How to Forgive Yourself for Financial Mistakes
What You Need to Know About Money Mistakes
Money mistakes are part of the process. No one gets it right 100% of the time, and beating yourself up won’t help you move forward.
Shame won’t fix the problem—reflection and action will. Instead of focusing on what went wrong, try to understand why it happened so you can make a different choice next time.
Get curious about your money story. Identify the financial beliefs that led to the mistake and take a small, actionable step toward change.
Why We Struggle to Forgive Ourselves for Financial Mistakes
Knowing something and doing something are two very different things.
We know we should drink more water, move our bodies, and go to bed at a reasonable hour—but that doesn’t mean we do those things consistently.
The same goes for our finances. We know we should save for emergencies, invest for the future, and live within our means. And yet, life happens.
We make impulsive purchases. We forget to read the fine print. We assume we understand a financial decision, only to realize later that we missed a crucial detail. And instead of acknowledging that mistakes are part of the learning process, we turn to shame.
Shaming yourself doesn’t help you make better financial choices. If anything, it makes it harder to engage with your finances at all. So, if you’ve ever found yourself replaying a financial mistake on a loop, wondering, How could I have been so careless? this post is for you.
Let’s talk about how to get over a bad financial decision and move forward with self-compassion.
The Emotional Weight of Financial Mistakes
Money is never just about numbers. It’s wrapped up in emotions, identity, and deeply ingrained beliefs. That’s why making a financial mistake doesn’t just feel like an error in judgment—it can feel like a personal failing. When you overspend, forget to pay a bill, or invest in something that doesn’t pan out, it’s easy to spiral into thoughts like, I’m bad with money. I’ll never figure this out.
But those thoughts aren’t just unhelpful; they’re also inaccurate. One financial misstep—or even a handful—doesn’t define your financial future. Instead of viewing a money mistake as proof that you’re incapable or irresponsible, try reframing it: this is an opportunity to learn, not a reason to punish yourself.
Financial mistakes don’t happen in a vacuum. Your decisions are influenced by systemic factors (the economy, access to financial education, and societal pressures), personal experiences (how money was handled in your family), and psychological factors (your stress levels, emotional state, and past experiences).
For example, if you grew up in a household where money was scarce, you might find yourself spending impulsively whenever you have extra cash. This could be because your brain is operating in survival mode (e.g. “I need to buy this now while I have money!”), even if your financial circumstances have changed.
Understanding these layers can help take the sting out of financial mistakes. You’re not failing—you’re responding to patterns and pressures that have been shaping your money behaviors for years.
The good news? Once you become aware of these influences, you can start making more intentional choices and start to recover from financial mistakes.
Common Money Mistakes
As a financial therapist, I’ve seen some patterns come up again and again.
Here are a few of the most common financial mistakes I’ve encountered, both in financial therapy sessions and when facilitating financial wellness workshops.
Chasing a bank bonus: Someone opens a new bank account for the welcome bonus but doesn’t realize the overdraft fees are sky-high. A few months later, they’ve lost more money than they gained.
Forgetting to invest retirement savings: Someone enrolls in their employer-sponsored 401(k) but doesn’t select any investments. Years later, they realize their money has been sitting in cash instead of growing.
Buying a house without factoring in all costs: A buyer calculates their mortgage payment but overlooks rising property taxes, maintenance fees, or HOA dues—leaving them financially stretched.
Not prioritizing an emergency fund: For whatever reason, neglecting to start an emergency fund and needing to tap into loans or credit to cover an unexpected expense. If you need help calculating your emergency fund the easy way, I’ve got a blog post for you here.
Ignoring a credit score: Popular boomer financial experts love to say credit scores are debt scores. Not only is this misleading, but a strong credit score isn’t about carrying debt; it’s about financial flexibility and having options. A strong credit score helps individuals qualify for better interest rates on loans, easier approvals by landlords, and even discounts on car insurance. Learn more about what popular financial gurus get wrong here.
None of these mistakes make you bad with money. They just make you human.
Benefits of Forgiving Yourself
Research in positive psychology shows that self-compassion leads to better decision-making, lower stress levels, and greater resilience. When you forgive yourself for financial mistakes, you reduce the likelihood of repeating them—not because you’re letting yourself off the hook, but because you’re breaking the cycle of shame and avoidance.
Studies also show that people who practice self-compassion are more likely to engage with their finances, set healthy boundaries, and take proactive steps toward financial stability. They approach money with curiosity and confidence instead of shutting down and ignoring their bank accounts after a mistake.
Think of forgiving yourself as a financial wellness tool in your self-care toolkit. When you let go of shame, you free up mental energy to make thoughtful, grounded money choices.
So, how do we move past the shame and actually learn from these experiences? Here’s how to acknowledge, learn, and take small meaningful steps toward forgiveness in four steps.
4 Steps to Forgive Yourself for Financial Mistakes
Step 1: Get Curious, Not Critical
Instead of beating yourself up, get curious about why you made that financial decision in the first place.
Ask yourself:
What was I thinking and feeling when I made that choice?
What did I learn about money growing up that might have influenced my decision?
Was I acting out of fear, scarcity, or social pressure?
For example, let’s say you turned down a job offer with a higher salary, only to regret it later. You might assume you were just “too scared” to take the opportunity, but if you dig deeper, you might realize that your financial anxiety stems from watching your parents lose their jobs during a recession.
Once you understand why you made a certain choice, it’s easier to make peace with it—and make a different choice next time.
Step 2: Normalize the Experience
Financial mistakes feel isolating because we think we’re the only ones who’ve ever messed up. But the truth?
Everyone makes mistakes, and mistakes are a part of not only our financial lives, but life in general.
Talking to friends, family, or an online community about money mistakes can help take the shame out of the equation.
Think about it: If a friend came to you feeling embarrassed about a financial mistake, you wouldn’t tell them they’re stupid or irresponsible. You’d remind them that everyone makes mistakes and that this one decision doesn’t define them. You deserve to extend that same kindness to yourself.
Step 3: Learn What You Can and Move Forward
Once you’ve unpacked the why and reminded yourself that you’re not alone, it’s time to turn this mistake into a learning opportunity.
If you forgot to invest your 401(k)? Now you know to check your account settings and make sure your money is working for you.
If you bought a house that stretched your budget too thin? Next time, you’ll factor in all the costs—not just the mortgage payment—before making a big financial decision.
If you overspent on gambling apps? You can set limits or self-exclude from betting sites to prevent future losses.
This isn’t about dwelling on the past or expecting perfection in the future. It’s about making small, intentional changes that help you build financial confidence over time.
Step 4: Shift to a Financial Self-Care Mindset
Let’s get one thing straight: Beating yourself up is not a financial strategy.
Self-compassion is.
When you can approach money from a place of curiosity instead of shame, you create space for growth, improvement, and long-term success.
Mistakes are inevitable. The key is to learn from them, adjust your approach, and keep moving forward.
Forgiving yourself for financial mistakes isn’t a one-time event—it’s an ongoing practice. And you don’t have to do it alone. In my weekly newsletter, I share shame-free financial insights, along with actionable and doable tips. Sign up here to get practical, judgment-free advice straight to your inbox.