We all make mistakes, and sometimes we make those mistakes with our bank accounts.
Some of these are small, like withdrawing cash from a non-network ATM and paying fees, but some are large, like defaulting on a loan.
I’ve made many, many financial mistakes. I borrowed too much for school, and then I spent a good portion of my student loans at Sephora. I spent everything I made and didn’t save a dime until I was 23. I’ve lost money in the stock market, and I’ve just lost money in general, like the time I lost my wallet with $80 tucked in its pockets. Oops.
As with any slip-up, financial mistakes often come with feelings of anger, guilt, embarrassment, and hopelessness. But you don’t have to beat yourself up forever. You—and your bank account!—can recover.
Own up to your mistakes
You can only ignore unopened bank statements for so long. Sooner or later, your overdraft or maxed out credit card will catch up with you. When you have the choice, it’s always better to take control by facing your demons rather then waiting for them to corner you. Grab a notebook or create a spreadsheet and outline all your debts and assets before you make a plan of attack. Knowing where you stand, particularly where you’ve gone wrong, is the first step to mending your money.
Put out the fires and change your ways
Some financial mistakes are more urgent than others. For example, credit card debt is more pressing and expensive than being behind on retirement contributions; ditto to unpaid parking tickets or any debt in collections. It will only be possible make a long-term financial plan if there’s nothing holding you back. Break up with your bad money habits—all of them, from living in overdraft to failing to open a savings account for retirement—and move on.
If you’ve defaulted on your loans, get back to regular payments and start repairing your credit. If you drained your savings to go to Mexico, start building that account back up. If you borrowed money from a friend or family member, make a plan to pay them back and start healing your relationship. Some mistakes might require extra work, like taking on a part-time job. It might not be pretty, but it’s only for a little while. Remember, time heals all wounds, even those we’ve inflicted on our bank accounts.
Don’t repeat your mistakes
One of the hardest things to do after you’ve sorted out your bills and budget is to not fall into our old destructive patterns. It’s easy for one missed payment to turn into two, or going just a little bit over budget to rapidly balloon to a lot over budget.
You’ll lose money until you learn your lessons. If you want to keep your cash, start by fixing your current financial mistakes, and only then look to the future.