Not Having a Plan

The biggest error most people have is not having a plan. If you don’t identify what you want to achieve and a basic method to achieve it, it is extremely unlikely to happen. A recent study indicated that those with a plan are 10 times more likely to achieve a goal. This improved further if the plan was shared with others.  Easy solution, create a plan, better still work with a Financial Planner to put together an actionable plan to achieve your goals.

Ignoring Bad Behaviours

Many are in denial of many of their bad habits. If you don’t acknowledge areas that need to be improved it is difficult to correct them. The most common behaviour ignored is overspending on discretionary items. Identify areas for improvement, and then aim to change these habits.

Failing to Keep Track of Your Finances

Many people have very little idea of their financial situation. It is common for people to be unaware of how much they have in Superannuation, What they owe on their mortgage or how much life insurance they have in place. Many have no idea which company is responsible for those things, much less what options they have selected. Most people have no idea what their living expenses are and therefore are unable to identify how much of their income is being spent on both discretionary and non-discretionary items.

Not only is it impossible to plan without accurate information, it is likely that you have inappropriate products, paying too much in interest and premiums and likely to have some products you don’t needs, and need others you don’t have. It is vital to know where you stand financially.

Short Term Focus

Taking care of the here and now is important, but it is important to have one eye to future at all times. It will be here before you know it.

Superannuation laws forces many of us to look after our retirement through compulsory savings. Unfortunately many of us don’t treat Super like “real money” and this leads to us not treating it with the respect it deserves, for most people it will be either the biggest or second biggest asset they have. It is also important to focus on long term goals such as repaying the mortgage pre-retirement or saving for the kid’s education. It is common not to plan for these things.

Try and Get Rich Quick

The old adage is if it seems too good to be true it probably is! If the opportunity was risk free and a guaranteed success, the person selling the idea would borrow money from the bank rather than promise big returns to investors. In order to get huge returns, you need to take great risk.

The best method to get wealthy is to spend less than you earn for a long term.