineated and since we share the space, I have, more than once, covered for the person. Without getting into the specifics, let’s say that there are certain tasks that run on an abnormal schedule. Such a protocol is prone to errors due to forgetfulness – a person needs to watch and do the needful when required (one can set reminders and alerts but they still need to be acted upon!). I have reminded my colleague on several occasions about the impending maintenance task.
The colleague has remembered to do the task some times and forgotten on other occasions when I did it to cover and keep the department going. There were the “thank you” and “taken for granted” situations in equal measure. Recently, I reminded the colleague on a Thursday that the maintenance task needed to be done before the weekend and forgot about it myself (trust me, I really did!). The colleague duly forgot about it and got called late in the night during the weekend to fix errors/interruptions that had happened because of the forgotten maintenance. A couple of weeks later, though the maintenance was not due until the following week, I noticed the colleague performing it at the end of the week. I smiled to myself and realized that learning a lesson the hard way definitely does have its benefits as I’ve seen myself.
My Progression in Personal Finance
3. Three years ago, I was making the minimum payments on my student loans and did not have any credit card debt or savings account. However, I did not understand (actually, I never stopped to think about it) that dragging a loan to its full term is not the only way and prepaying it would save me money. My reasoning was that the monthly payments would remain the same even if I paid more than the minimum; so, why bother? (the time factor never crossed my mind and I never discussed with anyone either!). Sometime later, a friend mentioned about the ING savings account in passing (I had seen ING ads but never paid attention to what they were for) and that kick-started my enthusiasm for personal finance.
I opened one account, pumped excess cash flow into it, and a year later I had a substantial amount in my ING savings account; I wondered why I shouldn’t pay off the student loans in one go. I did the math and realized that I fell short by a little more than a thousand dollars. I could have waited until the next month’s paycheck but couldn’t resist; so, I borrowed from my credit line to pay off the loans a week after the thought first occurred. Actually, paying off the loans by borrowing from my credit line for a few days worked out marginally cheaper than waiting until the end of the month (for the paycheck) would have been but that is beside the point.
It felt great to be debt-free and to have increased cash flow. Two years later, here I am, saving diligently, banking my raises, investing in stocks and questioning why I need to do things a certain way for the sake of convention. As I look back, I realize that 2007 was the year when I was prepared to learn! In fact, more than being prepared to learn, I started to think better and questioned why I should or shouldn’t do things in a pre-set way.
This post is not meant to showcase my good fortune or prudence but to underscore the fact that being ready to learn by asking questions than accepting the status quo and learning the hard way give us a better frame of mind to grasp, retain and utilize the lessons learned. Sometimes, things may not end well but many times, they are not as bad as they seem!
Do you have stories (not necessarily PF-related) where you wish you had listened the first time? Have you got burned despite being advised to the contrary?
About the Author: Clark is a twenty-something Saskatchewan resident employed in the manufacturing sector. He repaid around $20,000 in student loans and has been working to build his investment portfolio as a DIY investor (not trader) while nurturing plans to retire early. He loves reading (and using the lessons learned) about personal finance, technology and minimalism.