Financial Stupidity

Financial Stupidity

Financial stupidityHere’s the audio, if you prefer to listen:

Financial Stupidity


That’s not a word we use very often when we’re talking about somebody else.  In fact, it’s one of those words we tend to reserve for ourselves.

“Sharon, how stupid can you be?”

“Boy, were we stupid to fall for that one …”

While it’s not that bad a word, I think I remember hearing my mother tell me it “wasn’t nice” to call someone stupid.

But how many times can you remember telling yourself that, with that little voice in the back of your mind?

“How stupid of me not to see that the housing market was going to crash.”

“”How could I be so stupid not to be watching what was in my retirement funds?”

We also seem to use the word most often when we’re talking (or thinking) about money and finances.  So let’s look at the concept of “financial stupidity.”

Financial Stupidity

When the world economy collapsed in 2008, there had been plenty of signs picked up by those who watch financial and economic markets.  The housing bubble had burst in mid-2006 … but government and financial experts kept reassuring us it was nothing … and it was easier to believe them.

Then we had the sudden collapse of two Bear Stearns hedge funds in June 2007 and all sorts of consolidations, remember?  Banks and other financial institutions started eating one another up.   (How many times did the name of your bank change?)

But, despite the whispers about brokerage houses like Lehman Brothers struggling and noises about Freddie Mac and Fannie Mae being crippled, few were listening.  And the perception of prosperity that many Americans had enjoyed for years would turn into a different—and bitter—reality:   we had spent, borrowed and fooled ourselves into a false sense of security.

We wanted to believe that if there was prosperity at that moment, it would last forever.  But it didn’t.

There was plenty of financial stupidity to go around.

Moving On From Stupidity

Few of us have remained untouched:  millions lost their jobs, equity in homes evaporated, foreclosure rates skyrocketed and retirement savings collapsed.  And despite the passage of time—and trillions of dollars thrown at the problem—many are still hurting.

Many of those who aren’t hurting enjoy one major differentiating factor:  they called themselves “stupid,” beat themselves up momentarily, looked for the lessons to be learned and forgave themselves.  Then they reinvented themselves in ways that reflected the new economic reality and moved on.

Staying trapped in guilt or anger serves no purpose.  Holding on to things that were unaffordable in the best of circumstances—when those circumstances have not (and probably will not) return—is a recipe for even more pain.

Where in your financial life are you stuck in the “stupid zone,” still blaming yourself for not seeing what most everyone else missed too?  Where have you not allowed yourself to move on, to a new solution that works in this still-undefined economy?

If you find anything, stop.  Define the lesson.  Forgive yourself.  And let it go.

No doubt we’ll still hear ourselves saying “how stupid can I be” in our heads as we move forward.  Maybe that’s human nature.  But don’t ever let that become a belief that paralyzes you.  Remember:  stop, define the lesson, forgive yourself and let it go.

Let me know in the Comments section below what you’ve been able to “release” since the economic tsunami that hit us almost four years ago …

Bio: Sharon O’Day lost everything at age 53: her home, her business, everything. But how could that be? She’s an expert in global finance and marketing with an MBA from the Wharton School. She has worked with governments, corporations, and individuals … yes, she was the secret “weapon,” if you will, behind many individuals in high places. Yet she did! Since then, with her finances completely turned around, Sharon has gone on to interview countless women. She’s done extensive research to understand how that could have happened, especially with her strong knowledge of numbers and finance.

The surprising answers are shared in her posts, articles and an upcoming book. Today her mission is to show as many women as possible how to become financially free for the long term, through her coaching programs. She has developed a step-by-step plan to get past all the obstacles that keep women broke and scared … and from reaching the financial peace of mind they so deserve … if they’re willing to do what it takes!

  • dennyhagel

    Thanks for the reminder to be kind to ourselves…as you know our family business is in construction owning a very successful business for over 20 years when things went south in the economy. It is so easy to look back to the time we were able to enjoy a four day work week with money to spare. We thought we were doing the smart thing and investing in real estate only to find ourselves now in a position of working seven days a week to keep from losing what we deemed our retirement plan. Hindsight is always 20/20…

    • I know how the collapse in the construction market affected your family business, Denny. I also know how you two have shifted your focus to live and work within the new reality, and to do what’s needed to be back on track!

  • What memories your article stirs up! You’ve captured the flavor of that era in world history, for certain! I can look back on lots of “stupid” things I’ve done but I hadn’t thought to forgive myself for financial mistakes. Mostly, regarding that era, I feel “lucky” because we sold our home just before the crisis hit hard. I’m taking a moment, right now, to activate your lesson!

    • Funny how we’re willing to forgive ourselves for lots of things around relationships, etc., but don’t think to do so around money! And they’re all simply the consequence of decisions we make … 😉

  • Another great article Sharon. I totally agree –
    Staying trapped in guilt or anger serves no purpose…and we always should –
    stop, define the lesson, forgive yourself and let it go.

