Financial wellbeing – 5 Common mistakes in financial management

  • The first common mistake in financial management is to rush straight into ‘a flurry of activity’ without first setting goals or doing any planning.  It is critical that your ‘flurry of activity’ is productive and prioritised towards achieving your goal of financial wellbeing.
  • The second common mistake is procrastination.  That is, doing the thinking, the talking and maybe even some planning but never getting around to doing any of the activity to make it happen.
  • The third common mistake is never committing plans and budgets to paper.  The problem with keeping it all in your head is that it is easily forgotten.  The plan in the head can easily change to follow an outcome.  The plan must be on paper, out there and shared.  That’s what makes it real for everyone involved.  The plan must come first and outcome second; not the other way around.
  • The fourth common mistake is learning (what passes for) financial management and wealth building from friends and family.  Unless the advice giver is a trained professional, the advice is next to useless.  Smart people surround themselves with much smarter people.
  • The fifth common mistake is to believe that debt is the answer to satisfying every immediate need.  Debt has its place in financial management but it must have a productive purpose; it always has to be repaid; and you must always maintain the capacity to repay it.

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Until next time!