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January 14, 2022 — 14 min read

How to stop stressing over money mistakes

Josh Pigford


Josh Pigford

The path to financial independence isn’t a math problem.

It’s a self-management problem.

Because how you think and act with your money has more impact on your financial success than anything you can learn from a spreadsheet.

Unfortunately — most people aren’t good at managing themselves.

Instead, their time, energy, and attention are unfocused and fleeting. They give into distractions easily. And often let the weight of their inner critic bury their boundaries (and cripple their confidence).

Predictably, this approach doesn’t produce many positive outcomes.

And if that sounds like you, you can probably pinpoint a few areas of your life where your lack of follow-through has poisoned your progress. And perhaps, it has made your path to financial freedom trickier than you’d expected.

But the good thing is, you can start making more purposeful progress — if you can do the following two things:

  1. Reframe your thinking — so you can learn not to let mistakes (even small ones) trip you up, and
  2. Develop a few critical skills required to manage yourself and your money — more effectively

And that’s what we’ll be talking about today.

What does “managing your money better” look like?

We often think we have to get better tools or tech. Or simply make more money. And our financial problems will go away.

And sure, those things help. But maybe not as much as you think.

In reality, refining the way you think helps you shift your trajectory — and start building for the long-term. So it can impact how you act.

Predictably, these problems can’t be solved by better tech.

Of course, technical solutions can help alleviate the symptoms (and it’s what we hope to help you do here at Maybe).

But before you can make a noticeable impact on increasing your net worth and getting a better sense of financial control — you need to think about what’s been stopping you from prioritizing making progress up until this point.

Money problems materialize in the mind.

You’ve heard it before — “mindset is everything.”

How you think affects how you behave.

How you behave affects the results you produce.

And those results have a direct correlation with how successful you feel.

So rather than focusing on the technical skills required to reach your financial goals, you’re better off sharpening your soft skills instead.

Author Morgan Housel makes an excellent case for mastering the soft skills of personal finance in his book Psychology of Money. He notes that doing well with money has little to do with how smart you are — and a lot to do with how you act and your decisions.

Meaning — it’s not about how technically apt you are at managing your finances. It’s about how well you can override the (perhaps limiting) beliefs you hold onto regarding money and financial success.

And your prowess at overcoming any heavy emotions that can sway your thinking and cloud your judgment.

As he mentions in the book:

Few people make financial decisions purely with a spreadsheet. They make them at the dinner table or in a company meeting. Places where personal history, your unique view of the world, ego, pride, marketing, and odd incentives are scrambled into a narrative that works for you.

Ramit Sethi, the author of I Will Teach You to be Rich, also talks about the “power of you in your personal finance equation:

Just as the diet industry has overwhelmed us with too many choices, personal finance is a confusing mess of overblown hype, myths, and outright deception — and us feeling guilty about not doing enough or not doing it right. If you’re not satisfied with your finances and you’re willing to take a hard look in the mirror, you’ll discover one inescapable truth: The problem, and the solution, is you.

Undoubtedly, getting better at managing yourself and the way you think will have a higher ROI than making a plan inside a spreadsheet.

And a simple first step — is to put your beliefs (and fears) under a microscope. So you can work on any inner issues that are stopping you from making the external changes you seek.

Smart money management is effective self-management

Of course, you can forecast, predict and plan as much as you want.

But taking charge of your personal finances is more than just syncing to a new tool and doing some net worth calculations. It’s developing the skillset that helps you to manage yourself more effectively.

So you can actually do all the things you say you want to do.

Because guess what?

Fear, perfectionism, and entitlement can cripple even the best of us.

They stop us from following through.

They stall our progress.

They hinder our success.

This is why we need to build weapons to battle against these agents of procrastination. And those weapons come in the form of learnable skills. That luckily for you — anyone can develop.

Three critical skills that catalyze confident money management

#1 Decision making

Making smarter decisions with your personal finances (even if it’s just the decision to get started) often feels like a Herculean feat.

This is mainly because we’re scared of making the wrong move, and that fear acts like a paralysis tick.

Instead of deciding on one course of action, we often do nothing.

But making better decisions boils down to better thinking. And the knowledge that you can’t possibly be 100% sure of any outcome. As Annie Duke shares in her book, Thinking in Bets:

Acknowledging uncertainty is the first step in measuring and narrowing it. It creates open-mindedness and a more objective stance.

So removing the need to be 100% correct with your decisions (and embracing all the uncertainty) is a helpful first step.

Another significant thing to note is if you’re attempting to make your best decisions “in the moment,” the odds aren’t with you. Or anyone, for that matter.

For instance, if you’ve just had a fight with your spouse and then try and make an important life decision right after that, it’s unlikely that you’ll feel optimistic and confident when you’re considering your options.

Calm, optimism, and open-mindedness are unreachable when you’re in a negative frame of mind. But they’re vital for propelling your forward in the right direction.

So, if you’re upset, dealing with the emotion first will help you make a better decision.

The easiest way to avoid the rollercoaster of emotions that conflict with your decisiveness — specifically when it comes to your finances — is to make your money decisions as automatic as possible (which is where smarter tech can start to help you out.)

Because the quicker you can automate (or flat out remove) decisions you make about your finances — the faster you rid yourself of the emotional flailing that takes place when you try to make those same decisions spontaneously.

