Learning Your Lesson from Past Financial Mistakes
When you were in school, you were probably told all the time that you would never stop learning. While that statement is probably true throughout your life, it is certainly true regarding your financial matters. Learning to deal with personal finance is an ongoing process that continues as your life circumstances change.
Aside from learning to deal with new aspects of your financial life, part of learning to handle your finances is coming to terms with your financial mistakes. You need to take time out to evaluate which budgeting and spending techniques are working for you, which ones aren’t, and what you’re going to do next. Every six months or so, you may want to mull over items like these:
If you could take back one financial move you’ve made lately, which move would it be? Maybe you’re suffering from buyer’s remorse about a sewing machine you purchased. Or maybe you’ve invested money into a mutual fund that isn’t performing the way you’d like it to perform. Identifying your mistakes is the first step to learning from them.
Why do you regret that move? Are you upset about the sewing machine because you didn’t get the product you thought you were buying? Were you hoping for a higher return on that mutual fund? Understanding why a specific move was a mistake can help you avoid making the same mistake again.
How can you fix your mistake? If you made a purchase that disappoints you, perhaps you should resolve to spend more time researching your next major purchase. If your investments don’t work out the way you thought they would, you may want to seek out more advice before you make your next investment. There’s no point to feeling miserable over something that’s already happened. Once you’ve made a mistake, you can only do your best to counteract it and move on.
The most important thing you can do when evaluating your past financial mistakes is to avoid beating yourself up. You are going to make some mistakes along your financial path. Don’t forget, however, that as long as you keep working to improve your handle on your money matters, you can continue to be proud of yourself and your hard work.
If I could take back one financial move I’ve made, it would be trading in my paid off two door almost new Ford Escort for a several years old Jeep Cherokee with lots of miles and problems at a high interest rate, *just because I fell in love with it*. Man that was stupid.
It was also indicative of my general problem of not thinking the costs through, nor analyzing the purchase, but instead just jumping in. That car purchase was 15 years ago and I still regret it.
I bought a big screen tv that was way to big for our apartment. I had to have it, and it was fun, but at a huge price. We recently donated that tv and I still think about how much it cost.
[...] Made of Money asks what your stupidest financial move was. I know what mine was, check out the post’s comments to find out [...]
I would never have co-signed with my adult child to buy a house. We never had to pay a payment, but the pressure was always there thinking that we might have to. Due to changing life circumstances, we had to sell the house recently in this horrid market. We sold it at a huge loss and thereby saved our credit rating, but the money we lost is still gone. Moral of the story: never co-sign for for anything. Period.