How to Stop Dwelling On Past Money Mistakes

One of the most common pieces of insight all parents deliver is that nobody is perfect and everybody makes mistakes.

That’s true, and it also applies to money matters. While everyone would prefer to limit mistakes as much as possible, they do happen. The important thing is not to dwell on them and move on for the best chance at a positive financial future.

Here is a quick look at how to avoid dwelling on past mistakes you may have made with money so you can instead concentrate on moving forward.

Pay Your Credit Card Debt

It’s a common theme — you got yourself a credit card or two for “emergency” use, only for your balance to snowball over time. Now you’re dealing with hundreds or even thousands of dollars in debt, leaving you with that sinking feeling.

It’s not rocket science, but the way to get out of this quandary is to pay off your debt. The more you pay each month, the quicker your debt will dissolve. But even if you’re only able to pay the minimum each month, be sure to do at least that to avoid taking a hit to your credit score for late payments.

One thing that’s often overlooked is it can be better to not completely pay off the balance of each credit card. Keeping a constant balance between 10 and 20 percent of your limit ($100 to $200 on a credit limit of $1,000, for example) can actually improve your credit score because it shows you can maintain a balance while making payments on time.

This will result in a higher credit score than if you have three credit cards all with $0 balances.

Outsmart Yourself

It’s common knowledge that you should try to learn from your mistakes, but sometimes it’s not that easy for your brain to do so. In fact, there is scientific evidence that thinking about your past mistakes could lead you to repeat them down the road.

It helps to know that whether you make a good decision or a bad decision, your brain learns very little in the process either way. The key is to not see yourself as a failure because that can put you in a mindset to splurge.

It all sounds a bit abstract, but the takeaway is to not get down on yourself should you happen to make a mistake. Don’t look back, just look forward. Instead of worrying about the bad things that might happen should you make the same mistake again, focus on the positive that could come out of different choices you make.

Plan Your Work, Work Your Plan

In any aspect of life, financial or otherwise, a standard piece of advice is to come up with a plan that can help get you out of trouble.

Of course, coming up with the plan is only half the battle. The real challenge is executing the plan.

There are many strategies for personal financial planning, but a good place to start is thinking about the purpose and goals of your plan. That allows you to come up with strategies for how to achieve the ultimate aim.

In an ideal situation, you will stick to your plan through thick and thin, but you know that life doesn’t always work out that way. Be sure to include a bit of flexibility in your plan so you can adjust accordingly should issues arise.

This could be positive or negative. If your cash flow slows down, then you might need to revert to making some minimum payments. On the flip side, if you get an unexpected raise or bonus, you might invest in your own future by paying off your debt even quicker than originally planned.

Forgive Yourself

This goes back to the “everybody makes mistakes’ adage, and it can be much easier said than done. But it will be impossible to move on and get over your missteps unless you’re able to forgive yourself.

Think about if a close friend or family member is in a tight spot, and how willing you’d be to do anything that could help. Now take that same mentality and apply it to yourself. It’s often easier to reach out and help others, but it’s just as important not to feel bad about helping yourself.

Financial mistakes happen. You’ve made them before, and you’re likely to make them again. The important thing is to limit your mistakes as much as possible, and also not to get down should you find yourself in a tough spot.

Dwelling on past mistakes makes it more likely you’ll repeat them. Try to only look forward so you can give yourself the best chance at a bright financial future.