I Made a Bad Financial Decision: What Now?

Have you ever kicked yourself after a bad financial move? We’ve all been there. Whether it’s an extravagant purchase on your credit card that you regretted later or a poor stock investment, thousands of Canadians like you have felt nervous, confused, and worried about a financial decision they’ve made.

Sometimes it’s a collection of bad financial decisions that lead to crippling credit card debt.

So the question persists: How do you come back from a mistake that cost you thousands of dollars… or more? 

Here’s the good news: Credit Canada’s certified credit counsellors have supported thousands of Canadians with the aftermath of one or many financial mistakes — and we’ve seen them overcome it, too. 

The most important thing you can do is keep your chin up and not dwell on it. Then, you can take the initiative in planning and following a viable solution. We’re here to walk you through what to do after making a bad financial decision. 

7 Things You Can Do After Making a Bad Financial Decision

Take a deep breath — you’re going to get through this. Walk with us through some proactive steps to take after a bad financial move.

1. Understand the Scope

First, let’s assess the damage. Did you damage your credit score? Did you lose money, and if so, just how much? Does not having that money impede your ability to pay your bills, or was it a sour investment from a few years back? Different money mistakes have different implications, but it’s essential to gain awareness of exactly what’s been lost. Is it $5,000? Or $7,000 when you also consider the interest required to repay it? 

Credit Canada’s free debt calculator is a helpful tool to understand the scope of your debt.

On top of understanding the numbers, try to pinpoint the source of the mistake. For example, was a poor stock investment due to a lack of research or understanding? Or was an expensive credit card transaction due to underlying emotional issues? 

2. Accept that What’s Done is Done

Most financial mistakes aren’t reversible, so there’s no use focusing on the past. Remember that even some of the most financially savvy people and successful entrepreneurs have made financial mistakes, too. 

It’s easier to accept a mistake when you understand just how common that mistake is, and that you’re not the first or last person to make it. The best part? If others can overcome it, then so can you. 

Try to let go of the guilt — find opportunities to lighten that burden and give yourself grace for your mistake. Treat yourself to a budget-friendly self-care activity, or spend time with a trusted family member to help you work through some of those difficult emotions.

3. Watch Out For the Easy Way Out

Newsflash: it’s rarely easy. 

Anyone offering an “instant” credit score boost or “same-day $20,000 loan” is usually too good to be true. Plus, predatory services like these can even make your financial mistakes worse. Here are some red flags to look out for:

• Loans with no credit check required
• Aggressive sales tactics and pushiness or urgency
• “Guaranteed” approval
• Unusual payment method requirement (e.g., Bitcoin or wire transfer)
• Limited contracts or no contracts
• Negative or zero online reviews
• Consumer complaints on the Better Business Bureau (BBB)
• Limited company history

Take a deep breath and consider your options before seeking a quick fix out of desperation.

4. Consult a Credit Counsellor

Reality is, the world of debt and finances is a big and scary place for many Canadians. 

Naturally, you might need a subject-matter expert to help you delve into the details. And what better expert than a certified non-profit credit counsellor with years of experience supporting Canadians like yourself through every financial issue you could imagine? Credit counselling services offer you an objective, trusted expert to talk about your situation and help you understand all the options available. They’ll assess your situation and recommend the best course of action depending on your financial goals and the situation’s severity.

PS: Credit Canada’s credit counselling services are 100% free, confidential, and non-judgemental.

5. Assess Your Options

No matter how bad your financial mistake is, you always have options. And no, you’re not always limited to bankruptcy. Our certified credit counsellors offer clients one-on-one counselling to recommend and help assess various debt relief options to improve your financial health. Here are some examples of financial options to address financial mistakes:

• Refinancing: If you’ve acquired a loan you can’t afford, consider finding an alternative lender with more competitive interest rates and loan terms to refinance. 
• Credit building: Credit score dips happen for all sorts of reasons. While sound financial planning can help you maintain payments, getting expert advice on how to improve your credit score can help you rebound faster.
• Debt consolidation: Can’t handle all your debt payments? Consolidation loans or a debt consolidation program can help you merge your debts into one payment while decreasing your interest, making that payment more manageable for you. 
• Legal support: Ever made the mistake of divulging too much personal information to the wrong person? For some people, that could result in credit card fraud or other types of identity issues that can sacrifice your financial well-being. Consult the police or a legal professional if you made a mistake that led you to become the victim of fraud. 
• Budgeting: Is your spending out of control? You might need to rethink or recreate a budget that helps you minimize your expenses until you get your finances back on track. 
• Secondary source of income: Can you find extra hours in the week to pick up a part-time job to close a gap between your income and expenses? Maybe even a work-from-home gig to make your schedule a bit easier. 
• Debt repayment strategy: Sometimes, you just need to crunch numbers and figure out how to repay your debt as quickly and with as little interest obligation as possible. The avalanche method is popular with our clients — it focuses repayment on debts with the highest interest rates first. Another option is the snowball method, which prioritizes paying off debts with the lowest minimum balances first. 
• Bankruptcy: Sometimes, bankruptcy is the only feasible option in situations where debt repayment just can’t happen, no matter which of the above strategies you deploy. Talk to a credit counsellor to assess whether bankruptcy is for you. 

Of course, the right course of action depends on a wide range of factors like your existing financial obligations, income, and the extent of your mistake. That’s why you need this next step to lay everything out. 

6. Create a plan with SMART Goals

Once you’ve narrowed down financial strategies to combat your debt, it’s time to dive into the details with SMART goals to fix your mistake. SMART financial goals are:

• Specific
• Measurable
• Attainable
• Relevant
• Time-Based

Say you decide to try the avalanche debt repayment strategy along with taking on a part-time job. Some examples of SMART goals might be:

• Pay off two high-interest debts totalling $10,000 with $1,000 monthly payments over the course of 10 months
• Work an additional 20 hours per month at $15/hour to save $300 more per month to put toward debt repayment

We’ve got numbers, timelines, and specifics — all vital for an effective SMART goal.

7. Track Your Progress

One month into your repayment plan, sit down and assess your progress. Are you making the payments as fully and regularly as you planned? Keep yourself accountable by automating withdrawals and scheduling check-ins with yourself or your credit counsellor.

And if you’re having trouble staying on track? Don’t worry. Maybe there’s room for an adjustment. For example, adding another month to your repayment plan is okay if you feel overburdened with surprise expenses one month. Similarly, you might consider making your plan more aggressive and repaying more per month if your situation allows it. 

And, if you need help with budget organization, try out our free Budget Planner + Expense Tracker.

Overcome Financial Mistakes with Credit Canada!

The bottom line is that financial crises can happen to anyone, but they don’t define you. Whether you regret a hasty purchase or feel overwhelmed by thousands of dollars of debt, there’s always a way out. Here at Credit Canada, we’ve made it our mission to help Canadians get out of debt and get back to life. 

So you made a financial mistake — most of us have. Let’s take that first step to financial health and freedom. Talk to a credit counsellor today.