In life, it’s important to learn from the successes of others! That’s why some of us like to read biographies or watch inspiring videos.
It is equally important to learn from the mistakes of others (besides one’s own) to have a complete vision of what it takes to succeed in what we undertake.
In this sense, here are 4 things not to do when trying to improve your personal finances. This is not an exhaustive list. You can learn more by reading business news or personal finance blogs.
Mistake No. 1 – Waiting for Ideal Conditions
If you are armed with this perspective that you will begin to better manage your personal finances when X or Y future event occurs, your brain has played a dirty trick on you and you have drunk the cool aid. It is almost 100% certain that it’s an excuse that your brain has custom laid for you to justify your inaction. You’re even completely convinced about it!
Mistake No. 2 – Thinking Your Initial Motivation Will Rectify Your Financial Situation
A classic! Initially, you will be motivated and it will be easy to be more conscious of your spending and income. However, after a few days and/or weeks, you will fall on a day when you are very tired and where motivation will be a little less. On that day, you may go back to your old habits and face the comfort of yesteryear. At this point, forgive yourself, learn from this misbehavior and get back to pursuing your goals.
Mistake No. 3 – You Don’t Have Clear Objectives
Are you tired of hearing this advice? This is probably because you do not have clear objectives or goals written somewhere. When I managed to gradually improve my personal finances, it was mainly thanks to a clear objective: Pay my debt in full in 12 months.
This clear objective sustained and supported me throughout my quest for repayment of my debt. In fact, it was so effective that I managed to attain my goal in 9 months.
Why is it so important to set achievable and clear objectives, you say?
- Basically, it is because we are created like that. Our brain is a machine tasked to complete clear and achievable goals. That’s how it works basically, whether you realize it or not!
- In difficult times, such as when I was about to make unnecessary or optional expenditure, I refocused on my clear goal for debt repayment and it helped me to put this temporary spending in context with the “big picture.” So a future objective understood and absorbed by our subconscious can help you to better decide and act in the present moment. Knowing “why” it was important to improve my personal finance, made it much easier to say no to an optional expense when it arose.
Mistake No. 4 – You Think You Can Get There Without Working From the Facts: Your Figures!
What gets measured improves. In addition, seeing the progress concretely helps renew your initial motivation over the long term. It also allows you to continue your quest to improve your personal finances brilliantly.
At its simplest, to improve your personal finances you must improve your “cash flow” or money off as follows:
- Reduce, eliminate or optimize expenses
- Grow your current revenue streams and create new ones
To get there, you will continually check the facts and master figures related to your expenses and your income.
Have you made any of these mistakes? How are you trying to improve your personal finances?
Photo courtesy of: andibreit