All of us have made mistakes in life we'd rather forget. Some have been of our own doing. Others have come when things happen outside our control. But how do you learn from your mistakes? Are you someone who tries to avoid mistakes out of a fear of failure? Are you concerned about what others will think if you fail?
Or are you someone who presses forward with an understanding that mistakes are part of the road to success? Are you someone so focused on your goal that you don't care what gets in your way?
I've found myself in both of these camps in my own life. There have been times when I was overly cautious of taking something on out of fear I wouldn't be successful – of failure. Other times I've been so sure of what I was doing that I pressed on without concern.
I've found success in both of these camps. I've also found failure. And that's the lesson. No matter how we try to avoid them, mistakes will happen. We will screw up things. Even in the best of circumstances, life will throw curveballs at us. These curveballs can lead to us making mistakes.
Learn from the good and bad things
Keep in mind – we learn from the good things and the bad things that happen to us. In my experience, the life lessons learned out of our mistakes are the lessons we don't soon forget. They guide us in the decisions we make going forward. Hopefully, they help us avoid making the same mistakes in the future.
Some of our mistakes are personal, like mistakes made in relationships. Some are financial, like living beyond our means or not saving and investing. The larger the mistake, the greater the potential lesson we will learn.
But just how does that happen? How do you learn from your mistakes? How do you keep from letting mistakes beat you down? That's what I want us to explore. Why? Because if you can consistently find a way to learn from your mistakes, I'm convinced you will be a happier, more productive person.
Here are some thoughts.
Failure vs. Success
Failure and success are terms that are quite elusive. Everyone has a different definition for each. Some define them by material measures. That might be job status, income, of the amount of “stuff” they own.
Others define success in more personal terms. That might be having a healthy marriage, being a good father, son or daughter. Giving back to the community or helping others. We all love success no matter how we define it.
Failure, on the other hand, scares many of us to death. We think it reflects poorly on who we are as a person. If you are someone who cares deeply about what people think of you, failure can be devastating. Fear of failure can keep you from risk-taking, even calculated risk-taking. It can keep us stuck! If we let others define success and failure for us, we will have trouble.
The advertising industry and media spend hundreds of billions of dollars trying to define what success looks like. Let's face it. They don't care about your or my success or failure. As long as we buy what they're selling, they're happy. They'll use any means necessary to make you think you can't live without what they're selling. They try to make you feel like if you don't have what they're selling, you are lesser than what you could/should be.
Keeping up with the Joneses
It's the textbook “keeping up with the Joneses” attitude that has many of us in debt up to our eyebrows. It's hard not to buy into the narrative. When you see your neighbors driving the new Tesla (or your dream car), wearing designer clothes, going to expensive restaurants or whatever else might look appealing on the outside, you may feel pressure to be like that.
Here's the thing. You have no idea what's really going on in their lives. The Facebook world isn't the real world. It's the world we want everyone to believe we have. Consumerism is a curse that can bring us down if we aren't careful.
Many of the biggest financial mistakes come out of buying things we don't need at prices we can't afford. Let's explore that for a minute.
Living outside your means
No matter our income level, the consumerism mentality always seems to rear its ugly head. When we get a raise, we spend it on something we want rather than saving or investing it. Same thing with a bonus or a tax refund. If we view that as free money to spend, it may indicate a larger spending problem. Many times the bonus money is a downpayment for something we borrow to buy. Maybe it's a new car. Maybe it's a vacation that we finance. it could be anything.
Instant gratification is a mistake that I've made on numerous occasions. I use the car and vacations as examples because I've overspent on both. In our younger days, my wife and I spent everything we made. Yup. This personal finance blogger was a big spender. We racked up credit card debt, took out car loans with little or no down payment or regard for the interest we paid. Like I said in the beginning. I've made some dumb mistakes.
Where we lived, most people made a lot more money than we did, had nicer houses, cars, and things. We wanted those things and didn't mind borrowing to get them. I'm not talking about Mercedes or luxury resort vacations. That's not the point. The point is the things we bought were beyond our means to pay for them with cash. So we borrowed to get them. Being slaves to debt is not a fun way to live. It's exhausting.
The other crazy thing. My income wasn't consistent. We would budget for the “best case” income scenario. That's the opposite of responsible financial management. When that income fell short. what did we do? Yup. We borrowed some more to finance the deficit.
I'm embarrassed as I write this. I've been a financial advisor for most of my career. Like many in the advice professions, we're often better at advising others than adopting that advice in our own lives.
Once you get into the habit of overspending, it's hard to break. It seems you're always scrambling to pay the bills. When you're in the mindset of spending on stuff you have convinced yourself you need, it's a strong pull. It's one thing to do this when you're both working and have a steady income. It's something else entirely to do this when the primary income is variable.
