Tips & Tricks

How to let go of past money mistakes

January 16, 2024

As someone who talks about personal finance a lot, I have yet to come across someone who han’t made a money mistake; be it getting into debt, emotion-driven spending or spending more than we’d like to admit on something which at the time was a “definite must have” but turned out not to be really.

One of the worst things we can do in these situations is fixate on the mistake and struggle to move forward. In the words of Elsa, let it go. Of course, some mistakes can have a bigger impact than others but letting go of past money mistakes can help you foster a better relationship with money going forward, and it’s crucial. Here are my tips on how…

Remember that your past doesn’t determine your future

You may have made a mistake or two in the past, but that doesn’t define who you are. Telling yourself that you’re bad with money isn’t a fact, it’s a thought you have had based on past experience. But if you continue to tell yourself that, it becomes a self-fulfilling prophecy and influencers your future. It might manifest itself in a reluctance to start improving your finances as thoughts of “What’s the point? I’m terrible with money anyway” or you might feel too scared to try because you think the only result for you is failure. As soon as we remember that we’re in control of our money and our future, and not the other way around, the game changes. 

Take time to reflect

Taking the time to understand why something happened can help to propel you forward and stop the same mistakes from happening again. This is always easier when you’re out of the thick of it and it should be an exercise to help you rather than an opportunity to berate yourself. To help with the reflection process, you might want to ask yourself:

  • How did I feel when I made these decisions?
  • Was there anything going on in my life at the time that may have had an effect at the time?
  • What would I do differently next time?
  • What did I learn from it? 
  • Is there a pattern?

In my experience, there's a strong appeal in spending money when life isn’t so rosy. Sometimes we want to seek out that dopamine hit in an attempt to feel something more positive than everything else we’re going through. Being aware of this has helped me to reduce the amount of emotional spending I do because I’m consciously aware of the pattern i tend to fall into. But I know that seeking out ways to make life easier has a longer-lasting effect on me than the rush of buying something new on the high street. 

Take practical steps to improve your financial narrative

Once you’ve identified why, now’s the time to take practical steps in moving forward. This will look different to everyone and it’ll depend on your situation, but it might include things like: 

  • chatting things through with a loved one
  • Setting new goals
  • Creating a plan on paying back debt

Regardless of the steps you want to take, my advice remains the same: be realistic with what you can achieve and break it down into bite-sized chunks. For example, setting a goal to pay off all your debt by next week probably isn’t sustainable. As a famous fable once taught, slow and steady wins the race. 

Remove the idea of perfection

Coming from a recovering perfectionist, I get it. We want to have the colour-coded budgeting spreadsheet and fancy systems in place before we can start. We might think we need an encylopaedia’s worth of knowledge before we begin. But if you’re waiting for the perfect moment, you’ll be waiting a long time. 

Instead, get to a level of knowledge that you’re comfortable with before you start making decisions, and know that you don’t have to have it mapped out from start to finish. For that added peace of mind, consider chatting to a reputable and trusted finance professional or money charity about it. 

Celebrate your wins

When was the last time you celebrated your money wins? Things won’t always go your way, and you might slip up from time to time. But making a point to celebrate your money successes is a good reminder that you can have a positive relationship with money.  Write a list and keep it somewhere easily accessible during those moments of self-doubt.

Now you’re ready to let go of your past money mistakes, we’d love to hear how you get on. Share your money wins with us over on Instagram at @incrediblehq and @howifundthis.