How To Get Over Lost Money: Dealing With Financial Loss

Man Dealing With Financial Loss
Photo by Andrea Piacquadio
How To Get Over Lost Money

Plenty of us have been in a position, where all of a sudden we lost of larger sum of money due to an unforeseen event or because of a de mistake. It can be a result of a poor investment, something valuable breaking or being stolen, or simply losing your wallet with money inside of it.

It can sometimes be very rough dealing with financial loss. The immediate gut-wrenching feeling of panic, guilt and sadness. You may even experience physical symptoms, such as stomach pain and nausea. It's far from great.

So how do you get over lost money? We'll share our advice at Investors Psychology below.

Dealing With Financial Loss

There are different aspects of how you can get over lost money. There's the emotional side to dealing with financial loss, its usually the most difficult, but there's also the practical part of it. 

Having the tools for coping with both aspects is essential to move forward, as the practical aspect heavily influences the emotional part, and vice versa.

The Practical Aspect

Here are is main pieces of advice for better dealing with the practical aspect of financial loss. 

1. Investigate Your Insurance Policy

Unfortunately an lost or stolen money insurance is something that needs to be set up in advance. However, not everyone is aware about all parts of their insurance policies. As such, you should always contact your insurance company and check the terms and conditions of your insurance - it might get you some money back. 

Another related advice is to have a travel insurance covering lost or stolen money when you're abroad.

Recommended Article:
Buying on Credit: Meaning, Benefits & Drawbacks

2. Always Have a Buffer

Another preemptive piece of advice - make sure you don't live above your means, and make sure you always have a buffer of money, in case of an emergency like this. 

Optimally, an emergency buffer should cover 3-6 months of living costs, and that that money should be freely available and not invested in stocks or funds. With that a lost phone could easily be quickly replaceable and a poor investment decision wouldn't cause any practical difficulties in the short term. 

3. Claim Investment Losses on Taxes

In case your financial loss is related to an inadequate investment decision, then you might be able to claim investment losses on the taxes and at least get a part of your money back. This usually means that losses can be deducted against investment gains. Check the exact laws of your country to make sure if its possible. 

Dealing With Financial Loss
Our infograph on how to deal with financial loss.

Dealing With The Emotions

In many cases, the more difficult part of suddenly losing a larger amount of money is how it makes you feel. Here are some points to emphasize when dealing with financial loss that can make help you with how to get over lost money.

1. Gain Perspective

Try to put the lost money in perspective, it can help if you discuss the topic with someone you can trust. After all, life is often about gaining perspective. You may have lost $500, but try imagining it was $5000, (or $5000 vs $50,000 - and so forth). The circumstances could have been slightly different, but resulted in a lot more money lost.

Moreover, there are those who have lost everything to their name, multiple times, and still recovered. You're doing better than most as long as you have roof over your head, running water, and food on the table.

Recommended Article:
The Psychology of Money: 10 Takeaway Points

2. Learn From The Mistake, But Move On

Take responsibility for what happened and try to learn from the mistake that lead up to you losing your money. Analyze what happened, make sure you know how to avoid to repeat the same mistake in the feature. Ideally, analyze it, learn something, write it down, and then move on with your life. 

Dwelling on the mistake will only keep your head going in circles from overthinking, leading you down the path of poor mental health.

3. Forgive Yourself

This is related to the previous point - Make sure to not be too hard to yourself, don't dwell on this financial loss. We're humans, and humans makes mistakes. In fact, consumers lost $5.8 billion to fraud last year, thus you're not alone in having lost money and feeling stupid about it. Forgive yourself and just make sure you don't do the same mistake repeatedly.

4. Mind Over Money

Make sure to prioritize your mental health. In the end, money is just something we trade for physical goods or services. In the end, money can't buy happiness and the lost money should not consume your mind. 

There are certain things you can do in order to take your mind off what happened and help you get over the lost money. We strongly suggest everyone learn how to stop thinking about money. In summary, those suggestions include meeting up with good friends or loved ones, going out and enjoying your favorite food, or engaging yourself in physical exercise. This will promote a state of mind that lets you move on and lead a good life, despite the loss.

Sign up for free and receive invaluable advice about the psychology behind successful investments 📚 💰

Popular Posts

Therapy When You Have No Money: Coping with Life's Challenges on a Budget

Image
Therapy When You Have No Money Life can be tough, and we all face challenges that can leave us feeling overwhelmed, anxious, or even depressed. In an ideal world, we'd have the means to seek professional therapy to help us navigate these rough waters.  However, when finances are tight, and the prospect of affording therapy seems like a distant dream, what can you do?  This the though reality of an increasing amount of individuals, especially with the worsened financial climate. This InvestorsPsychology attempts to provide some alternatives for therapy on a budget. Photo by Towfiqu barbhuiya at Pexels.com Seeking Support on a Tight Budget One of the most important steps in bolstering and protecting your mental health is making sure to talk to someone about your problems.  Speaking to others not only eases the emotional burden of your struggles, but also forces you to reflect and gain valuable perspective, which is a vital component in recovery from poor mental health. Below are so
Read more

Market Cycle Psychology: What You Need to Know

Image
Market Cycle Psychology Market cycle psychology is an interesting phenomenon. The price trend in different markets tend to follow certain patterns (whether it's stocks, commodities, housing, or cryptocurrencies). This holds especially true in a so-called market bubble . Market cycle psychology is not an exact science but can roughly be explained by the nature of human psychology in relation to fear and euphoria, as well as collective thinking .  Fear and euphoria play an important role in investors psychology in general.  Fear of regret , for example, is a well-known concept that refers to the human mind anticipating regret and subsequently avoiding it. The infamous FOMO, also known as fear of missing out , is strongly dictated by fear of regret. Strengths and Shortfalls of Market Cycle Psychology Understanding the concept of market cycle psychology can be beneficial on a macro scale when determining in what strategic direction you want to take your investments. Knowing in what pa
Read more

Stock Market Psychology: Use it To Your Advantage

Image
Stock Market Cycles Chart Stock Market Psychology Grasping the stock market psychology is not too hard, but many investors are unaware of its existence or thoughtlessly neglect it while planning their investment strategies.  For long it was thought that the stock market must act rationally and sooner or later correct itself. Some investors still hold onto this belief, which is known as the " efficient market hypothesis ".  However, in modern times market psychology has been prone to more in-depth research. Nobel prize-winning Daniel Kahneman was one of the first economic researchers to doubt the validity of the efficient market hypothesis. Together with the famous cognitive and mathematical psychologist Amos Tversky they challenged the notion that the markets would always make rational decisions made on relevant and publicly available information. They made the case that humans suffer from a palpable cognitive bias when it comes to financial decision-making and specifically
Read more