I was recently on the elliptical at the gym, and I was watching a documentary on how they keep snowy and icy roads open in Canada. The show focused on a flagger and a man whose job was to clean up accidents by getting the vehicles back on the road after they had crashed and skidded out.One such instance was when a tractor trailer carrying crude oil skidded off the road and one of the trailers ended up on its side. He was going through his whole plan how to get the trailer upright, and then some kind of crisis happened. He said, “When you have a plan that doesn’t work, it’s best to take a step back and reassess. Sticking to a bad plan won’t solve the situation.”His quote struck me. How many times in life do we continue doing something that we know will fail, because we are unable to admit failure and move on? Whether with relationships, weight loss or a thousand other examples, most of us have a hard time breaking old habits. In fact, it’s those who can successfully change their character who are able to grow as individuals.After all, if we look at resolutions people make on Rosh Hashana or New Years that call for self-improvement, i.e. trying to improve a certain character trait, most people are unable to implement the change for more than a day or two. Why? I think part of the reason is that we are unable to take a step back and reassess.ChangeWhen it comes to finances, the inability to correct missteps can be quite costly. I can’t tell you how often I have meetings with couples I met with five years earlier who still can’t live on a budget. They just get stuck in a rut and continue making poor money decisions, intellectually aware of the harm they are doing to themselves but emotionally unable to make a break.Then there are those who come in complaining that they have made no money in the last five years on their investments. When they show me their investments, it’s what I like to call a “water-cooler portfolio.” A “water-cooler” portfolio is a hodgepodge of securities purchased because the client was told by a friend that a certain stock is a sure thing, and another was bought on a recommendation from some blast email. There is no rhyme or reason to anything in the portfolio and no overriding strategy that would help dictate what assets to own.Take a breathIf your financial situation is derailed, take a step back and start again. Start by understanding how much income you have coming in every month. Then figure out how much you are currently spending. If it’s more than you earn, you need to cut. It’s imperative that you live within your means. You will not spend your way to prosperity. I know I sound like a broken record, but the first line item in your budget should be to pay yourself first.Then sit down with a pencil and paper and figure out your short- and long-term goals. Your portfolio should serve as a conduit to enable you to achieve your goals. Your investments should be allocated in a way that will help get you where you want to be financially.Not all portfolios should be constructed the same way. If you are retired and your portfolio is all that you have, your investment allocation should look different than if you are 35 years old and your sole goal is saving for retirement.Break the inertia and reassess your financial situation.Be honest with yourself, and if change is needed, don’t repeat the same mistakes that got you into your current situation rather step back and start from scratch. The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc., or its firstname.lastname@example.org Aaron Katsman is a licensed financial professional in Israel and the United States who helps people with US investment accounts. He is the author of the book Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing.