Tip Content Provided By: Financial Finesse
One of the consistent themes in life – in virtually every facet – is failure. It was one of the things that the University of North Carolina basketball team talked about after they beat Gonzaga for the national championship. Last year, UNC lost in the national championship game to Villanova University. This year’s team used last year’s loss as motivation. There are countless examples in the sports world of a failure being used as a motivation for a future success, but it only works if something is learned in the process.
We see that when we are interviewing candidates for positions here at Financial Finesse. At some point in the process, the conversations usually turn toward their biggest successes and failures in life. It’s amazing the stories that we hear about both sides of that equation.
More often than not, the lessons learned from the failures are much more valuable than the lessons learned from the successes. The same concept has proven to be true in the financial lives of many employees I talk to each week. There are a few “rules” that I use when coaching a person through a failure to help them not repeat it and to end up in a better place because of the lesson learned in the failure.
1. Forgive yourself. There is absolutely nothing to be gained from berating yourself and giving yourself negative messages. Say “I messed up this time, but I’ll get better.”
One of the more common “failures” people talk to me about is amassing credit card debt. They view it as a personal failure, and many people think that they’re the only person in the world who has gotten a little bit in debt. When they learn that others have been in this position (and MUCH worse) and then gotten themselves out of debt with just a few slight tweaks, they can exhale, begin to forgive themselves for the debt, and prepare to move forward.
2. Figure out why it happened. What exactly led to the failure? Was it a lack of attention? Was it a disregard for the consequences? A lack of information/education or something outside of your control?
Once you figure out the why, the real learning is possible. In the debt situation, it’s usually a simple lack of attention to detail that created the issue. A $20 purchase here, $25 there, a doctor’s visit with a copay and a night out with friends and all of a sudden there is more month than paycheck – and the need to use a credit card is there. If that pattern persists for long enough, there can be a few credit cards approaching their credit limits.
It’s not malice or blatant carelessness. It’s a gradual slow creeping up of credit card debt that happens when there isn’t a focus on exactly where each dollar is going. I’ve met a lot of people with significant credit card debt. Exactly zero of them woke up one day and said “I’m going to max out four different cards today and then struggle to pay them back.” It’s a slow build, and once there is a realization of that – the pay down can start.
3. Recognize that whatever the failure is, it isn’t YOU. It’s usually just one behavior that if modified ever so slightly, can be turned into a strength/reason for your next success. The tired old movie line “it’s not personal, it’s just business” is important here.
Don’t take a financial speed bump as a personal failure. It isn’t you. It’s situational…and situations can change.
4. Change whatever that behavior is! This is by far the most important step. The old “if you keep doing what you’re doing, you’ll keep getting what you’re getting” phrase comes to mind.
Usually, changing a behavior isn’t as tough as we think it is. I’ve started to use an app to track my exercise and nutrition and as a result, my level of fitness is increasing while my level of body fat is decreasing. One quick change – using an app to log my meals and my exercises – is helping me make very small changes that are providing good results.
5. Stick to the positive change. The world is filled with stories of people who have made progress, only to regress after a short period of time. I’ve had friends lose 25-50 pounds, only to put on 30-55 after burning out of the program they used to lose it. I’ve seen people file bankruptcy because of massive credit card debt, only to rack up another $40-50k in credit card debt within a year or two of the bankruptcy. Progress is best when it’s sustainable.
It’s impossible to go through life without experiencing failure. If someone does, it means they’ve either never tried anything difficult or they have absolutely zero self-awareness and don’t recognize their failures. Neither is ideal. So if it’s virtually impossible to go through life without experiencing it, embrace the failure that is all around us and use it to motivate you to a future success.
This article was derived from the Financial Finesse Blog.