The #1 Financial Mistake I see People Making

Derek Notman |

Since 2006 I have been helping people with their money.  Over the course of thousands of meetings, I have seen virtually every financial mistake that people can make with their money, and boy have there been some doozy’s!  But there is one financial mistake that almost all of them made that led to a series of cascading mistakes over time.

We all make financial mistakes.  Humans are not perfect and are simply prone to making mistakes throughout life, it’s part of how we learn.  But if we can avoid some common mistakes and learn from others who have already made them then we can decrease the odds making bad choices and shorten the learning curve for ourselves and the financial decisions we make.

My goal with this post is to show you some reasons we struggle to master our money, share a little about the simple process happy & financially successful people use to achieve happiness and financial freedom, and tell you the #1 mistake I see people making.

4 Reasons We Struggle to Master Our Money

Missing media item.


Most people have been exposed to the concept of money and learned about how to use it from their parents.  And where did their parents learn about money?  From their parents and so on.  If you are lucky enough to have had parents who were “smart” with their money then you are ahead of the game, but only by a little.  The rest of us probably learned a variety of bad habits with money and simply perpetuated them because we didn’t know any other way. 

At a high level there are 4 reasons we struggle to master our money:

  1. No Formal Financial Education
  2. Emotions
  3. Bad Financial Advice
  4. Failing to have a written plan

Hint…one of these is the number one financial mistake I see people making.

Have you ever wondered what happy and financially successful people do differently that makes them happy and gives them financial freedom?  I certainly have and over the course of meeting with a lot of people over the years I noticed a common process successful people use that differentiates them from the rest.


What Happy & Financially Successful People Do Differently

I think we can all agree that being happy and financially successful are worthy ideals.  But how do we make it a reality?  Having had the privilege to have worked with a lot of very happy and successful people who have achieved financial freedom I made it a point to take a hard look at what they did differently.  I also took a hard look at my own situation.  Was I happy?  Did I have the financial success I wanted?  I spoke with mentors who had achieved what I and many other people wanted, financial freedom.

What did I learn?

Well, although there are unique considerations for each person, when you boil it all down it came to a 3-step process that they all used.

3-Step Process to Help You Reach Financial Freedom and Happiness

  1. Above the Line – People first focused on what their hopes, dreams, and goals where for the future.
  2. Below the Line – They then put together a plan on how to make their hopes, dreams, and goals a reality.
  3. Convergence & implementation – They combined what was important to them with a written plan on how to make it all happen and then took action!
Missing media item.


What is the #1 Financial Mistake People Make?

At the end of the day the biggest mistake I have seen countless people make is that they didn’t have a written financial plan that spelled out exactly how to realize all of their hopes, dreams, and goals.

Given our busy lives and that we were never really taught about money and how to use it for what we truly want in life it is no surprise that people struggle and don’t have a written financial plan.

A written plan starts with first figuring out exactly what is important to you.  It then assesses where you are today, financially, to establish a baseline.  Once this is done the planning process will test a variety of solutions and strategies on how to best realize all of your goals.

Ultimately the written plan helps you crystalize what is important to you, shows you where you are today, and gives you the specific steps you need to take on how to get everything you want in life.  Pretty awesome, right!?

I am a big fan of educating and empowering people to live the life of their dreams.  It is my impression that “financial planning” has a bit of a bad rap because of how it has been marketed (let’s face it, most of the time it seems like work and boring work at that!). 

So I decided to do something about it.

In an effort to help more people be happy and achieve financial freedom I created a free webinar that goes into much more detail about the concepts and ideas I shared in this blog post.  If you found this information to be of value and want to learn more, I encourage you to register for the free webinar, Plan Smarter.  It will inspire and motivate you to take action (I share some specific things you can do today!) towards realizing all that is important to you in life.

Missing media item.

Register Now for the Free Webinar

Thank you for taking the time to read this.  I hope you enjoyed it and learned some things that inspire you to take action today.  Feel free to drop me a note if you have any questions or just want to share how you took action and how it improved your life!

Wishing you all the best,