#2 Patience

Inaction that results from indulgence is procrastination, but inaction that results from intention is patience. – Rory Vaden

One of the most incredible things about personal finance is the effect of compounding. And Charlie Munger says the first rule of compounding — is never to interrupt it unnecessarily.

And that requires patience.

Patience is giving yourself time to breathe. Giving yourself margin in your life and not trying to do everything all at once.

Patience is slowing things down on purpose and taking a moment to gather perspective. It’s letting things sit while you focus on something more significant.

In personal finance, patience is paramount.

It’s the difference between letting your money sit in an index fund and watching that compound growth in awe vs. canceling that plan and trying your hand at day trading, hoping for a more immediate payoff (with a helluva lot more risk).

But patience can only come from practice.

And making a habit of choosing the long-term over the short term — every single time.

#3 Optimism

Optimism is helpful in all aspects of life.

But it has a unique standing in the world of personal finance.

Because it allows us to flip our outlook and find peace of mind that, in all likelihood — we will end up okay. Of course, we’re not talking about toxic positivity. Or even saying there’s no room for pessimism (critical thinking can be a strength, too).

But what optimism represents — is a foundational belief that the odds of a good outcome are in your favor over time even though setbacks are bound to happen.

And that’s a thought worth holding on to.

Optimists don't believe that no problems will arise—they just believe that they can solve and SURMOUNT any that do. — Adam Robinson

In other words, optimism gives you the tools to flip your perspective.

Stop thinking so much about your “worst-case” scenario, and instead — consider your “best-case” scenario, too. Or even just the “most likely” case.

Because it’s in these small perspective shifts — that you start to view your options differently, find more opportunities, and make the kind of purposeful progress you want.

Defense Against the Unknown: Creating your backup plan

Now that we’ve talked about some of the signature skills required for more effective self-management. And how your habits and behaviors are what ultimately shape your financial success...

I want to introduce you to a few simple tactics you can employ to remove some of the pain from hitting any unexpected setbacks.

Of course, we don’t want to dwell on our worst-case scenario.

But it doesn’t mean we can’t plan against it. And have some practical tools to build up our defenses.

Defense #1: Build a “stupid mistakes“ fund

To feel more in control when something goes awry or your situation unexpectedly changes — we want to build a spendable safety net.

The “stupid mistakes” category that Ramit Sethi uses in his money system is a great way to account for this:

I actually have a “stupid mistakes” category in my money system. When I first started this, I saved $20/month for unexpected expenses. Then, within two months, I had to go to the doctor for $600, and I got a traffic ticket for more than $100. That changed things quickly, and I currently save $200/month for unexpected expenses. If I haven't spent it at the end of the year, I save half, and I spend the other half.)

This system will take time to build, especially if you’re starting from zero. But to ease the hardship when mistakes happen, having some backup funds can bring healthy peace of mind.

If you’re with a good bank, you can set yourself up with multiple sub-savings accounts. And every time you dump a chunk of money in your primary savings account, you can sweep portions of it to more specific savings goals, i.e., your own “stupid mistakes” fund.

Remember — we want to try and automate these decisions. So take advantage of the tech available to you!

Defense #2: Build your skills on the side

For many people, financial independence includes making money, building, or investing in a business.

Of course, business ideas are plentiful. But most people’s problem is execution. This is why I’m such a massive fan of side skills> side hustles.

Because you know what makes it easier to execute your best ideas?

Practicing new skills and habits that will bring them to life.

Do you know what makes it unnecessarily complicated?

Having the pressure of NEEDING to earn an income from a personal project.

This doesn’t mean a side hustle can’t be an end goal you’re working toward.

But a fiercer focus on your skill set will likely yield greater returns. And if you can build your skills on the side of your primary source of income, you can relieve that financial pressure that often makes us stumble and causes progress to slow.

There is undoubtedly the perfect option out there for you to build another income stream into your life. And your best bet is to let your strengths, values, and interests guide you toward what that is.

So not only are you hyper-aware of the kind of work that calls to you. But you can also intentionally build the expertise required to pull it off. And make a habit of practicing the behaviors that will have maximum impact.

Defense #3: Have a system to shift your mood (so you can make better decisions instantly)

We talked earlier about the skills required for better money management:

  1. Decision making
  2. Patience, and
  3. Optimism

And discovered that when you feel bad — it’s unlikely you’ll invoke your best self to make the best decisions.

This is why it makes sense to have a simple system for being able to shift your mood. So that any decisions, not just financial ones, are made from a more positive outlook.

The six quickest and easiest ways to shift your mood are:

  1. Exercise (even a quick set of push-ups can change your psychological state)
  2. Breathwork (which can be as simple as one mindful breath or can translate to daily meditation)
  3. Feed yourself (something nourishing and wholesome is best)
  4. Hydrate (dehydration is a mood killer, so more water can make you feel almost instantly better)
  5. Sleep (8 hours a night is a game-changer)
  6. Write it out (thinking as writing is perfect for problem-solving)

Focus on what you can control

If you find yourself stressing over money mistakes, not making the progress you want, or failing to feel good about your decisions — take some time to evaluate what might be causing your struggle.

It’s unlikely that simply making more money or finding a better technical solution will solve all your problems.

So prioritizing the inner work, how you make decisions, practicing patience, and developing a more optimistic perspective will have a remarkable impact.

And when you develop this healthier way of thinking and use that to influence how you act — you’ll start to focus on what you can control. And feel more empowered to achieve the result you want.

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