Money Psychology

How to Love Yourself Again After a Financial Mistake - Money Psychology

February 8, 2023

Is it too early to ask you what your relationship with your money is like?

Now, if you keep wanting to dig yourself a hole and bury your head in it when you think about financial mistakes you've made, then this piece is for you.

Financial health is important and it matters for everyone interested in improving their lot. This means working towards financial “sainthood” by falling down and then keeping rising. Again and again.

If you are in a complicated situationship with your money, it's vital for you to know that you're not alone especially if shame, remorse, or resentment surface when you check into your finances.

Note: Defensive reactions to regret include: attacking oneself (I was so stupid to fall for that scam.), attacking others (if only my boss had understood the full scope of the project.), avoiding (I'm going to drink, party, and forget I blew that emergency loan.), or withdrawing (Let me sleep in all week and forget about it).

However, feeling sorry for yourself should not be a lifelong plan since it won't help with achieving one’s financial objectives.

What Causes Regret After Making a Financial Mistake?

Typically, financial mistakes are a result of not sticking to a plan, or a budget, which can only be remedied when people begin to consider the future and what is financially feasible for them.

In addition, it could be that you stuck to a plan that did not work e.g. you had an investment plan that backfired after the company you invested with collapsed or is unable to pay dividends on your investment or refund your money. This could be a source of regret for some.

Also, by focusing on the short-term rather than the long-term when making financial decisions, people end up with some financial challenges that hamper their financial stability.

While psychologists do not consider regret as a core human emotion, they instead identify it as a combination of two or more primary emotions. Of these, the most dominant primary emotions associated with regret are sadness and shame. This combination can create a mood that makes it harder to rid ourselves of thoughts associated with feeling regret.

Investment plans have gone bust in Kenya sinking people’s lifetime investments which many end up regretting. There are land investments, money markets, and other plans that have not worked out well leaving many regrets.

According to Shai Davidai, a psychology professor, the key to making the most of your regrets is to avoid suppressing them or maintaining a false sense of "no regrets."

In a co-authored study with Cornell psychologist Tom Gilovich, Davidai notes that some regrets could help create remarkable persistence capacity. These regrets that create persistence are those that are preventable and not those stemming from doing something wrong that was unavoidable.

Making mistakes in life is common and sometimes it is the only way for us to learn the best way to become the best versions of ourselves. Also, we are mere mortals!

7 Healthy Steps to Take After A Financial Mistake

We all make or have made financial mistakes, which sometimes makes us feel horrible.

Do you find it difficult to be harsh with yourself after making a financial error? Do you frequently second-guess your actions or inactions? Do you find yourself going around in circles and wishing you had handled things differently?

Here are some steps you can take to move forward after making a financial mistake and then loving yourself again:

1. Acknowledging the Mistake

It can be challenging to comprehend why, for example, discussing your financial history may make you feel down or why some basics like back-to-school shopping may cause you intense anxiety. Even so, strive to acknowledge whatever mistake that could be creating this unease.

By making an effort to pinpoint the emotion or reaction, you might be able to comprehend its root reasons and become better equipped to handle the difficulty at hand.

You must recognise and acknowledge any financial mistakes you may have made in order to move forward. If the error was actually your fault, be sure to accept responsibility for it. Doing this means that you cannot blame the fantastic online deals and assume no liability for the financial mistake. Take this opportunity to, in a sense, assess the harm so you can draw lessons from it.

2. Discussing the Mistake

Consider discussing your financial mistake with someone else since it's crucial to your healing. You can discuss this with a financial expert, a money mentors counsellor, or a loved one. These people should be able to offer you a clearer viewpoint by taking a different angle.

Although this step might seem intimidating, it will definitely help with relieving some pressure.

3. It’s Time to Focus on the Present

Having acknowledged and discussed what went wrong, it is now time to focus on how to improve yourself starting now. Do not dwell in the past too long and don’t let the mistakes of days gone by hold you, hostage.

Consider creating a strategy towards avoiding repeating the same mistake again in the future. Do this now so that moving forward you can take assured steps in remedying your financials.

4. Keep Digging, Keep Learning

The internet is a treasure trove of information that may help you deal with the mistakes you have made by learning from people’s experiences and how they overcame the challenges.

You could study the success stories of those who, like you, have faced financial challenges and overcame them for more motivation. Additionally, you can seek in-person classes, credit counselling, and money coaching online or offline. Information is power so keep digging.

5. Be Compassionate as You Would be to Others

Since we are frequently our own worst critics, it can be beneficial to think about the level of sympathy you would show a friend or relative going through a similar circumstance.

Even if you have made financial mistakes, be kind to yourself. Stop berating yourself and use the situation to your advantage. It's crucial to understand that you are only human, that everyone makes errors, and that the most important thing is that you have the ability to change if you put in the necessary effort.

You could consider hiring a financial advisor to walk you through good financial practices is not shameful if you're finding it difficult to adjust your perspective and make changes.

6. Phew! It’s Time to Let Go!

Having done everything you can to help you learn from your past financial mistakes and work towards a brighter future, let go of the past. It is important to just let go. Let go of the guilt and give yourself some grace and love.

7. Make a Plan to Improve Yourself

Towards your healing, consider creating a plan of action to lessen the harm or better yet prepare you for the future. In case a financial mistake happens, you will have a reference point in your plan.

Your plan could contain what you must do going forward to maintain your alignment with your objectives, the adjustments you have to make right away to get you there, etc.

As always, remember that tiny, manageable steps are more likely to lead to goal achievement than huge, and difficult-to-manage leaps.

Again, always remember that humans are bound to make mistakes and so if it happens again, be gracious and kind to yourself.

Affirm Yourself By:

Reminding yourself that it’s not the end of the world. Out of this mistake, I will come out much stronger and wiser.
Understanding that your worth is not only defined by finances. Encourage yourself by saying you are more than your money.
Forgiving yourself just like you would forgive a loved one if they made the same mistake. Be kind to yourself. The world is not.

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Njenga has over 8 years experience in multimedia and business journalism both as a writer, editor and producer. He has over 5 years of experience in radio broadcasting as a news reader, reporter and presenter. He is also a 2012 Earth Journalism Network-EJN Fellow.