4 Steps to Turn Around a Financial Failure
Have you recently failed with your finances? Maybe you got yourself into credit card debt or you took out a loan on a new car and no longer want the car.
Whatever your specific case may be, don’t let this one financial failure, or any previous financial failure, determine your financial future.
You can overcome financial failure.
(Photo Credit: markusspiske)
4 Steps To Overcoming Failure With Your Finances
I will walk you through the four steps you need to follow in order to overcome your failure and ensure that you never repeat the mistake again.
- Admit to Your Failure
The first thing you have to do is to admit to the failure. Without doing this, you will never overcome it. It might be hard to admit to the failure but you have to do it. The failure will not define you unless you allow it to. The first step in allowing failure to define you is to be scared of it and not take ownership of it. No matter how tough it is to admit, you must do it.
Trust me, I know that it is hard to admit. When I was in credit card debt, I had to admit that I was depressed. That was probably the hardest thing I ever did. But here I am 10 years later and I am on a solid path to financial freedom. Had I not admitted my issue, I would probably still be stuck in the financial mess I was back then.
- Determine Where Things Went Wrong
Once you admit that things went wrong, you need to understand where they went wrong. What caused you to overspend or end up failing with your finances? This will take some time to get to the root cause. In some cases, you might think it was one thing when in reality it was something entirely different.
For me, I went wrong when I gave up on my job search. I graduated college in 2001 during a recession. It was tough to find a job. After a few months with no leads, I felt sorry for myself and started to spend money I didn’t have. Looking back, I should have kept my head down and continued to look for a job.
Read More: 6 Job Search Tips for New College Grads
- Accept the Failure
Once you admit you failed and you know where things went wrong, it is time to forgive yourself. You made a mistake. We all do. We are all human after all. Even some of the wealthiest people have done some stupid things with their money. The key is to accept it and move on.
Don’t allow the mistake to determine how the rest of your financial life will play out. If I did that, I would be saddled with debt and be miserable. But I’m not because I accepted that I failed. That allowed me to grow as a person and learn from my mistake.
Read More: How to Improve Your Finances When You Don’t Know Where to Start
- Reset and Try Again
Once you learn from your mistake, you most likely won’t repeat it again. You can then begin to try again to reach your financial goals. Unfortunately, chances are you will fail again, but this time in another way. The key here is to again, not let it define you. You will have to go through the process again of overcoming failure with your finances.
For me, I ended up looking for a job again after giving up. I never did find a full time job. I ended up with a part time job for a few months. But I never gave up. I kept looking and eventually found a temporary job and then that lead to full time employment. Without that temp job, I probably would not have landed the full time position.
You may be thinking why bother if I am just going to fail again? The reason is because you grow each time you fail and learn from that mistake. This catapults you further ahead in life and you start making smarter choices more and more often. This will lead you to improve your finances over time.
Read More: 6 More Steps to Take Charge of Your Financial Future
If you want to improve your finances, your first step is overcoming failure with your finances. Once you work your way through this process, you will find that you grew as a person and can make better, and smarter money decisions. This doesn’t mean you will always make the right choice from here on out, but rather that you will begin to make the right choices more often.
Take the first step to improve your finances. I know it is scary to admit failure, but you will be glad you did when you see how it will help in the future.