Today is both International Women’s Day and the last day of Women’s Money Week. Thanks so much to Jackie and Elizabeth for hosting once again. It’s been an honor to participate. Look for my favorite post from each day in tomorrow’s round up.

The theme for Friday is Future Planning and Financial Planning

“Those who cannot remember the past are condemned to repeat it.” George Santayana

As an undergrad, I majored in History, so it should not be surprising that I am a firm believer in knowing where you have been. When it comes to personal finances, I think understanding your past is the key to planning a successful future.

One of my earliest posts was A Budget is NOT the first thing you need, and it’s advice I stand by now. I can create a budget that requires me to spend less than $75 at CostCo, but if I’ve never been able to get out of that store for less than $100, I am going to fail. I cannot plan for success if I ignore all of my past’s failures.

We have to admit the truth to ourselves. We are where we are in life because of our past, because of the mistakes and the right decisions, the bad luck and strokes of good fortune. If we can be honest with ourselves about where we came from, then we have a much better chance of making the changes we need to make to get where we want to go.

Your paths in life, whether they be career, financial, or otherwise, need to include ways to play up your strengths and work around your weaknesses. None of us is ever going to be perfect, but if we can admit to ourselves where we are likely to fail, then we can build safety rails into our plans.

People who know they simply cannot manage their credit cards responsibly cut them up, or store them literally frozen in a block of ice, for emergency purposes only. They do this despite knowing that you can come out ahead financially by playing the credit card rewards game. Because for them, having the card available is too much temptation to resist, so they take it off the table.

I know that I cannot handle cash responsibly. I just can’t. If it’s not in the bank account, it’s already spent in my mind. So when I have cash, it trickles through my fingers, a little here, a little there, and then it’s gone, and I cannot honestly tell you what I spent it all on. Knowing this about myself means I will never use the “envelope” system, where people pull cash out of their accounts for all their monthly needs and just spend from that. I could try to force it to work, but I would just end up mad at myself every single month when the cash ran short.

I also know that if I force myself to go too long without spending a little something on myself- be it going out to dinner or getting a pedicure, there will come a day when I fall off the wagon big time and go spend more than a few hundred on me. I’ll be mad at myself, unhappy with what I bought, and further in the hole I was trying to dig myself out of. So instead, I built an allowance into my budget. It’s not a lot of money each month, but it’s enough to let me do something for me every month, or save for a couple of months for something big. Because I know that I have the option, I don’t feel trapped.

I apply the same thinking to planning the next step in my career. When I am looking at job postings, I cannot just ask myself “can I do this”. I also have to ask “will I enjoy doing this”. Because if I won’t, I will be miserable in that job. I have taken enough jobs in the past just because I needed the job to know this. I’ve quite jobs with absolutely no future job prospects because I was so miserable where I was. I do not want to put myself in that same position again.

So when you’re sitting down to plan out your future, be it your budget, big financial plan, or next step in your career ladder, be honest with yourself about where you have been and how that shapes where you want to go. After all, your past successes and failures are what made you who you are today, and I’ll bet you’re pretty awesome.