If you have blown your budget, wound up in collections, bounced a check, took on debt that you cannot afford or made another major money mistake, you are in the same boat as a lot of Americans. It is very easy to make a simple mistake but more difficult to repair the damage afterward. In many cases, it takes time to fix the flub. However, there are ways that you can react to minimize the damage.
Admit the Mistake
Recognize the mistake you made. Consider the factors that led up to it so that you can avoid making the same type of mistake in the future. This can allow you to start taking steps to fix the problem. Admitting the mistake, though, does not mean that you have to beat yourself up about it.
If your mistake threw your budget off, recalibrate your budget. This may mean that you have to get a second job, pinch even more and save a higher amount to make ends meet. You may have to postpone a savings goal. At the same time, consider whether your budget was practical in the first place and if this impracticality ultimately led to the money mistake. Go through line by line to see what changes need to be done.
Create an Emergency Fund
To prevent an unexpected expense from ripping through your budget, it is important to have an emergency fund. Financial experts recommend keeping six months’ worth of living expenses in an emergency reserve.
Get a Second Opinion
Before making a big money move such as transferring thousands of dollars of debt that may change your tax status, get a professional opinion on the matter. Additionally, there may be extra strategies that you can take advantage of with the right direction.
We are human and we make mistakes, so stay calm, recognize what the mistake was and start fixing what was broke.