We’ve all got so much on our plates — now more than ever before, due to the new pandemic responsibilities we’ve shouldered over the last year. We’ve got jobs and careers, partners and families, and those all-important questions about what to make for dinner… Every. Night. It’s no wonder, then, that understanding and processing our relationship with money, and our financial mistakes and wins, isn’t always a priority. In fact, most days it’s probably not even on our radar, but the truth is that our internal financial dialogue and confidence around our money matters touches every facet of our lives, says financial expert Dr. Kerry Mitchell Brown.
So when you make a not-so-great decision around your money (like taking on too much debt or investing in a company that goes belly up), you may experience intense guilt, since you know that decision isn’t just impacting you in the here and now — it’s possibly going to impact your financial future, too.
“Bad or poor financial decisions have long-term ramifications,” Dr. Brown says. “The fact is, many of us are not as financially literate as we would like to be, and therefore underestimate or don’t understand the implications of our financial decisions or non-decisions until it’s too late. The realization of having to overcome past financial mistakes can instigate a lot of guilty feelings and regret.”
But here’s the thing: Even though we may feel regret and guilt (and possibly a lot of it) when we make a mistake, we can move on from it and get to a better place emotionally. Here’s how to keep on truckin’ after a financial setback, and get to a place where we’re actually excited to check our account balances, pay our bills, invest, and even budget.
Examine what you’ve learned
To let go of past mistakes, you need to process what you’ve been through — and more importantly, to congratulate yourself on what you’ve learned. Now that you’re on the other side of your mistake, you’re ready to make better choices. That’s why psychologist Dr. Yvonne Thomas, Ph.D., recommends taking time to write down the lessons that have transformed your perspective. “Change entails being self-aware enough to recognize, take responsibility for, and then modify your unhealthy thoughts and/or feelings which led to the wrong financial decisions,” she explains.
Discover your triggers
If you’re struggling with letting go of a financial mistake, it may be because you worry about history repeating itself. Much like we have emotional triggers based on past experiences, we also have financial ones that may tempt us down a similar path (Like overspending, or failing to budget.) That’s why Amy Morin, editor-in-chief of Verywell Mind, says it can be helpful to pinpoint your triggers. “Loneliness and boredom might lead to online shopping. Excitement might cause you to fall prey to a get-rich-quick scheme. Sadness might cause you to avoid paying bills,” she continues. “Examine how you might be overspending or making impulse purchases and how your emotions impact your judgment.”
From here, Morin says you can identify new coping strategies to deal with those emotions. “You might find a new hobby or practice another skill, like yoga, when you’re tempted to repeat that mistake,” she adds.
Shift your mindset toward forgiveness and action
Perhaps when you were 18, you decided to go to a costly undergraduate program that’s now left you hundreds of thousands of dollars in debt. You’re chipping away at it gradually, but now, the word ‘debt’ can send shivers down your spine. Instead of feeling angry or upset when you think about your debt, shift your mindset so you can become more rational, suggests Abby Schultz, a money mindset and business creation coach. As she puts it, debt itself is neither inherently good nor bad — it is what it is, and it must be paid. Slow and steady really will win the race.
“Understand you can’t go back and change the past, so decide to stop beating yourself up for a decision you made in the past that you can’t change,” she continues. “The only way to move through the outcome of past decisions is to do the best with the options you have now.”
Make a plan
Want to know one of the best ways to feel better about your financial hangup, whatever it may be? Know how to solve it! Whether it’s a bad spending habit, or trying to stay above water when your income is limited, making even the tiniest of baby steps will help you learn how to forgive yourself, says Lauren Silbert, vice president of The Balance. “Starting small can feel pointless, but it’s how you build healthy habits, willpower and financial fluency,” she adds.
Come up with a tactical game plan that you can follow over time. If you overspend, try to moderate yourself for the next few months in order to pay off the debt you incurred or build up your savings again, recommends Chelsea Kim, head of operations at BELLA.
“If you put debt on a credit card, look for balance transfer offers to reduce the monthly interest charges. Carrying high amounts on a high-interest credit card is a lose-lose situation. Pay the one-time 3%-5% fee, and use those 12-16 months to pay off the higher dollar amounts,” she suggests.
Give yourself the same compassion you’d give to others
Give yourself grace even if you have made financial mistakes. We are often our own worst critics, so it can be helpful to consider what type of compassion you would give a friend or family member in the same situation, says Dr. Thomas. “Stop condemning yourself and do something productive with what has happened. It’s important to recognize that you are human and that everyone makes mistakes, and that what really matters is that you can change if you want to and put the effort in,” she explains.
If you’re struggling to shift your mindset and make changes, there’s no shame in hiring a financial advisor to guide you through best practices. Or, if you can’t seem to break through unhealthy patterns, Dr. Thomas says a therapist can be beneficial, too.
The bottom line: You have brighter days ahead as long as you choose to let in happiness and success. You got this.
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