Today I know a lot more about personal financial management than I did fifteen years ago.

I was earning back then too but failed to pay much attention to what I was doing with the money. The biggest regret I have is not saving and investing early enough. If I were to estimate, I’d say I have lost 5-7 years of potential savings and compounding returns thanks to a nonchalant attitude towards money.

Back then, I didn’t think about it as I do now. It seemed that my earnings were insufficient to save, whereas, in reality, my expenses were uncontrolled. You can always save a little, provided you consciously attempt to do so. Over time, the sheer frivolity of certain monthly expenses started to bother me, especially when, by the end of the month I found my bank balance at the brink of being empty.

The first step was to correct the mistake of overspending. Step two was to start investing proactively, rather than waiting to see what’s leftover at the end of the month.

Being in denial any longer about the situation could have led to more dire consequences of overdrafts and personal loans.

Money mistakes by individuals are not unique. We all make them at some point in our lives and perhaps we make them more than once. The courage to admit these mistakes, however, is something that is less common but should become a priority.

Unless we admit it, we can’t fix it

Any shame you feel in admitting that you made a mistake with your money should get washed away when you understand the positive outcome of fixing the mistake. Let’s say you have overdrawn on your credit card and don’t have the resources to repay the entire amount. As a result, you end up paying only the minimum amount due. What will happen is that the interest charge on the entire overdue figure will kick in at roughly 36%-42% annually. On each successive monthly statement, you will find a higher and higher interest charge amount showing up. There will come a point, not too long down the road when your interest charges start to overtake what you have actually spent on the card. Taking a loan of any kind, be it an overdraft on your card or a direct loan, costs money and shouldn’t be taken unless it’s a dire emergency.

If you feel like the spotlight will be on you for making mistakes with your expenses or investments or insurance, then all you need to do is a quick google search on celebrities who went bankrupt. There is a whole list of well-known entertainers, sportspersons, successful, entrepreneurs among others who were once billionaires but are now left with little thanks to their poor financial management. It is also the inability to accept and admit in time that has led them to this outcome.

Don’t wait for a money mistake to become a disaster; undoing that will take a lot longer.

Be patient with yourself

Punishing yourself for your money mistakes isn’t the answer either. What’s needed is patience to rework your finances. The longer you drag on the mistake, the longer it will take for you to unwind it. You want to move from a position of destroying your wealth to a place of creating or growing your wealth.

Savings and investments also don’t get converted into wealth overnight. It takes time and it takes effort to understand what it is that you want your money to do.

At the very least, you have to rein in fanciful expenses which will require you to change your lifestyle too. What you are now looking at is not just a shift in your money habits, rather a change in your lifestyle too. At the easiest end of the spectrum, this change might require you to cut back on a few trips to the neighbourhood café or hold back on buying that next trendy outfit. At the most trying end of the spectrum, it might involve giving up certain extravagant activities you enjoyed indulging in or it may even call for a change in the company you keep.

Changes will become unbearable if you don’t give yourself the time and space needed to bring about a positive impact. Don’t be under obligation to anyone else other than yourself when it comes to fixing your money mistakes. It’s true that life gives us many chances. It also gives us many choices. Be aware, be conscious and make the choices that have the potential to improve your life. Admitting your money mistakes, fixing them and then moving on to the next phase of your lives, is a choice that requires conscious action. Don’t be hesitant and don’t delay this most important choice that can potentially improve the quality of your physical, mental and emotional life.