How to Recover From a Financial Mistake

We all know that managing our personal finances can be stressful at best. Add to that loans, credit cards, mortgages, and everyday purchases, and the stress only increases.

Financial stress can be a burden to anyone, regardless of age. But the more seasoned one is in dealing with their finances, the more they can manage the stress and avoid making costly financial errors.

Millennials are a group who are especially prone to experiencing financial mishaps. Between raw ambition and a lack of knowledge and experience, one bad decision is more likely to spiral into financial disaster.

Mistakes are inevitable, but moving forward and addressing them requires a multi-step plan. Here are some steps to follow:

  1. Accept the Problem – Successful financial recovery requires that you be honest with yourself and accept the reality of the situation. Take stock of your resources and assess your situation.
  2. Create a Goal – Use a S.M.A.R.T. system to ensure your goals are met. The attributes of this system are such that your goals need to be:
    1. Specific
    2. Measurable
    3. Attainable
    4. Realistic
    5. Timely
  3. Develop a Plan – Figure out how much money it will cost to get out of your financial burden, then determine how much you must set aside each pay period or month to meet this demand.
  4. Execute Your Plan – Put into motion the goals and plans you have developed so that you can resolve your financial dilemma and more forward and past it.
  5. Check In – Constantly assess your plan to make sure it is relevant to your situation. Make changes as needed to stay on track.
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About cozbycpa

Heather L. Cozby is a CPA on the South Shore and Cape Cod. The managing partner of Cozby & Company, LLC, Heather has the resources and experience necessary to provide quality professional services on a timely basis and at a reasonable cost. She specializes in tax planning & preparation; audit, review & compilation services; management advisory services; bookkeeping; and accounting. Her unique niche is in working with homeowners’ associations and condominium trusts, advising with rental real estate, and providing outsourced financial consulting for mid-sized companies. She is more entrepreneurial than most accountants, and offers the best of both worlds - providing the services of a larger firm while retaining the ability to connect with her clients on a personal level.
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