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Real Money Mistakes – Real Money Robert

Robert Gale and Heather Gale in Aspen, Colorado
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Today, I’m starting a new series here at Real Money Robert!  This will be an interview series where I’ll interview people from all over the world, with different backgrounds, different career paths, different upbringings, different cultures, and different values!  The only requirement is that you need to have made some money mistakes at some point in your life!

Who hasn’t made money mistakes?

I’ve made my fair share, to the tune of over $300,000!

So, before I start sharing all of the great interviews that I’ve got lined up, I thought I’d interview myself!

My goal at Real Money Robert is to help people avoid the financial mistakes that I’ve made and live a life free from the burdens of debt.  However, I haven’t lived through all of the money mistakes that are possible, even though I’ve made my fair share!

So, I need your help in sharing your financial mistakes so that together we can help others avoid our mistakes!

Click here if you’re interested in participating in this series and sharing your money mistakes!

Can you tell me a little bit about yourself, what you do, and why you do it?

Well, let’s see…

I’m 30 years old, recently married to my wonderful wife.  We’ve got 5 amazing children between the 2 of us, ranging from 5-13, so our life is constantly hectic!  We also have 3 dogs and have a small hobby farm with chickens and ducks.

We’ll be adding goats this spring if my wife has her way.

I don’t want goats, but let’s be honest here, we’ll probably be getting goats!

At my day job, I currently work full time as a production scheduler for one of the largest printing companies in the world.

I also started a digital marketing business earlier this year that has helped bring in some extra income and has been really fun too!

And of course, I run this little slice of the internet that you’re currently reading!

Every single thing that I do relates back to my family.  I am a family man through and through, and I want to provide an amazing future for my family and my children.  Every decision I make hinges on what’s best for my family.  And that is why I do what I do.

In your opinion, what makes a financial decision a mistake and why?

Well, Merriam-Webster defines a mistake as “a wrong action or statement proceeding from faulty judgment, inadequate knowledge, or inattention.”  So I’d define a financial decision being a mistake as a financial decision that is made based on faulty judgment, inadequate knowledge, or inattention.

I like the fact that this definition isn’t predicated on the results of the decision, but rather on the premise of whether or not the financial decision was made with proper information, knowledge, and attention.

Just because a decision makes money doesn’t mean it’s a good decision, and just because a decision loses money, doesn’t make it a mistake.

What is the most recent money mistake you’ve made? This can be anything, even a small one.

Heather and I got married in September, and when we started our budget for the wedding at the end of last year, we missed a lot of the small details that added up to cost more money than we anticipated.

We had a goal of paying for the wedding in cash, which we were on track to do until it came down to some of the smaller details.  I started my business as a way to earn extra money for the wedding and although we did take a small amount of debt to finish paying for the wedding, that debt is paid and we were able to have the wedding and reception of our dreams!

Why do you believe it was a mistake and what would you have done differently?

I call this a mistake because we didn’t do enough research when we were in the planning phases of creating our wedding budget to recognize that we’d need to spend money on some of the small details that were important to us.

To go back and do things differently, I would have spent more time in the planning process on the minute details and also increased our spoilage in the budget.  We figured there would be some unexpected expenses, so we did plan for spoilage, but it wasn’t enough.

Worst case scenario doing it this way, we would have come in under budget and had extra money to spare.

Over the past 10 years, can you describe three money mistakes that cost you the most and how much each one cost?

401k Early Withdraw

The first financial mistake that comes to mind was my decision to withdraw money out of my 401k early.  I started working at a factory at a very early age to support my family and get me through college.

I started socking away a ton of money in my retirement account while working and even though I wasn’t making great money, I was able to save up about $14,000 by the age of about 23.  Not a huge amount of money, but pretty good considering that most people are just graduating college at that age and entering the workforce.

Also considering that I had three young children to feed and diapers to buy too!

At that point, the company I worked for was purchased by another company.  When going through the transition, I opted to withdraw the money out of my 401k account instead of rolling it into my new employers’ 401k account.

