Have a quick check: are you human? If you are, then there’s some encouraging – and slightly discouraging – news. Everyone makes mistakes. If you haven’t yet made one, then A. you’re a liar, and B. don’t worry, you’ll make one soon enough. Of all the mistakes to make, none are quite as familiar as financial mistakes. The majority of Americans are in debt, and while many of these people manage OK, some cause more severe problems. But it’s important to remember that the financial mistakes you made in the past don’t have to dictate your future. Here’s how.
Confronting the Mess
You won’t be able to move forward until you know where you are. As such, your first step will involve getting a clear overview of your financial landscape. Up until this point, you’ve probably been burying your head in the sand, hoping that everything will go away – but deep down, you know it won’t. Take the plunge and take a look at your incomings, outgoings, and other financial obligations. Don’t worry if it’s a complete mess: there are ways to move on from anything and everything. It’s the ‘taking a look’ that is often the hardest part!
Clearing the Debts
If you’ve got a mountain of debt, then that’s what you’ll want to tackle first. This will be the thing that holds you back from moving forward and the biggest psychological drain. No matter how much money you owe, remember that there are always ways to get out of the red and into the black. You might need to cut all of your luxuries and divert all your cash to paying down your debt, or speak with a chapter 13 bankruptcy lawyer, but, whatever you do, you’ll be on the right path towards financial freedom. Losing the stress of debt will be a big burden off your shoulders!
A New Monthly Budget
You didn’t get into financial difficulties completely by chance. You were simply spending more money than you were earning – it’s easily done. To prevent this from happening in the future, you’ll need to create a new monthly budget, one that you know is sustainable. If that means cutting out luxuries such as cable television or after work drinks at the weekend, then so be it – you’ll much prefer being in a financially sound position than the fleeting pleasures both of these things provide.
For the Future
If you want to be financially healthy in the future, then you’ll need a plan. Though retirement might be a long way off, it’s never too early to think about it – most people drastically underestimate how much they’ll need for retirement, and then, by the time they realize, it’s too late to do anything about it. Start early!
Finally, remember to go easy on yourself. It’s not the mistakes we make that defines who we are – it’s how we respond to those mistakes. You’ve already shown that you’re not going to let these mistakes keep you down, so don’t beat yourself up about them.