7 Tips to Bounce Back from Financial Mistakes
Very few people breeze through life without making some financial mistakes. Whether it’s getting behind on bills, getting talked into a bad investment, loaning money to a friend or family member who fails to pay it back, or any other money mishap, it can stop you from working toward your financial goals. Fortunately, though, it doesn’t have to. Take these steps to get on track and bounce back after making a financial mistake:
Don’t Dwell on It—It’s tempting to think about what you should have done differently or wish you could turn back time, but doing so won’t change anything. Instead of dwelling on what went wrong, make a plan to move forward and resolve to avoid future mistakes.
Take Stock of Your Situation—A financial mistake can make it feel like you’ll never be back on solid ground. That’s why it’s important to fully assess your current financial situation; it might not be as bad as you think. And if it is, you’ll need a plan to regain your footing. Our free online financial assessment can help you gain a clear picture of where you stand.
Get Back to Basics—Once you have a clear understanding of your current finances, work out a budget to ensure you can cover all your basic needs, including housing, food, utility bills and transportation. Our Living Expenses Calculator will help you break down the basics.
Freeze Your Spending—Until you get back on your feet, cut out any extras you don’t absolutely need, such as eating out, subscribing to multiple streaming services or recreational travel. It might seem like a bummer, but it’s only temporary until you are financially stable again. And in the meantime, you might just find you prefer saving money to spending it.
Don’t Be Tempted by Quick Fixes—When it comes to money matters, there’s no such thing as an easy fix. Car title loans, “instant” credit repair, or other fix-it-fast schemes aren’t the answer. In fact, they could leave you in even more financial trouble. If you’d like expert help, credit counseling is a free, confidential option.
Take Care of Your Health—Financial stress can take a toll on your physical and mental health. Be sure you are taking care of yourself by eating healthy foods, staying hydrated, getting moderate exercise and enough sleep. When you’re feeling worried or anxious, reach out to a trusted friend or family members for support.
Start Preparing for Emergencies—After the initial crisis passes, it’s time to start planning for the future. Open and work toward fully funding an emergency savings account, set up as many bills as possible on auto-pay (so you can avoid late payments and fees), and regularly review and modify your budget as needed.
It never feels good to make a mistake with money, but it doesn’t have to be the start of a downward spiral. Acknowledge the mistake, work on fixing the damage, and start planning for how you’ll handle things differently in the future.