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Learn from the Country’s Financial Mistakes

If you’ve ever filed for personal bankruptcy or taken other steps to get yourself out of significant debt, hopefully you were able to learn from your experience and are now on the road to stronger finances. While learning from our mistakes is perhaps not the most fun way to get better at things, it’s often the most effective.

That’s why it can be nice when we can learn from the mistakes of others – it saves us a little grief. A recent article from the Motley Fool offers some financial lessons we can all take away from our country’s recent financial meltdown and ongoing troubles.

Here’s a summary.

Avoid Your Next Financial Crisis

A recently released report on the financial crisis and the job markets indicates that, for the most part, what went wrong could have been prevented. How? By avoiding these financial mistakes, which translate nicely into lessons for personal finance.

  • Avoid blame: In the political sphere, accepting responsibility for something that went wrong could easily translate to losing your job. But in your own finances, if you assign blame for your mistakes elsewhere, you may never fix them. So accept responsibility for your poor financial habits (whatever they may be) and charge yourself with fixing them.
  • Be honest about the sources of your financial woes: It may make you feel good about yourself to belong to a pricey gym or shopping at the hippest grocery store in town, but would a careful look at your finances reveal that such expenses are necessary (or even affordable)? Avoiding financial trouble may mean finding alternate ways of living, and fessing up before it’s too late can save you problems down the road.
  • Be willing to change your habits: While financial fixes like filing bankruptcy may eliminate debt, they don’t provide lifetime immunity from future debt. If you fall back into your pre-bankruptcy spending and borrowing patterns, your finances will likely not improve after your case is completed.
  • Set yourself up for a brighter future: Have trouble resisting a latte and a fresh pastry when you pass that Starbucks every day on the way to work? Find a different route and eliminate the problem altogether. It’s important to remember that you’ll be stuck with your finances for the rest of your life, so “rebelling” against a budget or savings plan really won’t hurt anyone but yourself. On the plus side, you’re the one who gets to reap all the rewards of sticking with your improved financial management strategies.
  • Take time to honestly assess your situation: For many people, filing bankruptcy is the wake-up call they need to reevaluate their spending and saving habits. But even if bankruptcy isn’t in your future or past, take time to review your bills, bank accounts, credit reports and other financial information regularly. After all, the definitive ruling on the country’s financial crisis didn’t come until after the official report was released. Plus, taking a careful look at your finances can help you move forward with confidence.

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