The 10 Most Common Financial Planning Mistakes

Mistake 1 - You don’t know where to begin, so you don’t. Most people don’t know, so they never do. Sit down and list your and annual income and expenses and determine your cash flow.

Mistake 2 - You have a dream rather than a goal. If you say you want adequate financial security at retirement you have a dream. If you know you specifically need to have X dollars of income at age Y and that income must last for life expectancy of Z years you have a goal.

Mistake 3 - Because you’re afraid to take risk you risk it all. No risk no reward. Doing nothing is the greatest risk of all.

Mistake 4 - You want it all -- at no cost, in 10 minutes. The fast buck, easy solution mentality is symptomatic of so many who want to get rich quick! Accomplishing your goals and improving your financial health takes time, patience and determination.

Mistake 5 - Cover your assets. Never move on to the next plateau of risk until you have adequately protected the assets and income you already have. This is called risk management. When you can afford it, make sure you have adequate amounts of life and health insurance, disability insurance, auto insurance and long term care insurance.

Mistake 6 - Fall off your financial diet. After you pay your bills put aside a fixed amount or percentage of your income for savings and investment each month.

Mistake 7 - You lose sight of the bottom line. Only money you get to keep - after all expenses and taxes, is there to invest, or provide you with financial security.

Mistake 8 - You’re willing to repeat the mistakes of the past. Stop using credit cards you can’t afford. Cut down on consumer interest expense.  Pay off the cards with the highest rates and lowest balances first until all credit card debt is paid off and never borrow more than you need.

               

Mistake 9 - Throw up your hands when you see what it takes. Getting out of debt and improving your financial health takes patience, conviction and courage.

Mistake 10 - You want someone else to fix your financial problems. Life circumstances, mental laziness and a lack of financial knowledge are the major reasons most people have financial difficulty. GET INVOLVED and TAKE CONTROL of your personal finances and Trust no one to do ALL your thinking. No one cares more about you THAN YOU.