    • It’s so easy for guilt or anger to embed itself in our minds … quietly … but it really can keep us from changing a behavior and/or moving on …

  • Great article Sharon and title is perfect. Having guilt or anger will not move me closer to my goals and learned that a long time ago. So moving ahead with it. Thanks for sharing.

    • I love that you are always moving forward, Carol. As you’ve said elsewhere, sometimes faster than at others, but always moving forward!

  • olga hermans

    We have made some really dumb decisions in our life and some not as bad, but you keep wondering “what if”; it doesn’t bring us anywhere…but life itself is a great teacher. During the years we have become wiser though, but there have been decisions and choices that we have regretted. It is the way it is and now it’s time to loof forward…thanks Sharon!

    • We usually make those “dumb” mistakes because that’s all the knowledge or information we had at that moment … which leads to the expression ‘hindsight is 20/20.’ Or maybe some emotional or outside influence got in the way of a good decision. But can you see how the strongest path forward is to simply learn how and why you made that decision, then let it go? (I know you do!)

  • Pat Moon

    Sharon, I have to admit we have felt stupid so many times in the past 4 years. We are trying to move on, down-size, and regroup but it is sure difficult in this real estate market. With the daily reminders of not being able to pay the bills it really is difficult to not feel stupid financially but I do agree that we must forgive ourselves and trust God to provide us with the wisdom to make wise decisions in the future. Thanks for the article.

    • Pat, I have to admit that you came to mind as I wrote this article, because I’ve heard your battle in other comments. As tough as it is, we do need to assess what led us to the bad decisions (could easily have been what got everyone ELSE into the same soup!), learn from it, then wipe the slate clean. To rebuild, you need all your focus on the present and the future, not on any emotions that drain you. Step by step. I know, I know. But you’ll get there …

  • Some times forgiving our self is hardest!

  • As someone who lost everything through alcoholism I spent a lot of time beating myself up about the money I’d wasted. Then I realised that regrets were a form of self indulgence that I could afford and I had to accept the past and leave it there. That experience of starting over though has given me a much healthier outlook on managing finances and now I can look at the banks and realise I wasn’t the only stupid one! 🙂

    • Carolyn, when I hit the wall financially, I did a quick calculation of how much I had made in the prior 30+ years. Then I looked at what I had. If I hadn’t forgiven myself for my past choices and decisions, I could never have moved forward. And that’s where my financial life did a 180-degree turnaround … so I know you know what that feels like!

  • cathsj

    Totally agree. Yesterday is best seen as a lesson. Guilt is just an excuse to avoid moving forward.

    • You’re right, Catherine. I really like your expression “Yesterday is best seen as a lesson.” Thankfully there are bunches of lessons there from positive things too! 😉

  • “Define the lesson. Forgive yourself. And let it go” is great advice Sharon and not just when it comes to financial matters but for all of life’s mistakes. Many times we can get stuck in “beat ourselves up” mentality and that mentality prevents us from moving forward.

    • Karla, that’s true, finances are no exception. In fact, they say “How you do anything is how you do everything,” so we can apply “anything to everything.” 😉

  • Yep, it’s easy to continue to blame ourselves for not seeing the end coming. It was a harsh shock to see the devaluation of our portfolio and one I still don’t like to look at 🙁 I’m trying to look at it as a lesson, but sometimes it’s not easy. And, was it our “fault”? Not really. Things happen. Things change. I’m trying to roll with it!

    • Very few saw it coming, Martha, so I hope that devaluation didn’t paralyze you. Some markets have come back, although real estate has not. No loss is ever easy to just “erase.” But inaction is so counterproductive …

  • Love this part of your message, Sharon “Stop, define yourself, forgive yourself and LET IT GO”…very powerful words, my friend…

  • it is so funny that I get so mad at myself about money issues. nothing else.. all other goofs are okay! Thanks I needed this one!.. I really enjoy reading your blog!

    • Hope it helps you put money issues in perspective, Elizabeth! They’re screw-ups just the same … no more, no less. 😉 Be gentle on yourself!

  • Nancy

    You know, I beat myself up around money mistakes all the time. While I might not call myself stupid, I carry this shame and guild about bad past investments, the amount of money I spent on things that didn’t work and not keeping better track of where my money is going. Thank you for helping me see how unforgiving and harsh I’ve been.

    • One of the questions I had to ask myself, Nancy, is whether I’d get any of the money back that I had thrown at my businesses, etc., by beating myself up. Once I understood it would do no good, I figured the only thing I could do was learn the lesson the best I could … and do better next time. (Plus, make the money to replace it …)

  • Lisa Birnesser

    This was such an excellent article, Sharon. A couple of years back I was beating up on myself for poor money decisions. Your words really put things into perspective. Staying trapped in guilt and anger really doesn’t serve anyone. Thanks for your wise words!

