This post is by our regular contributor, Erin.
When’s the last time you experienced a financial fail? I’m willing to guess you’ve had at least one within the past year. Whether we like it or not, failure is a part of life. Everyone experiences a fail once in a while, especially when it comes to money.
That said, it’s critical to get back up after a financial fail. Moping around feeling sorry for yourself won’t do you any good. You can’t change what happened in the past, and staying down does more harm than good.
I’ve always maintained the most important part of failure is the learning experience that comes afterward. It’s okay to fail as long as you bounce back and learn what not to do next time.
Let’s take a look at why it’s important to get back up after a financial fail, and how you can do so productively.
Acting From a Place of Negativity is Harmful
Failing to meet a goal doesn’t feel good. You might be scared to give it another go because you don’t want to fail again. You might not believe in yourself anymore. Or you might double down on your efforts in a way that’s not sustainable to make up for a failure.
These are all the wrong mindsets to be in. Let’s illustrate this with an example.
Say you want to pay off your credit card debt. You vow to go on a cash-only diet. You commit to using the envelope budgeting system. You dedicate a certain amount of extra cash to put toward your bill each month.
Everything goes well for a few months, and then you slip up. You make the mistake of taking your credit card along with you on an unplanned shopping trip. You buy a few things you thought you needed. Your credit card balance goes up instead of down. You feel like an absolute failure.
You get so down in the dumps, you say “no” to every opportunity that comes your way to get together with friends and family. You tighten your budget in every category. You empty your emergency fund to pay more toward your bill to make up for it. You feel like you need to punish yourself for your failure.
Does that sound healthy? Of course not, but in the moment, you feel shame and regret. You want to do whatever you can to get “back on track.”
Completely depriving yourself of interaction with the outside world, tightening your purse strings so much you have no breathing room, and leaving yourself without a backup plan is not the best course of action to take.
Why? Depriving yourself is going to backfire eventually. You’re going to be emotionally taxed from cutting your expenses and saying “no” all the time. If an emergency does occur, you’re going to end up further in debt.
That’s a recipe for disaster. You might “get back up” temporarily, but you’ll end up being down again sooner or later.
So what is the best plan of action to take?
How to Get Back Up After a Financial Fail
When you think about it rationally, you’re probably aware that staying down about your mistakes doesn’t do you any good. But it can be hard to act from a place of positivity when you’re busy beating yourself up.
Here are a few productive steps you can take to recover from a financial failure.
Step 1: Forgive yourself. Trust me, I know it’s difficult. I tend to be a perfectionist, and I’m pretty hard on myself (when I shouldn’t be). However, I’ve learned that you need to be your own best friend. Treat yourself with the kindness you deserve, and forgive yourself for being human and making a mistake. The sooner you do, the sooner you can move on to acceptance.
Step 2: Stop dwelling on the past. I know “If only I had done this…” or “What if this had happened instead…” might be floating around in your head, but you have to stop thinking about what you could have done. Sadly, we don’t have time traveling machines. You need to move on and come back stronger. You can only do that once you accept the situation for what it is.
Step 3: Think things over. Once you’ve cleared your mind and can think about the situation positively, evaluate what went wrong so you can adjust your plan for next time. What caused you to go on that unplanned shopping trip? Do you need to cut up your credit card, or freeze it in a block of ice? Do you need to avoid going to the mall with friends who love to shop? Getting to the root cause of the issue will help you avoid that particular failure in the future.
Be Gentle
Seriously. I can be my own worst enemy when it comes to failure, but those negative thoughts are only going to eat away at your motivation and willpower. You can’t allow them to win, because that means defeat. You want to achieve your financial goals, right? Right! You can, so long as you have faith in yourself.
If you have a good financial foundation to work from, failures won’t impact you as badly. And, as a young adult, you have time to gain back any losses you experience. There’s no better time to fail and learn.
Life is too short to treat yourself badly. You have the power to change your thoughts, and being positive is much more productive than being negative. You can’t let failure hold you back from experiencing life, especially this early on. You can bounce back, but only if you let yourself.
___________
Learning to deal with failure in a positive manner is a life skill we all need to learn at one point or another. Staying upset at yourself for a financial fail isn’t going to solve any problems you’re dealing with. Forgive yourself, figure out what you need to change, and move on with a better plan.
What financial fails have you experienced lately? How did you overcome them? What’s the hardest part about dealing with failure?
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Great tips Erin! I think that forgiving yourself is so essential. We are all only human and are bound to make mistakes at some time or another. Realizing that perfection doesn’t exist (something I struggle with too) is key in moving forward after a financial fail!
