The 3 Most Common Money Mistakes That Young Families Make


Most families want more Financial Freedom. They want more money so they can have more time and more fun with their family.

Unfortunately though, most families don't have the level of Financial Freedom they want due to a few common money problems. Problems which cause them lots of frustration and stop them from having more freedom. After working with over 1,000 clients since 2010, I've found that many young families seem to struggle with the same three common money problems.

  • Tight cashflow - they lack structure and control with their spending which makes it hard to cover their living costs and save for the future.

  • High debt levels - they have too much debt in the form of credit cards, personal loans, car loans and mortgage debt. This creates high levels of stress and contributes to their tight cashflow.

  • Low asset (savings) levels - they don't set aside enough money to grow for the future and become financially free. This means they stay trapped in the rat race, working hard to go nowhere. Tight cashflow and high debt levels are a big reason this happens.

But these problems don't just happen on their own. They come from mistakes. And as these problems are quite common, so too are the mistakes that cause them. The 3 most common money mistakes that I see young families make are;

No Vision For Their Future

The first mistake many young clients make is not having a clear vision or sense of direction for their financial future. This lack of direction leads to lots of meaningless spending. By not knowing what they want to achieve, when they want to achieve it or why they want to achieve it, many families lack purpose with their money and so they just end up wasting a lot of it on going nowhere.

A lack of vision can also hurt young families who try to make plans because whatever plan they make usually won’t guide them in the right direction. That's because they haven’t spent the time getting clear about what they want, so, they end up following other people’s plans and heading towards other people’s goals instead. They do what they think is "right". But unfortunately, what is right for others can be wrong for them. In order to make a good plan, you must fist work out what YOU want to achieve and why YOU want to achieve it so you can make a plan that is best for YOU.

No Plan For Their Finances

The second mistake many young families make is not making a plan for their money. Of course, without any clear goals for their future, it seems obvious they wouldn’t have a plan in place. But I’ve met many young clients with big dreams for their future and no plan for making it happen. And failure to plan is just a plan to fail.

Many young families make a plan for their career, their social activities, their weddings and even their holidays but for some reason they dismiss making a plan for their money. Which is pretty ironic when you think about it because money is the fuel needed to fund a lot of those other plans. Without a plan for their money, making smart financial decisions becomes very tricky. It makes it hard to know what to do and when to do it. Having no plan for their money often means they have no idea what they should do so they end up doing nothing or doing the wrong things.

No Ongoing Effort to Make Progress

The third mistake many young families make is not sticking to a plan long enough to realise the results. Again, if they haven’t set any financial goals then it’s likely they won’t have a plan and won’t have anything to stick to. But, on some rare occasions, I have met young clients who set themselves clear financial goals, create a plan for achieving those goals and then still fail because they don't stick with their plan long enough to succeed.

A lack of ongoing effort means young families never receive the benefits of the plan they made. They never improve their financial situation and they never achieve their goals. What young families need to understand is that there is no such thing as 'Set and Forget' strategies, despite what they might have heard. They can't be passive with their investments or finances, just like they can't be passive with their career, relationships or health. If they want to make progress in any of those areas of life they have to be proactive.

Therefore, creating a plan and not sticking with it is like starting a diet and then stopping before you lose the weight - it's pointless. A plan is the start of the journey, not the end. It's your GPS for getting there. You don't put the destination details into your GPS and then count that as the end of the journey so make sure you don't do that when it comes to your Financial Planning...

How All Three Mistakes Link Together

In my experience, these 3 money mistakes are all interconnected. Without a clear vision for the future, having a plan and sticking to it is very unlikely. Likewise having a plan without a vision is usually a recipe for low motivation, low levels of effort and minimal progress. And finally, without a clear vision and plan, many people end up spinning their wheels by putting too much effort and hard work into the wrong things, which leads to lots of wasted time and money.

In order to succeed financially and achieve greater levels of Financial Freedom, young families need to address all three of these mistakes in the correct order. And that is exactly what the Moneyfulness Method helps young families to do. We use this method to help our clients address each one of these common mistakes so they can maximise their money and make more time for their family.

To find out more about the Moneyfulness Method click this link and keep an eye out for future blog posts about it by following us on Facebook and Instagram.

Cheers,

Blake

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Blake Fitzgerald of Coached Financial Planning (ABN 28 452 214 548) is an Authorised Representative (1236826)

of Financial Force (AFSL 238 337)

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