    • And it feels so darned good when you forgive yourself … for all that stuff you can’t change anyway!

  • marierleslie

    It has taken me a long time but I have finally been able to accept where I am and stop beating myself up over and over for past mistakes. I believe that continuing to rehash the past keeps you there and keeps you from moving forward and being smarter. Now if I could just help my husband learn to do that. . . .

    • It really does work the way you say, Marie. In my mind, it makes so much more sense to at least learn something from the mistakes so we don’t repeat them. Then put our energies into a whole new mindset about finances. If you get proactive about it, you just might be surprised when your husband inches over to your point of view … 😉

  • I used to call myself “stupid” a lot, a lot! Now, when I do something “wrong,” I call myself “silly.” I like when I am silly, so that’s not a putdown at all!

    • Great shift, Meryl, because we ARE going to make mistakes … hopefully just not the same ones! 😉

  • Jamie

    I lost my house when i went through my divorce. Yes, I made a bad decision to buy a home at the time I did, but I never once called myself stupid. It’s a word I don’t like using anymore. When I was younger I used the word all the time, but I realize the word just isn’t worth it.

    I recognize that the economy went downhill, and we all struggled through it. Some came out ahead, others far worse, but I was able to pick myself back up and move forward.

    • Love the inner strength, Jamie. Truth is, life is all about picking ourselves up and moving forward … and growing in the process. BTW, I remember “stupid” as a word we used on the playground as kids, not realizing the harm it could do. And I know adults marked by less-than-enlightened teachers. You’re right, it’s not worth it …

  • Thanks for that Sharon! It’s hard to forgive yourself, but worth it!

    • You’re right, it’s absolutely worth it. Without it, we’re stuck in that same energy …

  • Oh boy is that “I’m so stupid” self-talk so easy to do! Your advice, “stop. Define the lesson. Forgive yourself. And let it go,” is the perfect mantra to jar us out of that kind of talk! Thanks so much, Sharon.

    • You’re very welcome, Lisa. So many of us don’t think to link forgiveness with our money mishaps … whatever their source. But it makes a huge difference …

  • I listened to the audio on this one, and am glad I did. Your voice is clear, kindly and persuasive. I will hear the echoes of your saying “Let it go” throughout my day ….

    • I hope it helps you do just that, Diane. That little process is very different from not accepting personal responsibility for our lives. It simply acknowledges that sometimes we don’t know … and sometimes we just plain screw up. (The lesson’s the key …)

  • I am a brand new member of Honor Your Feminine Greatness and I look forward to getting to know you – I also VERY much need to spend some time on your site! Please connect with me on facebook as well!

    • Happy to connect with you on FB, Carol, and I too look forward to getting to know you better through HYFG! Feel free to meander through my site; I do my best to put actionable, solid content up in order to help women take control of their finances …

  • Cathy |

    Your words – “stop, define the lesson, forgive yourself and let it go.” can apply to so many areas in life. I was fairly careful during the recession in that I had invested in several types of funds. I was painful to watch them go up and down. I have learned a good lesson from the whole experience. We do the best we can with what we know at the time. Thank you – great post.

    • Sounds as if you shielded yourself from the worst of the market tumult, Cathy, and hopefully you’re able to recuperate going forward. Lots of people learned lots of lessons from that experience! (And, sadly, some learned nothing at all …)

  • Gretchen Pritts

    Oh love this! No matter what we are doing, paying attention to how often you say that word is surprising. I guess the key is to stop and pay attention. Thanks for the reminder.

    • I, too, was surprised at how easily I used to use it, Gretchen. And I’ve had conversations with several readers who weren’t aware how easily they still use it. (Hopefully much less, after this article … 😉

  • For some reason it seems easier to keep looking back in the past and beat ourselves up for things rather than taking the lesson, regrouping and just moving forward. I’ve been terrible about that over the years, but have been doing much better at it. Changing old thought processes is hard and forgiving ourselves is hardest of all!

    • Keep working at it, Lisa. It’s absolutely critical in order for you to get momentum going forward. It’s also like a muscle in that it develops … and gets easier and easier. Let me know if I can help with anything!

  • It is so easy to be critical of ourselves and others than to be grateful and give thanks. I learned from Tony Robbins years ago…when something we deem “bad” happens, take the time to ask “Whats good about this”..It changes all the answers:) Great post Sharon!

    • While we might slip at times, Anita, if we can revert to the positive angle on things, it leaves the path forward “wide open.” When we don’t, we’re creating our own obstacles and barriers …

  • It’s so easy to beat yourself up. My mantra for years was “I’m so stupid” because of past choices. Moving forward is scary so it was easier to stay put, and wallow in the guilt. No more though. I am getting better, and intend to be a force to be reckoned with. Thanks for another thought-provoking post Sharon!

  • Awesome Post Sharom. I love your Blog and all that you remind us of!

    • Thanks, Elizabeth … especially for sharing them with your followers as well!