12/28/2012 03:46 pm ET Updated Feb 27, 2013

Just in Time For the New Year: Five Steps to Forgive Your Financial Self


Are you and your money prepared for 2013?! If not, you still have time.

As my friend-in-my-head, movie star Will Smith says, "You don't have to get ready, if you stay ready."

The best way to stay ready is to let go of all of your past financial mistakes, mishaps and missteps.

Everyone, I repeat, EVERYONE makes financial mistakes, ie: Donald Trump, Suze Orman, your parents, coworkers, friends and ME! Yes... me.

Many of you are unable to move forward financially, not because you don't make enough money, not because you don't have the resources, and not because your situation is un-repairable. The truth is, you have yet to forgive yourself for your financial mistakes, and as a result, you can't move onto greener pastures (pun intended).

Financial forgiveness is one of the first keys to becoming financially healthy in 2013. There are five steps that I have used to financially forgive myself. In my book, The One Week Budget, I reveal how I lost my job, squandered $20,000 on one BAD investment, and gained $35,000 in credit card debt, all in a relatively short period of time. It took me years to let go and forgive myself, but once I did, I was able to quickly put a plan in place, and successfully implement it faster than I thought possible!

The Five Steps to Financial Forgiveness are:
1) Admit
2) Identify
3) Tell
4) Focus
5) Plan

1) Admit:
Confess; say "I messed up when I __________." Feel free to substitute the word "messed" with your verb of choice. I found that by admitting my mistake, I was able to take ownership of it. The good thing about owning up to a problem is that it officially becomes YOUR problem, and gives you the power to fix it. One of the reasons you haven't been able to move forward in 2012 is that you haven't fully acknowledged your mistake, until now.

Remember, you've messed up, I've messed up, we've all messed up, that's all. Mistakes happen and admitting it to yourself is essential if you're going to get over it.

2) Identify (what and why):
Take a break from beating yourself up for a minute and clearly identify your mistake and why you made it. Sometimes we get so caught up in feeling guilty, that we're not even clear what we're feeling guilty about. I suggest you write down your money mistake(s). For example: (what) I, Tiffany "The Budgetnista", took out a $20,000 cash advance on a credit card, (why) to use to "invest" with a "friend" of mine, because (1) I wanted to help my parents out financially, (2) I didn't understand the principles of investing. Yup! See the bonus chapter of my book, Debt and Credit: My Story, for the gory details.

3) Tell:
Okay, so this may be a tough one for some of you, but tell a trusted confidant. It took me a year to finally break down and tell one of my best friends how I'd lost $35,000 in less than two weeks. Do you know what my friend Linda said when I told her? "Awwww, that's ok Tiff! We all make mistakes." She was so kind, and to my surprise, a bit nonchalant about the whole thing. I'd been carrying around my secret shame for a year, thinking that everyone would be horrified that "The Budgetnista," had made such a catastrophic mistake (or at least that's what I told myself).

There's a proverb that says, "Fear makes the wolf bigger than he is." Linda helped me to realize that although I'd made a mistake, just like December 21, 2012, it wasn't the end of the world (come on, I had to do at least one apocalypse joke). I suggest that you find your own Linda, and start confessing in

Woooo Saaahhh! Now that you've admitted your mistake, identified it in writing and told a friend, it's time to prepare to release it. The next two steps will help you to completely move past your financial flub.

4) Focus:
So the truth is out, and it's time that you focus on what IS, vs. on what ISN'T. Refer back to what you wrote in Step Two and write down some possible remedies to your mistake. Don't make yourself crazy with this step; let the ideas flow without hesitation. Remember, you're not solving the world's hunger issue, you're just quickly writing down possible solutions to your financial problem. FYI, don't wait to do this exercise, start now. This is not a suggestion.

5) Plan:
Once you've drafted your list of possible solutions, pick one and begin crafting a plan. Not sure how to start or what to do? Google is your Guru. Remember that any financial problem that you've ever had, or ever will have, is not unique to you. Someone "out there," somewhere, has made a similar mistake, solved it and shared it with the world.

For example, if your money solution involves creating a budget, you can read Day 1 of my book, The One Week Budget for FREE on my site, and begin crafting your budget today! The road to fixing your money mistake may only be a click away, so Google your problem with pen and paper in hand. Choose a solution that speaks to you, research it's effectiveness (use Google again), and get started!

The road to financial freedom begins with financial forgiveness. Let go, move forward and grow wealth in this New Year!

Live richer,

The Budgetnista

(Dispenser of FUN, financial literacy. )