the four biggest financial mistakes

Four biggest financial mistakes pilots make.

The Four Biggest Financial Mistakes And How To Avoid Them

By Andy Garrison, MBA, CFP, Wealth Advisor

(A version of this article first appeared in Aero Crew News.)

Financial mistakes can, at times, take months or even years to correct. They can also have a lasting impact on your financial wellness. Let’s dive into four of the biggest financial mistakes and how you can avoid them.

Mistake #1 – Living with “Tomorrow-itis”

By far, the number one mistake I see people make in their financial lives is living with what I call “tomorrow-itis.” This is defined as saying, “I will do it tomorrow,” or “It will be taken care of tomorrow,” or any version of “I’m not going to do it today because I will do it tomorrow.” 

As you might expect, and likely have experienced at some point, tomorrow never comes. When you suffer from “tomorrow-it is,” you delay action. Instead, it is helpful and productive if you instead make sure to take some action every day to move toward your goals. Doing so will keep you on the path to accomplishment.

Mistake #2 – Replacing a Plan and Strategy with Hope and Optimism 

Hope and optimism are two very powerful and productive feelings to experience, but achieve nothing without a plan and strategy.  When people simply hope that something will work out or expect that it will because “it always has,” they end up in a hazardous situation because they are not directing and designing the outcomes themselves.

I can tell you with absolute certainty that the people who live their financial lives by design are far more successful than those who live their financial lives by default! To make sure you’re operating by design and not by default, have a plan and strategy in place. Every flight goes better with a plan and every pursuit of a financial goal goes better with a plan, as well. Your plan does not have to be complicated.  It simply needs to outline what must happen and what actions you need to take to reach your goal. Then, make sure you’re taking daily action on that plan.

Mistake #3 – Not Taking Action

Action is the most crucial part of reaching your financial goals. The best intentions, the best plan, and the best goals in the world come to nothing without action. Action is what separates the financially successful from the average and the unsuccessful. So how do you become a master at taking action in your financial life? Simply list all the things you could do – action-wise – to reach your financial goals and start small.

Don’t try to solve all your problems and challenges on day one, but simply break each major action into smaller actions and get moving by taking one or two small actions every single day. If you take two small actions every single day in the direction of your financial goals, you will be taking over 720 actions every year. If you’re doing that, it will be very difficult not to move toward financial success!

Mistake #4 – Comparing Yourself to (your image of) Others

Why is comparing yourself to others such a major financial mistake? Because, despite the lifestyle you might see your friends enjoying on social media, the majority of Americans are broke. According to Bankrate.com, 76 percent of people in the United States live paycheck-to-paycheck and over 60 percent couldn’t come up with $1,000 in an emergency. Social media and the constant news flow make it easy to focus on what others are doing, or seemingly have acquired or achieved. 

If you compare yourself to the image that others are showing, you’ll likely end up in the same situation. Comparison to others is not only unproductive, but it often does a great deal of damage to your financial life.

So, what does this mean to you? It means, avoid the temptation to compare yourself to others and what others have (or appear to have)! Don’t worry about what’s on social media, worry about what’s in your bank account.

When you’re focusing on yourself and what you can accomplish, you will be miles ahead of everyone else, and at that point, comparisons won’t even matter.

The views expressed are for commentary purposes only and do not take into account any individual personal, financial, or tax considerations. It is not intended to be personal legal or investment advice or a solicitation to buy or sell any security or engage in a particular investment strategy.