Three Steps to Moving Past Financial Mistakes

Everyone makes mistakes sometimes (see my post yesterday), and mistakes will happen in your financial life.  It is unpleasant, often expensive, and most of all, utterly inevitable.  Here's the important part:  looking at them, seeing what you need to learn or change, and then letting it go far, far away, never to haunt you again.

What do I mean?  Surely there has been some time in your life where you've messed up with your money.  Whether it is the medical bill you had to pay because you didn't get it properly cleared through Tricare first, or the late payment fee on your credit card, or the snazzy new car you paid too much for, mistakes happen, even to really amazingly savvy people.  Of course, no one wants to make these kind of mistakes and we're all striving to avoid them (as we should) but there is a strategy for learning without obsessing or beating yourself up unnecessarily.

First, look objectively at what happened.  What could you have done differently to prevent it?  (Disregard the actions of anyone or anything else – just analyze your own behavior.)

Second, see how you could change your financial systems to prevent this from happening again.  If necessary, set up overdraft protection, find a better filing system, or do whatever else you need to do to make it hard to make the same mistake in the future.

Third, move on!  This is hard for me (I'm still stewing over a medical bill from several years ago, one that could have been prevented if I'd followed Tricare's rules in the first place).  Time helps, but you can also try more active techniques such as writing it down and ripping it up.  It also helps to remember the times that surprise money has fallen into your life – assuming your financial mishaps aren't a regular occurrence, they're probably being pretty balanced out by the windfalls.

Just knowing that no one manages money perfectly should help you feel less guilty when things go awry.  If you can look at the expense as tuition in an educational experience, and use your knowledge in the future, it should lessen the blow a little and let you move on.

About the Author

Kate Horrell
Kate Horrell is a military financial coach, mom of four teens, and Navy spouse. She has a background in taxes and mortgage banking, and a trove of experience helping other military families with their money. Follow her on twitter @realKateHorrell.
  • Bill

    What about those of us who had perfect credit for many, many years, did everything right and still got screwed over during the current financial meltdown? Are we to be chastized for making mistakes that are really responsible, normal financial safeguards that no longer apply?
    What about the money owed to me from the big banks and Wall Street that caused the meltdown? How come they get way with murder and I have to pay them twice? No f…..g way will I do that.

  • Patti

    I am buried in debt. Have read every “get out of debt” book in the bookstore. Every time I begin to dig out (pay down balances) something adverse happens and I’m broke again. No debt management option because the minimum payment to them is more than I’m payin right now. This situation happened because I got cancer and lost income, we ran the cards up on living expenses. Short of a windfall, I feel helpless against this mountain of debt. Suggestions are welcome if anyone can give me “doable” things! Thanks

  • Seasamh

    Patti: Consider bankruptcy. It’s not a pleasant thought, but if (1) you could pay your regular expenses, if you could just get rid of the old accumulation of debt, (2) you meet the “means test” (meaning that you don’t have sufficient income to be forced into a repayment plan), (3) you don’t have significant assets that would be lost in bankruptcy, and (4) your debt is largely dischargeable (i.e. not taxes or student loans), a Chapter 7 bankruptcy would allow you to get back on your feet. You could either talk to a bankruptcy lawyer (many will give you a “free consultation” to see if you qualify) or go to a credit counseling agency that is authorized to give the credit counseling necessary before you file (they can probably tell you whether you would pass the “means test” or not). Bankruptcy gets a bad rep in the press these days, but your situation is exactly what it exists for. Good luck!