Like me, you have heard the phrase, “Whatever you do behind closed doors comes to the light,” many times throughout your life. Nine months ago, I engaged in a new relationship and had no idea it would end up being a financial expense. When this relationship began, I was excited because it was going to meet a deep desire.
In April of 2018, I met with a banker (behind closed doors - LOL!) and opened a business savings account. This account pays interest and because I knew there would not be any additional transactions, I didn’t see the need to pay attention to the statements since the interest earned would be added to my balance each month.
After nine months passed, the time came to close the Game Time Budgeting books for 2018. I was excited to know I had been making unearned income by doing nothing. I looked at the final statement for 2018 and saw two lines that caught my attention (underlined below).
Because I had noticed only the interest amount posted to my account each month, I assumed it was accurate. Here’s a tip: You can let a bank count your money for you but that does not mean their math is correct. I went behind closed doors again and discovered the profile on my account didn’t list a specific document which was actually on file. Because of this, the full amount of interest this account should have been earning was understated.
There you have it. I confess that my lack of attention (i.e., not counting my own money) had a serious consequence until the problem was corrected. This makes me wonder if there are opportunities you may be missing out on by not being more financially aware. For example, when the traditional and Roth IRA contribution limits were increased by $500 from 2018 to 2019 ($6,000 per year), did you seize this opportunity? Since the 2019 HSA (Health Saving Account) contribution limits for individuals and families went up by $50 and $100 respectively ($3,500 and $7,000), did your financial plan take advantage of this opportunity to increase your pre-tax savings? Every financial decision has a consequence, however, when we don’t count our money or possess the necessary information to make an informed decision, our options are limited.