What did we do? We finally got serious about controlling our spending. We drastically cut our expenses. Over the years, we realized we had accumulated a lot of junk we weren't using. Some of it we rarely used. Cathy, my wife, finally convinced me to allow her to begin getting rid of a lot of our junk.
It's been incredibly freeing to live within our means. We still have more debt than we'd like. But we aren't slaves to it anymore. That's been a huge lifestyle change for us. The feeling of freedom has changed the way we think about and spend money. We're more conscious of our spending. We don't make any significant purchases without talking about them. We talk a lot about wants versus needs. That was a huge change for us. We had convinced ourselves that everything we wanted was a need.
That's the kiss of death. We had little to no emergency fund. We were able to use debt consolidation to relieve some of the credit card debt we'd accumulated. Keep in mind, that only works if you stop using the credit cards that got you there in the first place.
Learn from your mistakes
Here are three ways you can learn from your mistakes.
Be honest with yourself
We were our own worst enemies. Rather than challenging each other on spending, we supported each other. We lived in denial of the reality of how we were living. Everything looked good on the surface. We were hanging with our neighbors. Our best faces were on. We were also lying to ourselves. Looking back, we knew we were creating problems for ourselves. We didn't want to admit it or deal with it. That was a huge mistake.
Don't be in denial. The sooner you face the reality the quicker you can move forward.
Being honest with yourself when examining how you got where you are is a way to learn from your mistakes. Denying where you are will keep you from moving forward. You will never learn from your mistakes if you don't acknowledge them.
Comparing yourself to others is the kiss of death. We didn't understand that's what we were doing at the time. In retrospect, we do. You may be playing the “keep up with the Jones'” game without even knowing it. The pressure to keep up is subtle but very dangerous. What others do, look like, or have has nothing to do with you.
My son, a recovering heroin addict is now one year sober. He spoke to our church's senior high group a few weeks back. One of the students asked him what was the one thing he'd advise them to avoid. His answer was astute. He said, “don't covet what anyone else has.”
He explained to them that was one of the driving forces for him exploring drugs in the first place; that he saw others doing it and wanted what they had. The danger in that when drugs are involved is obvious. It may not be as obvious in other areas. It can be just as damaging.
If you're coveting what others have, stop. It will only bring you trouble. Examine the damage done by coveting or chasing what others have. Avoid it going forward.
There a story told about an old guy sitting in the front row of the church listening to his pastor giving a particularly moving sermon. He was saying “amen” and raising his hands in approval. Then all of a sudden, the preacher started saying some things that got to the old man. His mood suddenly changed. He promptly got up and headed out of the sanctuary. When asked what changed and why he left, he said, “The preacher stopped preaching and done gone to meddling.”
It got too personal.
I'm about to get personal. Understand I'm also preaching to the choir – myself. Forgiveness is a hard thing. The hardest person to forgive in life is ourselves. Let me ask you. When you make mistakes do you beat yourself up? I know that's something I struggle with.
When others betray, lie or mistreat me, it hurts. If they offer aq sincere apology, it's easier to forgive. Why is that so hard for us to apply to ourselves? Because we're always harder on ourselves than we are others.
Perfection is the enemy. No one is perfect, including us. Having a healthy view of mistakes is critical to good mental health. If we beat ourselves up every time we screw up, we will find ourselves in a constant rut. It will make it much harder to learn from our mistakes. It will make it much harder for us to move on from them.
You won't be able to learn from your mistakes unless you can forgive yourself for the ones you make. It's the only healthy way to learn.
Like most things in life, learning from our mistakes can be hard. It's the hard things that help us grow the most. Cathy and I spent a lot of time in denial about how we were living. We put on a good front. No one really knew what was going on behind the curtain (think Wizard of Oz).
That's what our son learned too. His advice not to covet comes out of his own experience. The damage caused by coveting nearly killed him. There will always be someone who has something you want; someone who seems like they have it all together. They don't. They're just better at hiding what's really going on.
Understand mistakes are part of life. Often, they are the best part of life. They help us grow. Be honest with yourself. Stop comparing. Forgive yourself.
That's how we learned from our mistakes. It may just be the right formula for you to learn from your mistakes too.
Fred started the blog Money with a Purpose in October 2017. The blog focused on three primary areas: Personal Finance, Overcoming Adversity, and Lifestyle. During his time at Money with a Purpose, he was quoted in Forbes, USA Today and appeared in Money Magazine, MarketWatch, The Good Men Project, Thrive Global and many other publications.
In April 2019, Fred, along with two other partners, acquired The Money Mix website. To focus his time and energy where he could be the most productive, Fred recently merged Money with a Purpose with The Money Mix. You can now find all of his great content right here on The Money Mix, along with content from some of the brightest minds in personal finance.