I sat down with a couple who are both PTs for their 1:1 Coaching session. 30 mins into the session, we realised that they had been missing out on $30,000 of savings for the last 3 years in a row whilst they had both been earning well but had been stuck on $20k savings. They couldn't believe it and had to take some time out to catch their breaths as $90,000 over 3 years of missed opportunity was realised. This is one of the most common reactions when I work with my clients in one part of 1:1 Coaching - Cash Flow Session.
This is not the only 'a-ha' moment that commonly comes up, aside from not working 1:1 with a wealth coach here are the top 5 Most Costly Money Mistakes PTs Make.
1. Lack of or no structure, seperate revenue from net pay.
Would you go to the gym and not monitor your progress to track your gains? If your answer is no, why do so many PTs apply the same approach to money.
Often I come across PTs who have their personal and business accounts all mixed up together. Whilst this seems like no issue when you first start out over time it creates confusion as its not clear how much money you are actually spending in your business vs your personal life and how much tax or GST you owe or will owe and most importantly, you wouldn't know what are you net savings are.
2. Not having a backup plan Would you get someone to spot you when you are doing your heaviest rep in case something goes wrong? If your answer is yes, why not do the same with your finances. Most PTs income rely heavily (if not 100%) on their physical body. Meaning you need to actively move your body to show up for your sessions with clients in order to earn some money. What happens if something goes wrong and you can't show up for work for more than a month? What if it is longer? Do you have a backup plan? Not having one can wipe out years of hard work if the unexpectant does happen. It can make sense to have a spotter! 3. Still managing their cash flow manually We are now in the age of information and technology. There are far easier ways to manage your cash flow than to manually count or check them on a regular basis. When you manually check your cash flow, you often start second-guessing how much you should have saved, sometimes draw down on your savings account when you shouldn't and most importantly, waste a lot of energy and time in the process with little or no results. 4. Doing the same thing with their money as they were when they first started PT Do you take new courses to develop your skills reguarly to grow personally and professionally? If your answer is yes, ask yourself when was the last time you spent some time and money to develop your life and money plans? If you are still managing your money the same way you did as you first started PT, you will get the same results with your money before you started PT. When nothing changes, nothing changes. 5. Not understanding the difference between good debt and bad debt Debt is not always a bad thing if you know how to use it. It's can be your worst nightmare when it is used for the wrong reasons. It's like your best friend when it is used for the right purpose and purchases. When you have a strong understanding of how money works and a clear plan for your future, taking on debt for a good investment can be a very rewarding thing over the long run. But only if the foundation work is done correctly. Just like when you ensure that your body postures are spot-on for each of your squads before taking on more weights.