I Made a Mistake

I made a mistake. It had financial consequences.

We live in a world where people only want to show their best selves. We see this in the highlight reels that are on social media. We see this in resumes and bios. We see this in the covering up of mistakes.

If a mistake was made, it was someone else! It’s their fault! Don’t blame me!

We blame others. We point fingers at the other side of the office or the other side of the political aisle. Sure, “everybody makes mistakes.” Except me. Or at least, that’s what we’d like others to think.

I’m trying to teach my kids a better way. When my daughter Elodie was two, I started teaching her about this. She’d make a mess or spill something, and I’d tell her, “It’s okay to make a mistake. You just need to admit it and make it right.”

One time I spilled something myself, and she pattered up and said, “Dad, it’s okay to make a ‘stake.”

She’s right. It is okay to make a steak. They’re delicious! It’s also okay to make a mistake. We just need to make it right.

I make mistakes. I’m not perfect. The only time I walk on water is when it’s frozen. I make mistakes.

I make professional mistakes! I’m paid to plan for and help execute people’s financial lives. I manage their life savings. And I make mistakes.

Thankfully, none of my professional mistakes have been irreversible. There have always been ways to make them right.

Sometimes we drop the ball on communication, which adds friction to our normally buttery-smooth process. The client experience is less than ideal, and I need to own that. Other times, it costs real money.

Last year, we harvested some gains from a client’s account and forgot to submit the estimated taxes for the transaction. When we did their taxes this past spring, we realized our mistake. The client owed taxes for the year and an underpayment penalty.

Were the taxes owed our fault? No. If you make money, you pay taxes. That’s the nature of things.

Was the penalty our fault? Yes! We are giving the advice. We are managing the money, including the taxes. Our internal miscommunication caused the client to owe a penalty.

I could have done what many people would do.

I could have hidden the mistake under the rug. It’s doubtful the client would have noticed that the taxes owed included a penalty. They would have paid the total taxes without asking if I had only told them the total.

I could have blamed someone else. I could have told them that the IRS made it too complicated. Or that Schwab messed it up. Or that an employee didn’t follow instructions. Anything to take away the blame.

But that’s not what we do around here. Here’s how that conversation went.

“Chuck and Diane, you owe this amount to the IRS and the State of Wisconsin. It is primarily the taxes owed on that transaction last year. It also includes an underpayment penalty and interest since we didn’t pay the taxes in the summer when we should have.

“I failed to ensure your taxes got paid last summer. With your permission, we’ll submit your tax payment from your account to the IRS and state. But we, La Crosse Financial Planning, have already paid the penalty and interest since I made the mistake. Is that okay with you?”

Do you think it was okay with them? Of course. Did it cost us money? Of course. But it was our mistake, so it cost us money.

When we make a mistake, we owe it—both the mistake and the consequences. It may cause short-term pain, but it’s the only way to run a long-term business.

We all make mistakes. Whether we own it and make it right or blame and deflect responsibility, that’s what sets people apart.

Our commitment to our clients is not that we will never make a mistake but that we will always seek to make it right.

Make a mistake. Own it. Make it right. Move on.

This article is educational only and is not intended to be investment, legal, or tax advice or recommendations, whether direct or incidental. Again, this is not investment advice. Consult your financial, tax, and legal professionals for specific advice related to your specific situation. Never take investment advice from someone who doesn’t know you and your specific situation. All opinions expressed in this article are those of the people expressing them. Any performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be directly invested in.