How to Recover from Poor Financial Decisions




When it comes to financial decisions like saving money and building wealth, you probably have a list of reasons why you haven't done certain things. You can probably also think of a long list of bad financial decisions you've made.


There is always room for improvement when it comes to money, regardless of the financial decisions you've made or whether your finances are in order right now or not. Learning from other people's financial mistakes might also provide an opportunity to grow!


Let's dive into the most common bad financial decisions and how to recover and start making better financial management decisions going forward!


Not Saving Any Monthly Income


Not putting money into your savings account each month often happens when you don't really have any concrete financial goals or think you have plenty of time to save in the future. But by doing this, you end up paying yourself last. This is definitely a bad financial decision.


One way to easily save is to establish the habit of creating and working with a monthly budget and making it a point to save at least 10% of your monthly income before you spend anything.


Consider automating your deposits to your savings account too - this will make sticking to your savings goals so much easier.


Living Large in your Youth


Your 20s are when you really become an independent adult. You graduate from college, you get your first big paycheck, and maybe you move out on your own. And now you can do things that you really couldn't do back when you really didn't make any money.


Not only that, but you also probably don’t have as many financial burdens as someone in their 30s or 40s. So it's easy to put savings on the back burner while you enjoy those glorious twenties. As a result, it’s not uncommon to make lots of financial mistakes.


Yes, you might be young and yes you might have time to save but nothing can replace lost time and the power of compounding so learn how to budget and prioritize your future financial well-being over your wants.


Your financial decision-making in your 20's has a huge impact on your future.


Making Large Unnecessary Purchases


Buying stuff you don't need leads to a lot of credit card debt. Small transactions, such as that great clothing bargain or eating out every day, may rapidly add up, and before you know it, you've racked up a sizable credit card balance.


Remind yourself that credit is debt, and the available balance on your credit card isn't real money to avoid this regret! You're borrowing money that you'll have to repay.


Buying stuff you don't need leads to a lot of credit card debt. Small transactions, such as that great clothing bargain or eating out every day, may rapidly add up, and before you know it, you've racked up a sizable credit card balance.


Remind yourself that credit is debt, and the available balance on your credit card isn't real money to avoid this regret! You're borrowing money that you'll have to repay.


Not Protecting your Personal Information


Identity theft and credit fraud are common in today's online world, and failing to take extra precautions to secure your personal and financial information can be a costly mistake.


Because there have been so many data breaches in recent years, scammers and hackers have easy access to a lot of our personal information, such as our address, date of birth, and other details.


Once you've put yourself up, protecting yourself is straightforward. It include keeping track of your credit reports, avoiding entering personal information on untrustworthy websites, and placing alerts or freezes on your credit cards and credit profile.

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