How to bounce back from financial mistakes
Everyone’s made financial decisions they regret, whether it’s buying something you know you can’t really afford, living on credit or not saving for retirement. Regardless of how big or small your financial misstep, there’s always room for improvement when it comes to money.
While you can’t change the past, here are ways to help you bounce back or avoid them in the future, with practical steps that can help you recover financially.
- Acknowledge the decision and move on
Financial failures and mistakes not only hurt your bank balance, but they can influence your confidence. However, you don’t have to beat yourself up about it; even the world’s wealthiest have made the same mistakes you have.
Recognising that you made a wrong decision and then committing to making it right or changing it are what will help move you forward. If you don’t admit that something went wrong, you can’t do better next time. - Know (the full extent of) the damage
So, you’ve made a bad investment, skipped a payment, damaged your credit. To fix the situation, you need to know the full impact and consequences of it. This involves taking a deep dive into your finances so you can see exactly where you need to make the change and what you’ll need to do it. - Change your mindset to change your situation
You can start changing your financial situation today. There’s never going to be a perfect time, so why wait? It’s also important to put an actionable and measurable financial plan in place because things don’t change themselves. If you want to revamp your finances, you need to take responsibility and start working on it. This includes the following:
- Reassessing your financial goals
- Deciding what you need to prioritise to either get you out of the situation or move you forward
- Asking yourself whether you can do this or if you just need professional help
- Find out what your options are
Depending on how severe the impact of your mistake is, there are various steps to take to correct the error or improve your situation, but don’t be tempted by quick fixes. Get the right advice and guidance from reputable professionals. - Take action and stay committed
Once you’ve got a plan, start implementing it, but be patient and remain disciplined on your journey as it might take some time to turn around.
Here are some actionable steps to recover from some common financial mistakes*:
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Accumulating debt from spending too much |
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Living beyond your means |
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Not having an emergency fund |
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Falling behind on retirement savings |
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Not keeping track of your money |
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*This information does not constitute financial, investment, tax, legal or other advice. Before making any decision or taking any action regarding your finances, speak to a qualified financial advisor.