ostrichIf I asked you what your biggest money mistake was, what you would say?

There are 3 big mistakes I have seen many families make (and admittedly these are mistakes I have made and have learned so much from). Read on to see if what you can do to stop being an ostrich.

  1. Not knowing how much it actually costs to run your life.

    When life gets busy, and tracking expenses is a pain.  Between the credit cards, debit card and numerous payments that need to be made, keeping a handle on it can feel hard.

    It is likely that you were never taught how to manage your day to day money.  The banks are very happy to give you more credit, so if you go over a bit, it isn’t the end of the world, right?  But then the debt starts to creep up and up.  If you don’t know how much it costs to live your life, how do you know if you can afford it?

    A great step to take is to consider the spending areas you might have been forgetting.  You will likely think of including your mortgage, utilities and groceries in your spending but don’t stop there.  Be a detective – scan your credit card and bank statements for additional frequent expenditures like your Costco membership, dog grooming and gas for the regular trips to the in-laws.  These are things that cost money and may get missed in calculating your regular monthly spending.

    By simply understanding how your money moves through your life, you may identify some problem areas. Making small changes could help to avert a financial challenges in the future.

  1. Avoiding money conversations.

    money-coupleAlthough avoiding focusing on something when it feels challenging is a natural response, “If I ignore it, it will go away” isn’t really an effective strategy.

    Are you being the proverbial ostrich with its head in the sand?  Many people will put off working on their finances for months and years to avoid being uncomfortable but the challenges won’t go away until you take action on them.

    Avoiding can not only perpetuate the problems, it can add additional problems like feelings of guilt, shame and blame.  It is not surprising that money and the feelings that can get associated with it is a huge factor in the divorce rate.

    The important thing to do is to start taking small steps.  Book small chunks of time – even 30 minutes will get you moving forward.  Organize your paperwork. Pay bills and transfer funds. Review  what has been done and what is coming up.  Work with your partner and cheer each other on.

  1. Not having a goal or dream to focus on.

    We spend all sorts of money on things that we don’t need, or even want because we don’t have a compelling reason not to.

    When we don’t know how much our life costs, and we are avoiding the subject, we start to believe that it will always be like this.  We forget to dream.

    Get really specific about what you want.  What would you rather spend your money on?  By setting a clear goal, it is easier to “learn to say no to the good so you can say yes to the great” as John C. Maxwell put it.

Having more money, less stress and more choice are the hallmarks of making friends with your money.  Small steps and a clear plan makes a huge impact. When you change how you handle your money and how you feel about it, it can change your life.

Want to use this article in your ezine or web site? You can, as long as you include this complete citation with it.

Personal finance expert, Karen Collacutt is founder and CEO of Make Friends with Your Money.  Karen works with ambitious people who are making good money but are wondering where it all went at the end of the month. She helps her clients to get clear on their money life challenges and opportunities, matching their money to their goals.  They build a plan, confidence and peace of mind around their money. Certified Money Coach and Certified Financial Planner, Karen brings over 15 years of finance and business experience to her clients. Coach, speaker, author and change catalyst for those ready to create a positive and empowered money life, Karen delivers a fresh perspective on how to make friends with your money.  www.karencollacutt.com.

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