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Financial Forgiveness

Written by Neal Frankle - 4 Comments

Financial Forgiveness

You are probably harder on yourself than anyone else is.

You might still be blaming yourself (and feeling ashamed) for mistakes you made years ago. Here’s proof:

Do you tell yourself that you are stuck now because you made the “wrong” career choice 20 years ago? Do you feel rotten about the spending binge you went on 5 years ago – because you are still trying to pay off credit card debt? Your friends go on trips every summer, but you and your family stay home. Do you feel guilty about that?

If you throw stealth attacks at yourself every once in awhile in these (or other) ways, you’re still angry. If so, it’s costing you money, and it’s costing you life. Too expensive.

Even if you tell yourself that you’ve come to terms with the past, the truth might be quite different. The cost of holding on to financial shame is tremendous. It costs you peace of mind. It makes it hard to stay present and difficult to enjoy life. It also shuts you out of financial opportunities because nobody wants to work with a grouch. Take it from me… I know this first hand. If you are secretly angry at yourself, your feelings probably come out as attacks on others at times. That’s a pretty high price to pay.

How do you forgive yourself for past financial blunders?

1. Reality check

In my experience, the first step is to simply acknowledge the truth. You’re only human and you’ve made mistakes just like everybody else. Sometimes we tell ourselves that nobody else could have made the block-head moves we’ve made. And sometimes the people around us, the people we are closest to, join in. This makes that message louder and even more shameful. Our intellect tells us this isn’t true, but our hearts keep beating it into us.

I don’t know about you, but when I step into this emotional boxing ring, my opponent is the equivalent of Mohammed Ali (when he was in his prime). I don’t have a chance. So the first step is to step out of the ring by acknowledging the truth. Yes, you’ve made mistakes. And yes, humans often do. Mistakes have consequences. If you spent money you didn’t have, you have to dig yourself out of the debt ditch. But that doesn’t mean you’re an idiot or that you’re worthless. You’re allowed to spend a little time feeling bad about the past but not too much time.

2. Damage control

Your second step is to take a honest look at your situation. Determine what past behaviors resulted in poor outcomes only so that you can stop those behaviors.

If you’ve done exceptionally poorly at investing, ask yourself why? Do you invest emotionally? Do you follow your “gut” or “hot tips”?

If you’re in debt, was it because you ignored your budget? Do you track your spending? Do you rely on somebody else to do this for you?

You don’t have a college degree and you need a better job. Are you getting training? Are you looking around? Are you networking?

What exactly is the problem and what do you have to do differently in order to stop getting in deeper? There is an old saying that, in order to get yourself out of ditch, you have to first stop digging. You stop digging by starting to use a budget tracking program if you’re still in debt. Or if your problem is that you make terrible investments, talk to friends who are successful investors and ask for advice.

3. Loud and proud

The third step is to be loud (or at least proud) of what you have accomplished. When you take steps that you’re proud of, acknowledge yourself for doing so. You can be in debt, but that doesn’t mean you have to be miserable. Quite the contrary, you can be ecstatic and in complete love with yourself. Not because you’re on LSD, or because you’re ignoring the past and it’s consequences. You can totally dig yourself right now and let yourself off the hook because you aren’t ignoring the past. You forgive yourself and move forward as you take corrective action.

The trick, of course, is to take positive action every day. Work out a plan and break it down to daily action steps. Take those steps. As you do, focus on what you’re doing now… Not the past behaviors that got you into trouble.

The weight of the world will lift. You’ll be happier, healthier and wealthier. Give yourself the gift of forgiveness this holiday season. Can you think of any better holiday gift?

Published on November 18th, 2010 - 4 Comments
Filed under: Miscellany

About the author: is a Certified Financial Planner in Los Angeles whose goal is to help people improve their finances and find balance in life. He covers these topics at his personal blog Wealth Pilgrim.

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4 Responses to “Financial Forgiveness”

  1. 1
    John Says:

    This is something that I struggle with at times. Of course I’ve made mistakes. Some have cost me dearly. It can be hard to give yourself credit for your accomplishments if you never forget your failings. I have never been out of credit card debt since I finished college. For a long time I wanted to wipe it out completely before entertaining a house purchase.I would have been CC debt free about 9 months ago if I had not purchased a house. However, I got a great deal on my house, collected the first-time homebuyer credit, and I’m doing great right now. Sure, I still have that CC debt, but it’s not costing me anything and I’m earning interest on the cash I’ll use to pay it off.

    You can’t spend all day tooting your own horn, but it’s important to recognize and reward your accomplishments.

  2. 2
    Tom Shaw Says:

    Consumerism is a disease that is paid at retirement.

    No doubt that money has the power to make people sad and bitter or heavy and happy.

    renunciation and austerity of today is tomorrow’s wealth.
    In this era of my life I’m saving money and learning to invest and establish profitable businesses under supervision time. I am what is called diversification.

    Fear of money is as afraid of life itself. Because money is time and time is life.

    Planning a retreat is always an action of someone who did bad things financially. I suggest becoming a millionaire before 40, because after it you have to think about the retirement plan.
    Greetings.

    Tom

  3. 3
    HenryTalksMoney Says:

    A good rule of thumb is to always focus on where you’re going, not where you’ve been. Learn from your past, but all the wanting and wishing in the world can’t change it. Focus on moving forward and being positive. It’s really amazing how powerful positivity (without being unrealistic, of course) can be. It sounds corny, but it’s really true.

  4. 4
    John Says:

    @ Tom,

    I can’t tell if your being sarcastic or not. If not, your recipe is doomed to failure for most people. Most of us can’t be ultra-frugal and aggressive with earnings without giving up everything else in our lives. Why wait till 40 to start living? Also once you get to 40 with your million dollars, will you be able to relax, or have you set a precedent in your life which will make you unable to stop and smell the roses once in a while.

    I don’t advocate imprudent spending. As the OP stated, get a budget, know where you stand, and know the consequences of your spending habits. If you want to go on the cruise or buy the sporty car and your finances can handle it without great risk, why not.

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