Ditch This Phrase and Jump-Start Your Financial Plan

Moving on after financial mistakes is tough when you’re stuck in “I should have” mode. I should have started saving for retirement sooner. I should have cut up my credit cards years ago. I should have said no to my brother-in-law’s dumb investment idea.

Acknowledging mistakes is one thing, but ruminating keeps you mired in mental muck.

And as long as you stay stuck, “you’re going to keep repeating those mistakes,” says Therese Nicklas, a certified financial planner and owner of The Wealth Coach for Women in Rockland, Massachusetts.

If your money mantra is an endless loop of “I should have” (or “I shouldn’t have”), then it’s time to shift to what you can do now. Here’s how:

Face the money mistake and assess what led to it

“Some people think, ‘If I ignore it, it’ll just work itself out,'” says David Clarken, a certified financial planner and owner of FWI Wealth Management in Atlanta. “It’s important to know what you did and how you got there.”

He recalls his own time of reckoning some 20 years ago. He was spending more than he earned in his first job out of college as a staff accountant. The overspending eventually led to using balance transfer credit cards to make minimum payments on other credit cards. Each time, he’d tell himself, “You’re an idiot.”

But the pattern didn’t stop until he created a spreadsheet and faced the bottom line: He had $10,000 in credit card debt. He realized he had been spending at the level he expected to make after getting promoted. Once he faced the stark numbers and understood the problem, he cut spending and steadily paid off the debt.

Take responsibility without beating yourself up

It’s OK to feel remorse, Nicklas says. But don’t take a guilt trip.

“Guilt is like a pity party. You feel bad, but you are not moving forward,” she says. “You’re just deliberating over the thing you did wrong and not hitting the pause button and identifying, ‘What can I do better?’”

Statements like “I’m just lousy with money” become excuses to repeat mistakes, she says. Instead, she says, ask yourself, “How is this going to benefit me going forward?”

She recalls clients — a couple who owned a small business — who spent months regretting a decision to spend $3,000 on an unsatisfactory sales training program. They couldn’t get their money back because of fine print in the contract. The lost money was a distraction until they planned how they’d carefully evaluate training programs before buying them.

Forgive yourself

What’s done is done, but “people get stuck in a cycle of shame and negative self-talk,” says Jamie Lynn Byram, an accredited financial counselor and owner of Peace Within Financial Counseling in Suwanee, Georgia. One of her clients who came for help with his wife was so ashamed that he showed up at the appointment with a bag over his head.

She tells clients: “You’re not where you want to be now, but you are taking the steps to get to where you want to be.”

When clients are troubled by financial mistakes, Clarken has them write down the errors, and after assessing what led to them, burn the pieces of paper.

Ask for help if you need it

Telling someone can help, but this is not news to share with an overly critical mother or a gossipy friend. “Be careful about who you choose to go to,” says Linda Leitz, a certified financial planner and co-owner of Peace of Mind Financial Planning Inc. in Colorado Springs, Colorado. “What you don’t want is to get in front of people who will beat you up for it.”

Stick to people you trust, like Clarken did by talking with his family members about his credit card debt. Among them was his grandfather, who he knew would support his efforts to pay off the debt and hold him accountable.

Emotional support from friends and family is important, but turn to professionals if you need help fixing the mistake. Perhaps you bought a financial product that wasn’t right for you, such as an annuity or a whole-life insurance policy you didn't need. Or you can’t control your spending. Or you’re too overwhelmed to create a financial plan.

To get an unbiased opinion, choose a financial advisor who doesn’t earn commission on financial product sales. See these 10 questions to ask a financial advisor to help you find the right match.

If the mistake is a pattern with deep roots, consider talking to a therapist or financial counselor.

You can find accredited financial counselors through the Association for Financial Counseling and Planning Education and financial therapists through the Financial Therapy Association’s member directory.

Move on

Once you’ve acknowledged the mistake, assessed how it happened and forgiven yourself, it’s time to let go of the past. Focus on setting goals and creating a plan to achieve them. Make a commitment to what you will do, rather than just thinking about what you should do.

As you move forward, acknowledge each positive step, however small. Simply telling yourself “good job” or getting a high-five from a trusted friend can do wonders.