No one is perfect. This is true with every aspect of life, especially money. We all make mistakes with our money. Ideally, we should be learning from those mistakes so they never happen again! I believe there is no money mistake that someone can’t bounce back from. If you find yourself in any of the positions identified below, start the process of turning your situation around. Check out 5 money mishaps to bounce back from with grace!
Money mishaps to bounce back from
#1 – Getting into credit card debt
According to debt.org, the average household with a credit card carries $8,284 in credit card debt. The organization also shares that 189 million Americans have credit cards. What does this mean? That a huge chunk of the population has credit card debt!
You are not alone if you have credit card debt. The question to ask now is how are you going to get out of credit card debt? There are plenty of debt repayment strategies and programs. I would suggest you start with looking at your budget.
Based on your income and expenses, can you afford to put more towards you credit card debt to pay it off faster? If so, start there! If not, find ways to reduce your expenses and bring in more money. If your current income can’t cover your living expenses, you’ll never be able to break free of debt.
#2 – Blowing your entire savings
I use the term “blowing” loosely. Whether you blow your entire savings on something you shouldn’t have, or if it was an emergency, you’re still in the same boat…you don’t have a savings anymore. Your next mission is to build it back up. Hopefully, if you had to use your savings for whatever purchase/expense you needed it for, you didn’t use credit cards. Sometimes, you just have to find the silver lining!
How long did it take you save the amount you spent? Based on your income/expense situation now, how long should it take you re-save that same amount? When you know the answers to those questions, you can give yourself a realistic timeframe to build your savings back up.
A realistic timeframe is an absolute necessity for any goal, but now it’s up to you to achieve that goal faster! Challenge yourself to find ways to save more money, or make more money that can go straight to savings. Remember, you didn’t save that money overnight. So, don’t expect to do so again.
#3 – Loaning an unreliable friend money
Loaning an unreliable friend or family member money is a such a hard, but valuable lesson to learn. Loaning money in general shows you who is reliable and who isn’t. Unfortunately, if someone needs to borrow money, stipulations should be set ahead of time. Check out The Do’s and Don’ts of Loaning Money.
Assuming no stipulations are set and getting your money back is nothing short of impossible, you’ll have to determine the best way to move forward. Do you count that money as a loss and forget about it? Do you cut off the relationship until the money is paid back? Do you keep hounding the person you loaned the money to?
None of those scenarios is a win, but what feels the best to you? Some things just aren’t worth it, and calling it a loss (and learning that you’ll never loan that person money again) is the best way to go. The best bounce back from this type of money mishap is the knowledge you learn from it.
#4 – Making a large purchase you can’t afford
PSA – If you can’t afford something, don’t buy it! If you need to spend money you don’t currently have to purchase something, you need to wait until you have the money.
Now that I got that off my chest, let’s assume you made the money mishap of buying something (a large, expensive something at that) you can’t afford. First question to ask is can you return it and get your money back? When you have the option to return something for a full refund, take it! I know you wanted that purchase, but it’s not worth spending money you don’t have.
When you’re in the situation where you can’t return the item, the question to ask is how do you pay yourself (or your credit card) back as soon as possible? The money likely came from savings or a credit card, so you need to make rebuilding your savings or paying your credit card off your top priority.
#5 – Spending money that needs to be paid back quickly
There are a few scenarios I can think of off the top of my head where you may come into some extra money, you spend it, and then you need to pay it back. An example of this is taking a loan out from your 401k and then leaving your job. You have up to 90 days to pay the money back or be hit with taxes and fees.
Another scenario could be you are awarded a bonus at work, but if you leave the company within a certain period of time after receiving the bonus, you have to pay all or a portion of it back. Regardless of the scenario, if you’re in a position where you need to pay money back quickly, you need to evaluate all of your options.
Do you have the money in savings? If so, that’s your best bet. If not, your other options may include using credit (please avoid if possible), asking your parents for assistance (not as bad as using credit cards), or hustling your tail off to make the money back.
Be realistic with what you can truly do. Maybe you work your tail off, take some from savings, and borrow the rest from family. The earlier you start planning and taking action, the better of you will be when you need to return the money.
Related: 7 Bad Habits Making You Broke
The good thing about the money mishaps listed above is that anyone can bounce back from them! It may not happen as quickly as you’d like, but it can and will happen. Are you guilty of the money mishaps listed above? If so, how did you bounce back from them? Post a comment below to share!
The CGS Team