A Reflection on my 2020 Financial Mistakes

2020 is a rollercoaster ride for me as I have mentioned in my 2020 Year End Blog Post. The first quarter was awesome and then it went downhill from there and then it sort of picked itself up before the year ended.

Even though my perspective of 2020 is on the optimistic side, mainly because of the growth of this blog that I’m really really surprised to see, my financials were not doing that great.

The silver lining though is since I discovered the PF blogging world, I realized through my learnings from fellow PF bloggers, that I could have cushioned this blow if only I have prepared myself financially in the past few years.

Anyway, there’s no sense in crying over spilled milk and the best thing I could do now is to move forward and learn from my mistakes.

I’d like to share with you my 2020 financial mistakes and hopefully, you can pick up a thing or two so you can avoid experiencing the same mistakes in the future.

Photo by Joshua Earle on Unsplash

Going All In

I believe that this is my biggest financial mistake ever. Since I have been growing my online selling business prior to the pandemic year of 2020, I have been going all in.

What I meant by this is, I have been spending all of my income to buy new inventories, supplies, etc to help grow my online selling business, as in ALL INCOME.

For example, if I earn P20,000 for a month then whatever is left (after I pay all my bills), I used that money to buy new stocks.

I know, it’s a horrible mistake.

Luckily, since my online selling business is about second-hand clothes, bags, and accessories, my inventories are not perishable.

However, even though the capital is somehow preserved in the form of the physical items that I possess, they’re still money stuck in my cabinets.

This is something that I know I will not do anymore in the coming months/years.

 

Not Enough Emergency Fund

I have not met my target emergency fund since I am new to the personal finance world and I’m just starting to save money when the pandemic hit. And this is also one of my mistakes in my past life, which is why I’m making this my top priority for 2021.

Whatever amount of savings I had in my bank account had been greatly depleted because I used it all up to keep me afloat in 2020.

 

Mismanaged A Lot of My Time

I have spent a considerable amount of time wallowing in my fears and worries in the past year. Even though I have been consciously helping myself overcome my fears and anxieties on a daily basis, I feel that I still have wasted a considerable amount of time and energy sulking.

This blog has been a tremendous help for me since I was able to keep myself busy and productive through writing articles on my blog.

This year, I have changed my weekly schedule and made it more flexible so I can accommodate managing both my online selling business and this blog.

I know that mismanaging my time, it made me lose money, possible opportunities to earn, etc.

I feel that this is something that will not change overnight and something that I have to work on continuously for the years to come until it becomes my habit.

 

Not Adapting too Quickly

There have been multiple opportunities in the first quarter of the year that I didn’t grab such as selling face masks. I have a friend who earned a considerable amount of money when he took advantage of this opportunity in the first two quarters of 2020.

Another thing that I have should have done was to adjust my pricing accordingly to encourage more buyers. I know that my selling point is uber low compared to my competitors but I also know that I am still capable of lowering it further to encourage more sales.

Special decisions are required in special circumstances.

 

Hoarding Valuable Merchandise

Despite the pandemic, I have decided to hoard a lot of my merchandise just because I like to keep them. Most of the items that I hoarded are vintage designer bags and some vintage designer runway pieces. I also kept buying stuff to keep and not to sell.

This is something that I know is ok in some other circumstances but not in 2020. This year, I plan to post and sell them all (or most of them LOL!) on my online stores to generate cash.

Keeping them is practically costing me money and I’m not earning a single cent by keeping them here.

 

Final Thoughts

Somehow, I feel lucky knowing that it’s not too late to recover from this situation. Although I still wish that I have learned personal finance early on in my life. I could have avoided these mistakes if I have self-awareness of my own finances.

Personal finance is not rocket science. However, since a lot of us are not educated nor exposed to the best way possible to manage our finances when we were younger, it’s causing us some problems in our adult lives.

After reflecting on what happened to my finances last 2020 and the previous years, I realized that the foundation of the mistakes I committed all boiled down to the lack of knowledge about personal finance.

If you are currently experiencing the mistakes that I experienced last year, I suggest that you also start learning about personal finance online by following bloggers in the personal finance field.

A little caveat though, just like any other ideas and solutions in the world, there’s no one size fits all solution. Do not just blindly follow any advice that you see online, but rather, take some time to reflect on those advices and do some small experiments to see which one fits you the best.

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How about you? What are your financial mistakes in 2020 and what have you learned from those mistakes? Let me know in the comment section below.