It happens to all of us from time to time: we buy things on impulse. We borrow outside of our limits. We crave a lifestyle that our income can’t support. In today’s culture, financial illiteracy is a widespread issue. So the question is when you’ve made a financially irresponsible decision in your life, how do you deal with it?
I am going to give you a simple 3 step process to help you Fix your Financial Faux-Pas. As with any mistake, it’s important, to be honest with ourselves as to what we did wrong. That’s why the first step to Bouncing Back from a Big Time Budget Blunder is to reflect.
Asking questions like “What mistake did I make?” and “Why did I make that decision?” will help you get to the root issue and prevent it from happening again in the future.
The second step to help you Mend a Mega Monetary Mistake is to evaluate. Ask yourself, “Where do I go from here”? Sure, you might have to eat a slice of humble pie first, but if you bought something you can’t afford, you might consider selling it immediately to prevent further long-term consequences.
Maybe you took out way too many student loans pursuing a degree that makes you very little money out of college, or perhaps you have become dependent on your credit card when you don’t have the cash in your account to pay it off. Whatever the case may be, it’s now time to make a plan of attack.
There are two main ways to pay down damaging-debt: decreasing spending and increasing income. In order to decrease spending, you are going to want to evaluate your current spending and make cuts. Do you really need that subscription service? Can you brew coffee at home instead of spending $5 per day at your local coffee shop? Perhaps you could pack a lunch instead of going out to eat. You may also try shopping secondhand before buying something brand new.
Not only are there are countless ways to watch your spending every day, but there are also many ways to increase your income. The simplest way to do this would be to gather some items you have that you could part with. Larger items could be sold on online marketplaces, and smaller items could be sold at a garage sale. Obviously, however, there will come the point in time where you run out of things to sell.
That’s where other options become handy. You may not have considered this as a possibility, but you may need to take on a second job or side-hustle. Driving for a rideshare company is a great and easy way to make extra money on your own schedule. You could also consider pet-sitting or babysitting apps, or even picking up odd jobs doing yardwork or detailing cars. A more long-term option is to seek a higher-paying career by furthering your education.
Now that you have decided to reflect and evaluate, it’s time for the third step toward your Revenue Related Restitution: grow. It’s not the absence of mistakes that distinguishes successful people, but rather their ability to learn from them. For example, if you know that you have a hard time saying no to high-pressure salespeople, be sure to avoid situations where you might be tempted to make impulsive purchases.
Another way for you to grow is to make your money grow! Investing in a diversified portfolio of stocks, bonds, and mutual funds will cause your money to grow tremendously over time and is a great decision for your future finances. Remember, you can’t change the past, but you can always change your path.
Though we have all made financially irresponsible decisions in our lives, there are many great tools to recover and learn from them. Reflect, Evaluate, Grow is a Wonderful Way to Wake you from your Wage Woes and Whisk you into a Wealth of Wisdom. By following this simple three-step process, you will be on your way to not only recovering but thriving!
Author’s note: In recent years, I have invested a great deal of time in finding financial freedom. I made the drastic decision to change careers after two years as an elementary school teacher. My future career through Perry Technical Institute’s two-year Instrumentation program will dramatically improve my income mobility and allow me to break out of my financial struggles for life. Thank you for considering me for this scholarship!
Who doesn’t know Janie? She’s the one who takes our financial education mission a step further and stays in close contact with our partner Universities, platforms, and institutions. Her Marketing Studies allow her to approach every situation individually and find the greatest solutions.