Question of the Week
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What’s the best way to recover from a big money mistake?
Everyone makes money mistakes. The first step is forgiving yourself.
Obsessing over the error doesn’t make it easier to move on, so if you can, try to avoid dwelling on what happened.
Instead, brainstorm ways to recover. Is it possible to undo the mistake? Could you return a regrettable purchase, for example? If the mistakes resulted in a big chunk of debt, then pick a strategy for paying it off.
Recovery plans should also include a savings component for increased financial stability.
There’s no one-size-fits-all approach for an emergency fund, but starting small and building over time can be successful. NerdWallet’s emergency fund calculator can help you set a target amount for yourself.
Most importantly, think about ways you can make more informed choices next time. Did the regrettable decision come about because of an unexpected spending temptation? Were friends overspending and you wanted to join in? Pinpointing the root cause can help you learn from your mistake.
Finally, set yourself up for success by mapping out how you would handle the situation the next time it comes up.