A certified financial planner shares her journey through early financial blunders and how she found her way back.

At the start of my career, I thought projecting a certain image was essential. Shopping, especially for suits, was not my favorite activity. Hearing about custom suits from my male peers seemed like the answer to my dilemma. They had it figured out: convenient fittings at the office, options to choose from, and various fabric selections. I didn’t think twice about the price tag. After buying two jackets, two pairs of pants, a skirt, and several shirts, I found my wallet $3,500 lighter. Regrettably, I disliked nearly every piece. Even now, those clothes sit in my closet, a constant reminder of my misstep.

This experience highlighted a crucial fact: mistakes are a universal experience, and they don't have to define our financial journey. With growth, I’ve come to grasp why I splurged on items I never wear, and I won’t make that choice again.

Now, I reflect on each mistake by asking: “What lessons can I draw from this? How can others benefit from my experience? What strategies can I employ to prevent repeating it?” Here are additional insights I've gained from my financial misadventures.

Embrace Mistakes as Learning Moments

As I’ve matured in the financial planning world, I recognize that the traditional suit isn't necessary for professionalism. I can present myself well without resorting to uncomfortable attire. Shopping still isn’t my strong suit, so I now use subscription services to conveniently receive professional outfits at affordable rates.

But the suit saga isn't my only financial blunder. Post-divorce, I purchased a house in the suburbs of Omaha, Iowa. Shortly after, I met my husband, who resides in Nebraska and had to follow a custody arrangement that kept him there. When we married less than three years later, selling my house became unavoidable. While I didn’t incur a loss, I missed out on potential appreciation due to moving costs and closing expenses.

The takeaway? Major financial decisions shouldn't be made during tumultuous times or when emotions are heightened.

Allow Yourself a Soft Landing After Errors

I often think of the incredible trip I could have enjoyed instead of investing in those custom suits. However, my emergency savings reassured me when the bill arrived, so I didn’t stress about covering my rent.

This financial oversight could have spiraled into a disaster without the cushion of my emergency fund. Even now, my savings empower me to take risks. I encourage everyone to create this safety net for themselves.

What defines an emergency fund for you? Is it solely for catastrophic events, or can it also provide support during personal setbacks, allowing you to maintain your financial trajectory? An emergency fund can also serve as an opportunity fund, helping prevent regret.

At minimum, your emergency fund should cover three to six months’ worth of living costs. Beyond that, it can enable you to seize opportunities that exceed your regular budget. For example, when I spot a fantastic airfare deal to a dream destination, I can act quickly, using my savings to secure it and later replenishing the fund. This could also apply to investing in a business or a lucrative real estate opportunity.

Life's Uncertainties and Shifting Plans

Sometimes, what seems like a solid financial decision becomes problematic due to unforeseen changes. I've faced this myself.

During the initial year of the COVID-19 pandemic, mortgage rates dropped significantly, prompting my husband and me to refinance. However, shortly after, we had to relocate due to changes in our family dynamics.

The daily commute escalated from a manageable 25 minutes to over an hour. More importantly, our children’s needs evolved, leading us to enroll them in new schools closer to home.

While I wish I hadn’t spent $3,600 on closing costs, I don’t regret prioritizing my children’s education and our well-being. Had I foreseen these changes, I would have opted against refinancing to save that money. But that’s not how situations unfolded.

Even Professionals Make Financial Errors

As a financial planner, many assume I’ve flawlessly executed my own financial strategies. That’s not the case. I openly share my mistakes, and I know many other planners with their own financial missteps.

Hearing these stories can help put your experiences in perspective. If you’re interviewing financial planners, don’t hesitate to ask about their challenges. It’s comforting to know you’re not alone. An advisor who avoids discussing their own mistakes might not be the right choice for helping you embrace yours and move forward.

Practice Self-Compassion

We’re all human, and mistakes—financial or otherwise—are inevitable. Acknowledging that you’ll stumble at times can help you build a resilient financial plan that accommodates those moments.