As some of you may know, I'm writing a book! And it's my hope that this book will help families to improve their Financial Planning so they can enjoy more freedom in life. While I'm writing the book, I thought it would be helpful to share some of the chapters with the world.
The 3 Most Common Money Mistakes That Families Make
After having worked with over 1,000 clients since 2010 I’ve learned that the 3 most common money problems that families face come from the 3 most common money mistakes that families make. So what are these mistakes?
Mistake #1) No Clear Vision for Their Financial Future The first mistake that many young families make is not having a clear vision for their financial future.
By not having this clear vision, they lack direction or purpose with their money. And this lack of direction and purpose often 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 just end up wasting their money and don’t do anything to set themselves up for the future.
A lack of vision can also hurt young families who try to make a plan or do the “right” things with their money because whatever plan they do make usually won’t guide them in the right direction. This is because they haven’t spent the time getting clear about what they really want, so they just end up following other people’s plans which often leads them towards other people’s goals rather than their own.
Mistake #2) No Personalised Plan for Their Money The second mistake many young families make is not making a personalised plan for their money.
This mistake often relates to Mistake 1. When families don’t have any clear goals for their financial future, it’s highly likely that they wouldn’t make a financial plan for their future. However, I’ve met many young families with big dreams for their future and no plan for making it happen. Unfortunately, without a plan in place, their dreams will remain just that.
The fact that so many young families don’t make a plan for their money is very surprising to me given the fact that many of these same families make a plan for their careers, their social activities, their weddings and even their holidays but for some reason they dismiss making a plan for their money. When you stop and think about that you realise it’s pretty ironic because money is the fuel needed to fund a lot of those other plans.
Ultimately, without a plan for their money, making good financial decisions becomes very difficult because these families have no idea what they should be doing. They don’t know where to start or who they should follow which means they end up doing nothing, or worse, doing the wrong things.
Mistake #3) No Ongoing Habits The third mistake many young families make is not adopting good ongoing habits or sticking to their plan long enough to achieve their goals.
Again, if families haven’t set any financial goals then it’s very likely they won’t have a plan and therefore won’t have anything to stick to long term. But, on some rare occasions, I have met young families who set themselves clear financial goals, created a plan for achieving those goals and then failed because they didn’t stick to their plan long enough to actually succeed.
We all know that if people want to be healthy, they can't just exercise once or eat healthy once and expect to be healthy forever. Good health requires good habits. Well, the same is true when it comes to wealth. Yet, all too often, young families have bad money habits which hold them back from living the life they want, both now and in the future.
As mentioned above, these three common money mistakes are what cause young families to struggle with the three most common money problems. These mistakes lead families into having a lack of meaningfulness with their money. And when families don't have any meaningfulness or purpose with their money, they often fall into the trap of having money come in and money go out, but they don't really go anywhere. Therefore, if families want to fix their financial problems and move away from the Financial Frustration Zone and move towards the Financial Freedom Zone, then they must address each one of these common money mistakes and create more meaningfulness with their money.
And that’s where the Moneyfulness Method comes in. It’s a 3-step method which I developed to help young families minimise these common mistakes, so they can maximise their money. I use this method with all of my clients to help them manage their money with more meaningfulness and maximise their money for what matters most to them.
In my next post, I'll be sharing an overview of what the Moneyfulness Method looks like from a big picture perspective.
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