Too often, we feel as though a mistake means the end of everything when it comes to our finances. We think that making mistakes disqualifies us from financial success. The good news, though, is that financial mistakes don’t have to be forever. Once you get beyond the psychology issues that can hold you back when you make financial mistakes, there is a good chance that you can learn, move forward, and still achieve financial success.
Acknowledge the Reasons Behind Financial Mistakes
Your first step is to figure out the reasons behind your financial mistakes. If you have made mistakes, you need to recognize them — and what led to them. Some of the reasons that many of us end up in financial trouble include:
- Unwilling to make the sacrifices that allow us to live within our means and avoid debt.
- Spending without really thinking about why we are buying something.
- Unforeseen financial problems (like job loss or medical issues) that destroy savings.
- Unwilling to practice the discipline to save up for large purchases or save up for an emergency fund.
- Lack of marketable skills or education to increase earning power.
- Fear of investing (or other fears).
- Lack of cash flow awareness and control over your funds.
In some cases, your financial mistakes might arise from a combination of factors. The important thing is to be honest about the reasons that you are in trouble. Once you identify those reasons, you can make a plan to move forward.
Change Your Financial Habits
In order to overcome your financial mistakes, you need to be willing to change your financial habits. If you haven’t been thinking about your spending, and if your expenses don’t match up with your values and priorities, chances are that you will be unhappy with your finances, and that you will overrun your income. Once you recognize the problem, and you make an effort to stop spending on things that don’t really matter to you, there is a better chance that you can change your finances.
Starting small is an important part of changing your financial habits and overcoming past financial mistakes. For most of us, it’s not practical to assume that we will be able to pay off tens of thousands of dollars in debt in the course of a few months. You probably won’t be able to save up six months’ worth of emergency expenses in three months. Instead, you need to set realistic expectations for yourself. Start small by setting aside $25 a week. Once that is comfortable, bump it up to $35 a week. You can do the same with debt pay down, or any other financial goal. Small changes that are easy to make can be followed up by additional changes, and it will all eventually combine for your success.
A small start can also ensure that you stick with the changes you make to your finances. If you want to overcome your financial mistakes, you need to make lifestyle changes. You can’t just attack the symptoms of the problem; you also need to manage the actual cause.
Thinking about past mistakes will only prevent you from moving forward. Take the time to consider what’s really at the root of your financial problems, then move forward with the changes that will help you overcome. Financial mistakes don’t have to be forever.