We all need to know exactly what the most common mistakes are in our financial planning, and then we should take positive steps to avoid them. The most common mistakes are:
– Not setting measurable financial goals for ourselves. We all want to be rich, and we keep saying that, but that is just too vague. Be more specific in what you want exactly.
– Many of us do not really see, or understand the bigger picture of our financial planning.
– We seem to easily confuse financial planning with investment or retirement or even tax planning, but these are all elements of our financial planning.
– Some of us make the huge mistake of thinking that financial planning is only for the wealthy or for when you get older.
– Most of us make the mistake of expecting unrealistic returns on our investments.
– We neglect to re-evaluate our financial plan periodically.
– We think that by making use of a financial advisor means that we are losing control of our financial affair.
The above is all mistakes that we make, some of us make these entire mistake, and others just a few, but we make mistakes regarding our financial planning. We can avoid these mistakes, just use the following tips:
– Know and accept your limitations, then bring in the experts. Ensure that you choose someone who has the necessary knowledge, skills and experience to assist you best. Such a person will look at your goals and your needs, then take you through a comprehensive needs analysis, and make recommendations based on this and also assist you in building a long-term financial plan.
– Set concrete long and short term financial goals for yourself.
– Look at and understand fully what the impact is of your financial decision, as these decisions affect many areas of your life.
– Recommendations are based on your inputs, as one size does not fit all, your advice should be personalized.
– As your financial goals may change over time, due to changes in your circumstances. Therefore review your financial situations regularly. Also review your goals and what you want at regular intervals.
– Start your planning early, those who save and invest small amount of money early are often better off and do better than those who wait for later.
– Keep your expectations realistic. And keep in find that factors such as inflation, investment markets and changes in interest rates will affect your financial planning results.
And then finally, use your financial plan, there is absolutely no use or point in building a financial plan, unless you implement and use it.