Millennial Money: How to learn from, not live in, a mistake
"I feel like such an idiot." It's something I've said more than once as I crumble in the face of a money mistake.
I recently called myself the I-word as I revealed to my husband that I hadn't checked my cash flow in a few months or contributed to my Roth IRA for 2019, even though he assumed I had.
But calling myself a mean name didn't fix anything. Facing the problem head-on was far more productive. Here's how experts recommend recovering from money mistakes without being a jerk to yourself.
DO: FORGIVE YOURSELF
Whether it's in relationships, careers, money or whatever, everybody messes up sometimes, says Jill Schlesinger, certified financial planner, author of "The Dumb Things Smart People Do with Their Money" and host of the "Jill on Money" podcast. She recalls early in her career when she tried -- unsuccessfully -- to time the stock market.
Aim for some perspective. "It's not like you made a mistake and somebody died," she says. "You can forgive yourself. It's really OK."
That means no name-calling, which is both unfair and unproductive. Calling myself an idiot, for example, is a cop-out. No need to consider what went wrong or how to do better next time -- I'm just an idiot!
That kind of language usually "shuts down the process of reflection pretty quickly," says Ed Coambs, certified financial planner and marriage counselor who specializes in financial therapy. More on reflection later.
DON'T: IGNORE PROBLEMS
Beating yourself up can make it easy to ignore problems. Who wants to deal with something that makes them feel stupid? But those problems tend to compound, Coambs says. For example, a few missed bill payments can trigger late fees, debt, collections, damaged credit and so on.
Coambs says shame about unaddressed money mistakes can also lead some to secrecy and hiding problems from others. At a certain point, "it becomes lying," he says.
DO: REFLECT ON THE MISTAKE
OK, Schlesinger admits, it's not easy to examine our mistakes. "Who among us wants to look at our foibles?" she asks.
But it's a lot easier to do so when you practice empathy and self-forgiveness, Coambs points out. This approach helps you look at why the mistake may have happened and how to solve it.
"When we reframe it as, 'I'm a human; I can make mistakes and recover,' it leaves us open to exploring new options," he says. It also gives us "a richer insight into what may seem like pretty simple money mistakes," he adds.
After I took a breather and my husband reassured me I'm not an idiot, I thought about why I avoided checking my cash flow and didn't contribute to my Roth IRA. We talked it out and came up with a few solutions, like regular money check-ins. I was hurting my own feelings. Once I stopped doing that, the reflection and problem-solving was pretty painless.
And, as it sometimes happens, reflection revealed that my mistake wasn't catastrophic. "Even small failures can get blown out of proportion," Coambs says. My husband pointed out that we have until Tax Day -- which is July 15 this year -- to contribute to my 2019 IRA. So we set up automatic payments and made other simple moves to help us max it out by then.
I'd be remiss in telling this money story without pointing out how helpful it was to have my husband as an ally. (Not only did he troubleshoot, but he also made no comment when I couldn't remember the login information for any of my financial institutions.)
Coambs says a nonjudgmental friend or partner is invaluable when managing financial mistakes. "If you were able to have that person in your life, that would provide a lot of psychological relief and a positive experience," he says.
DON'T: GET TRAPPED
If you're like me and ridicule yourself for forgivable missteps, take your reflection beyond the money mistake. "Are (you) trapped in shame-inducing thought, self-criticism and self-contempt?" Coambs asks.
Take note of times when you're mean to yourself and what that language sounds like, then remember that it's not healthy or helpful. "Many of us are so used to beating ourselves up that we don't know that we're doing it anymore," Coambs says. You may also want to ask why you're being so harsh.
Whether you're working on being kinder to yourself, handling money better, or both, remember that it takes practice.
"Developing a healthy relationship with money is an ongoing process," Coambs says. "Let this be a progressive journey."
This column was provided to The Associated Press by the personal finance website NerdWallet. Laura McMullen is a writer at NerdWallet. Email: email@example.com. Twitter: @lauramcmullen.