After the early withdraw penalty, using a handy 401k calculator and estimating interest, that $14,000 would have accumulated to around $261,000 by the time I reached the age of 60.

Needless to say, I don’t recommend withdrawing money from your 401k early.

New Vehicle Purchase

Another costly mistake was purchasing new vehicles.  While it’s difficult to estimate the exact cost of these decisions, I definitely left some money on the table here.

Especially when you consider that I traded in the used car that was paid off with the 401k withdraw for a brand new car and the $350/mo payment that comes with it.

I drove that car for a year and traded up for a larger vehicle… growing kids were hard to cram into the back of a Volkswagen Golf…

We leased the larger vehicle and pay way too much since we had negative equity on the Golf.

After the divorce, I’ve been much wiser with my vehicle choices and I hope to have my new wife’s car paid off in less than a year!

Consumer Debt

The third most costly financial mistake I’ve made was taking on too much consumer debt.

This was a combination of credit card debt and personal loans, none of which I have anything to show for other than a few trips to remember.

I once even put a $7,000 4 day trip on a credit card!

Looking back at that, I just want to slap myself in the face!

If you could go back, what would you have done to avoid making those money mistakes?

Well, I would have not done them, duh!

Seriously, knowing what I know now, I would have simply not done them, especially considering that they compounded on each other.

If I wouldn’t have taken the 401k early withdraw, I could have instead just focused on paying off the debt for that used car over time and I would still have that money there earning compound interest for years to come!

I would have built an emergency fund!

Part of the reason that I decided to buy a new car is that our old car broke down on a trip to Florida.

The repair bill was going to be about $2,000.

Instead of having an emergency fund built up so I could pay for these repairs, I traded it in a bought a new car!

Well, financed a new car…

An emergency fund would have allowed me to simply pay for the repairs and be on my way, without that huge car payment!

And the credit cards and consumer debt, I just need to go back and slap myself around so that I save up for these purchases over time instead of putting them on credit cards.

Lessons learned.

Can you tell me about one money mistake you made that you wouldn’t change and why?

This one is really pretty easy for me.

Currently, I have over $60,000 in student loans.

I do not regret getting a college degree as it has opened up a lot of doors for me and helped me significantly increase my income.

However, I went really hard and fast to get my degree.

I worked full-time and went to school online full-time for three years and got my bachelors degree really quickly.

Because of this, I was taking a full course load non-stop and I jammed through everything really quickly and was able to boost my income significantly after graduating.

I could have saved and stretched out my degree over several years, but I would have gotten burnt out from going to school for so many years and my income would have been significantly lower than it now is.

Student loan debt sucks and I’m working hard to get that student loan debt paid off, but for me, it was worth it to take me to that next level quickly.

If you could go back and talk to your 16 year old self, what are 3 pieces of advice you’d give?

  • Avoid credit cards and consumer debt.
  • Purchase quality used cars.
  • Do not withdraw 401k money early.

Looking into the future, what steps are you currently taking to lessen the impact of money mistakes in your life?

I think this one is just a general awareness thing.

Until a few years ago, I was shooting from the hip when it came to financial decisions.

Now, I have monthly and yearly budgets and I plan out large purchases well in advance so that I can avoid these types of debt.

Be aware of your financial decisions and make good, conscious decisions.

By doing this, even if I do make missteps, it will have a lot less of an impact on my finances.

What advice do you have for people who may be going through some of the same mistakes that you’ve made?

Don’t get caught up in the here and now.

Get on track and start budgeting.

Make a decision that you want to get serious about your financial situation and start crushing your debt.  That’s the biggest thing you can take away from this.  If you get serious, you’ll start becoming more aware and you’ll start to make the right decisions for your financial future.

Feel free to drop any of your social media links so that readers can connect with you.

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Final Thoughts

Just because you’ve made financial mistakes doesn’t mean that there isn’t hope.  It’s never too late to turn your financial situation around, even if you’ve hit the ultimate financial lows like I did when I filed for bankruptcy.

Comment below if you’d like to participate in this series and share some of your financial mistakes with the Real Money Robert readers!



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