In preparing for the call that I’m hosting next week, I’ve been spending a lot of time thinking about my clients and the struggles that they have when they first begin to work with me.
And while I’ll be sharing the top 10 most common financial mistakes that I see on the call next Tuesday, today I wanted to share with you 3 very common mistakes that I see. In my mind, there’s no time like the present to get you started thinking about the possibility of financial freedom!
Mistake #1: Not understanding the financial conversations that hold you back – In working with all of my clients, there is usually a desire to learn new ways of managing their money which is obviously an important part of overall financial health. However, what is often missed is taking the time to truly understand how you grew up around money; what are the underlying beliefs you have about money; and what are your financial fears – in a nutshell, what is your money mindset? Without awareness and understanding of the beliefs that hold you back, often times the day-to-day money management practices are sabotaged as these beliefs run around in your head sabotaging you unconsciously. As a personal example of this, I wasn’t aware that I had a belief that “financial security comes from a paycheck and benefits” until I considered working on commissions in someone’s small business several years ago. Without having taken the time to see that this was true for me, I wouldn’t have been able to shift that belief so that eventually I could step into entrepreneurship and own my own business.
Mistake #2: Lack of awareness around financial opportunities and challenges – Creating a new relationship with money largely consists of establishing new financial habits and routines, one of which is to consistently be present to where you are financially speaking in any given moment. What are your financial opportunities? What are your financial challenges? In being up front and honest about where you stand, you can clearly understand your starting point and then map the next steps forward. Understanding your financial opportunities and challenges is much like finding out what to program into the “point A” of your “financial GPS” – you’re more likely to get where you’re going if you know the direction you’re coming from!
Mistake #3: Living life without a financial plan – If you’ve got a “point A” for your financial GPS then you need a “point B” too, right? So many clients that I work with live in what I affectionately refer to as “the Bermuda triangle of finances”, with 3 common and consistent issues that keep them spinning: 1) making good money and not understanding where their money goes; 2) living with a significant amount of consumer debt from living beyond their means; and 3) limited (or no) liquid savings. This formula is a recipe for financial stress and chaos, and in order to move beyond that it’s important to have a financial plan that allows for you to handle your commitments in excellence while planning for the future (i.e. paying off debt, building a savings account, etc.). So many people that I meet and talk to muddle through their day thinking that financial stress is just a part of life – and I can absolutely tell you that it doesn’t have to be that way if you take the time to draft a detailed plan to manage your money and use it to support the things in your life that you’re up to!
While there are many more mistakes that I see people making that I will share next week on the call, these 3 mistakes are the most common and overarching ones that I see happening that keep people from living as abundantly as they would like to.
Each year millions of people make resolutions to strengthen their financial foundation and improve their financial health, so what financial mistake will you address in 2015 that will have you feeling more empowered when the calendar turns to 2016?