How to Learn from Your Money Mistakes

I have, in fact, made numerous money mistakes in my life. However, I try not to make the same money mistake more than once, and do my best to learn from my mistakes so that I don’t end up in worse trouble down the road.

But, in order to avoid repeating history, you need to make the effort to learn from your money mistakes. Here’s how to learn from your financial mistakes:

Be Open to Admitting You’re Wrong

The first step is to be open to the fact that you were wrong. You need to be able to admit that you have made a mistake, and that you need to fix it.

And you need to be willing to see that you, specifically, were wrong, and that you can’t just chalk it all up to bad luck, or circumstances, or something else. The reality is that, even though there are outside forces that can impact your situation, you still need to be willing to admit that you were wrong.

Until you can see that you were wrong, and that you made a mistake with your money — regardless of other things that happened outside your control — you will never be in a position to really change. You have to be open to admitting that you were wrong in order to take control of your financial situation and move forward.

Figure Out What You Should Have Done Differently

Next, determine what you should have done differently. Look at your financial situation, and your decisions, and think about how you could have done things differently. Pinpoint where you went wrong, and decide what should have been done differently.

When I look back at the way I did things as a college student, I can see that I did all sorts of things wrong, and I can see now what I should have done instead. Going forward, I have taken that knowledge and largely fixed most of those earlier mistakes.

Part of deciding what to differently might mean getting help from someone. A financial advisor, your parents, or a particularly successful and savvy friend, can help you figure out what you did wrong, and help you decide how you can improve going forward.

Change Your Financial Choices

Now that you have determined what went wrong, and how you could do it differently, it’s time to change your financial choices. Follow up on the information you have learned, and use it to build a more successful future moving forward.

There are a lot of financial choices we make throughout life. And we are all going to make mistakes. I probably still have plenty of money mistakes to make going forward; I know that I don’t understand everything that I probably should.

But the mistakes are fewer and come less often. And they are less devastating over time. The only real mistakes that you can make with your finances is refusing to learn from the past, and not using that information you have to move financially forward.