Excellent tips Erin. The issue I’ve always dealt with is dwelling on what I’ve done – which I think is likely tied back to forgiving yourself somehow. I’ve moved to working to see what I did or how I can change the behavior so as to not repeat the mistake – the last thing you want is for it to go on unchecked and turn into future mistakes.
Excellent advice! I am definitely guilty of being too hard on myself.Sometimes it’s hard to brush yourself off and keep going after a financial fail. It’s so important to stay positive, learn from your mistakes, and keep working towards your goals.
I like to this think: perfection is freaking boring. :) That;s how I keep from getting too hard on myself when I make any kind of mistake. I think my biggest financial fail this year was buying a new iPhone when my old one got killed. I put it on my card because I did not have enough cash on hand to buy a new one. Huge mistake. Even though I waited and didn’t make an impulse decision, it still wasn’t the right one under the circumstances where my finances stood.
Sadly, I sometimes dwell on what I could have done better but I think the most important aspect is to learn from it and move forward.
I had a major failure in reaching my financial goals in July. I find that if I work hard and can’t achieve my goal for one reason or another, I take solace in knowing that I did what I could. I try to just move forward and work harder to achieve my next goal.
We recently took out a debt consolidation loan. At first it felt like a huge failure, because we finally finished paying off our FIRST debt consolidation loan last year. However, I’ve come to realize that it is a step in the right direction and I know we will do better this time. Sometimes you need to fail in order to change your ways. I know that we will suceed this time because our attitude about spending has dramatically evolved, and that’s the only way you can ever escape from debt (http://creatingmykaleidoscope.com/2015/08/07/why-you-will-never-be-free-from-debt/)
I think forgiveness is the step most people overlook when it comes to getting out of debt and it is one of the most critical steps. In fact, I feel it’s a huge indicator of how successful people will be. It’s easy to get stuck on the woulda, shoulda, couldas and to berate yourself, but those things keep you at best at neutral, instead of moving forward and taking action. As you said, learn from your mistakes and move on. We all make them. It’s up to us to decide whether it will be “our story” or merely a blip in our life.
Christina@EmbracingSimple Thanks! It really is. You can’t move forward 100% if you’re still thinking about past mistakes.
FrugalRules Exactly! That’s a much more productive way to do it. It’s hard to forgive yourself, but I think it’s better to be grateful you learned such a lesson. If you evaluate what went wrong, you’re much less likely to repeat it.
moderatemuse I think not being hard on yourself is something a lot of us struggle with, especially if you’re a blogger, as you put your mistakes and triumphs out there for everyone to see!
Beachbudget I like that! And you’re right. If everything in life were perfect, it would be pretty darn boring. No one would ever learn anything. I always struggle with technology because it’s so expensive, yet so necessary (if you work from home). I’m sure a lot of people would have made the same decision as you. No one likes being without a line of communication!
Mrs Crackin the Whip I think we all do – and it’s okay for a short period of time. What matters is moving on!
Ali_AnythingYouWant That’s great! I actually stopped setting strict goals for myself because I take the opposite approach. I hone in on my failures and can’t focus on the successes. It’s all about knowing what works for you!
Harmony@CreatingMyKaleidoscope “Sometimes you need to fail…” Yes, failure is definitely essential in growing and learning. It’s painful, but necessary. I completely agree on your attitude statement as well. Good luck!
ShannonRyan I think forgiveness is a huge factor, too. If you’re unable to move past your mistakes, it’s too easy to give into feeling hopeless and powerless about your situation. You need to stay away from that if you want to become debt free. It’s all about taking control of your finances, knowing (and trusting) that you can make better decisions in the future.
It also helps to review what it is that made you successful…..and what went wrong. If you can’t identify your mistake, and learn from it you’re doomed to repeat it.
Great post! I’m pretty hard on myself as well with financial failures. I think of each month as a new beginning though and try to set small goals and stay positive about improving some of my financial habits.
DebtChronicles Yep – that’s why I included that in step 3. Evaluating everything (successes and failures) can help you figure out what worked and what didn’t, making next time a bit easier!
Chonce I’m big on thinking of each month as a new beginning as well. Some months just don’t go as planned, and we need to learn to accept that while reviewing how everything went and figuring out how we can regroup.
Good advice. Sometimes it just takes time to get back after a financial fail especially if they are monumental. I’ve been there.
PFUtopia I think a lot of us have!
For me, I think the hardest part of failure is dealing with all those feelings that come with it- the regret, disappointment, frustration, etc. Lately, I’ve learned that allotting myself a short chunk of time to dwell on it helps, but then I try to invest the rest of my time and energy on working on an action plan to get back on track.
MakintheBacon That’s a good way to deal with it. I can definitely relate as I sometimes hold myself up to impossibly high standards, but I’m trying to let things roll off my shoulders a bit more and it’s been working.