Why You Need To Stop Beating Yourself Up Over Past Money Mistakes

Several years ago, I made a huge financial mistake. As a freelancer, I neglected to pay my taxes throughout the year and ended up owing the IRS thousands in April. Not only was I flat broke, I also felt like a fool. But the thing is, beating yourself up over these kinds of mistakes makes you more likely to repeat them.

Photo by Pixabay.

[referenced url=”https://www.lifehacker.com.au/2014/09/how-to-overcome-the-guilt-of-financial-mistakes/” thumb=”https://i.kinja-img.com/gawker-media/image/upload/t_ku-large/i3jywuax5du4ln6bkx5j.jpg” title=”How To Overcome The Guilt Of Financial Mistakes” excerpt=”We’ve all made financial mistakes — just bouncing a cheque or payment can make you feel incredibly guilty and embarrassed. But as long as you’re honest and forthcoming, you can overcome mistakes and figure out how to move forward.”]

I don’t know about you, but part of the reason I beat myself up over mistakes is that I feel if I’m hard enough on myself, surely I won’t make the same mistake twice. Research shows otherwise. Punishing yourself in this way actually makes you more likely to screw up again.

In one study from MIT, researchers tested this effect on monkeys. They gave them a task that involved looking at two different images on a computer screen. MIT’s newsroom reported:

For one picture, the animal was rewarded when it shifted its gaze to the right; for another picture it was supposed to look left. The monkeys used trial and error to figure out which images cued which movements… “If the monkey just got a correct answer, a signal lingered in its brain that said, ‘You did the right thing.’ Right after a correct answer, neurons processed information more sharply and effectively, and the monkey was more likely to get the next answer correct as well,” Miller said, “But after an error there was no improvement. In other words, only after successes, not failures, did brain processing and the monkeys’ behaviour improve.”

As MIT neuroscientist Earl Miller put it at Scientific American, “Success has a much greater influence on the brain than failure.”

But OK, we’re slightly smarter than monkeys. Still, other research, such as this piece published in the Association for Applied Psychophysiology & Biofeedback, found that failure makes us lose concentration and develop anxiety that gets in the way of future success. And yet another study published in the Journal of Consumer Psychology found that when subjects were asked to remember past spending mistakes, they were more likely to incur debt during an imaginary trip to a shopping centre.

None of this is to say you shouldn’t learn from your financial mistakes. But when you do, it’s probably for the best to move on and stop punishing yourself.

[referenced url=”https://www.lifehacker.com.au/2015/09/get-over-spending-mistakes-with-a-money-regrets-budget/” thumb=”https://www.lifehacker.com.au/wp-content/uploads/sites/4/2015/09/shutterstock_31490485-1-410×231.jpg” title=”Get Over Spending Mistakes With A ‘Money Regrets’ Budget” excerpt=”Money regret is pretty useless. Dwelling on a spending mistake makes you more apt to repeat it, so it’s best to leave the past in the past and move on. Still, it can be hard to shake some expenses. If you have a hard time dwelling on mistakes, try a ‘money regrets’ budget.”]