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*:
Accumulating debt from spending too much
Freeze your spending
Make a plan for reducing your debt
Use our financial health toolkit to help you get back on track
Gradually increase your contribution by a percentage or two every year
Not keeping track of your money
Download our Banking App and use our add-ons to maintain, manage and move your money efficiently and effectively
*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.
Even if you've made one of the worst money mistakes, a smart first step is to simply acknowledge your misstep, take a step back, and at first do nothing. A rash attempt to fix a problem can actually make it worse. Once you've accepted and assessed the damage, you can put a recovery plan into action.
Not saving for retirement early enough has been the No. 1 regret among Americans for six out of the seven years Bankrate has asked about financial regrets. The one exception is in 2021, when not saving enough for emergency expenses was the No. 1 regret.
Stress testing your financial plan and getting a second opinion from a financial professional can help mitigate fears of exhausting your nest egg. If you are confident in the security of your own financial plan, how much you spend for the rest of your life is up to you—including how much you spend on yourself.
Introduction: My name is Patricia Veum II, I am a vast, combative, smiling, famous, inexpensive, zealous, sparkling person who loves writing and wants to share my knowledge and understanding with you.
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