We’ve all done it. Whether it’s something small, like treating yourself to a new outfit you can’t afford, or something big, like purchasing a car that’s way too expensive, everyone makes a money mistake at some point in life.
Money mistakes, especially those that lead us into debt can create a tremendous amount of stress and overwhelm. No matter the circumstances it’s never fun to deal with. But, the truth is dealing with your money mistake is the only way to eliminate the pain of the situation.
The good news is that there are simple steps you can take to recover from a stupid money mistake.
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Relax and Take a Deep Breath
OK, you spent too much. It happens, but beating yourself up over it won’t do any good. In fact, it’s possibly the worst thing you can do because it often results in more poor decisions.
Let’s face it retail therapy is real. When you’re feeling terrible over a stupid money mistake the easiest thing to do is make another purchase to help yourself feel better. However, the one thing I can tell you with absolute certainty is this is never the solution when you’re in a financial bind.
So take a deep breath and remember it’s about progress over perfection. With a little bit of effort, your mistake will soon be, behind you!
Take Responsibility
The next thing you want to do is take ownership of the mistake. When we make excuses or try to blame other people or circumstances for the choices we make, we never learn and we continue to make poor choices. Until you accept responsibility for your actions or failures, it’ll be very difficult for you to overcome them. This is largely because you are giving the power over your money and your life to someone or something else.
On the other hand, when you take personal responsibility by owning your choices and the consequences of those choices, you actually gain power over your life. With that power, you can begin to make better choices and take ownership of your life and finances.
You see taking personal responsibility for our choices gives us total control in creating the life we want! But, it starts with accepting responsibility.
I know it’s often hard to own a bad situation. It can be quite humbling to admit a wrong, and a little scary to be vulnerable in that way. Yet, often the best changes come through doing it scared.
Examine Your Finances
Now that you’ve taken a deep breath and are taking ownership of your financial choices, it’s time to take an honest look at your financial situation.
Trust me, I know the idea of examining that credit card balance makes you more than a little anxious. But after the initial shock, you’ll be able to address the situation and move forward. Plus, if you don’t understand what your financial situation really is, your initial money mistake can quickly snowball. When this happens it’s so much harder to take action to fix the situation.
So sit down and look at the impact your money mistake has had on your finances. Examine your income and look at all your debt and necessary expenses. Get all the information down on paper so that you have it in front of you in one place.
Make A Plan
Make A PlanIt’s now time to make a plan to address that money mistake.
However, before you can make a plan, that will have a lasting impact, you need to make sure to address the actual problem that contributed to the improper spending. It may be something as simple as a misjudgment or something more serious such as regular destructive habits. If you find a pattern of bad financial choices, you need to address those and resolve to change them now!
This does not mean you have to stop purchasing anything and live off of rice and beans until the debt is paid off. In fact, this solution rarely works. It’s akin to crash dieting. You may lose a few pounds initially, but in no time, your right back where you started or even worse off.
It’s about making a lifestyle change and finding a balance between paying off that debt, saving for the future, and enjoying the life you have now.
You can still splurge but save up first.
In order to do this, first, make a plan for fixing the initial money mistake that got you into this mess. Realize this may require you to redo your entire budget or find a way to make more money.
Now you need to make a second plan. This plan needs to address those things that contributed to the money mistake in the first place. What I mean here, is that you need to determine what circumstances are leading you to overspend.
By being intentional in how you will handle the circumstances that led to the money mistake, should they arise again, you will be able to avoid making those same mistakes.
For instance, if you’re impulse shopping every time you run to Target, consider shopping on Amazon. This way you can search only for those items on your list. If you have Amazon Prime, you’ll be able to get free two-day shipping, and in many instances, you can have it delivered the same or next day for free. You can get a free 30 day trial of Amazon Prime here.
Or perhaps you’re overspending on the weekends or during social activities, gather a list of fun things you can do that are free or inexpensive. Just do a google search for free activities in your area.
Having a plan in place to prevent overspending will enable you to save up for those splurges you really want.
Learn From Your Mistake
Finally, the single most important thing when it comes to recovering from a money mistake is learning from it. We’ve all been there, done that at some point in life. But the key difference between someone who makes a rare or occasional money mistake and someone who consistently lives in a state of financial chaos is the former makes it a point to learn from their mistake so that they don’t repeat it.
So embrace the learning moments and focus on the fact that you are moving forward and improving your financial situation.
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