Threat and Error Management: Why Small Financial Mistakes Add Up (and How to Fix Them)

Most financial problems don’t happen because of one huge mistake.

They happen because of small, unmanaged issues that quietly stack up over time.

In the Air Force, we used a system called Threat and Error Management (TEM). A threat is anything that increases risk or complexity. An error is an action or inaction that reduces safety margins. When threats and errors aren’t managed well, they can lead to serious failures.

The same pattern shows up in everyday life and money.

The Hidden Threats Behind Financial Stress

Common threats in real life include:

• Stress from work or family responsibilities

• Lack of time to plan or review finances

• Rising costs and lifestyle creep

• Avoiding uncomfortable money conversations

• Information overload

  
  

These don’t automatically cause problems, but they make poor decisions more likely.

The Small Financial Errors We All Make

Errors often look like:

• Putting off bills or budgeting

• Emotional spending

• Not planning for emergencies

• Rushing big purchases

• Ignoring warning signs

  
  

On their own, they seem minor. Over time, they compound.

Why Managing Errors Matters More Than Avoiding Them

High performers don’t expect perfection.

They expect challenges and build systems to catch small mistakes early.

In finances, this means focusing on awareness and simple habits instead of willpower.

How to Become 1% Better at Managing Money Risks

Try these small steps:

1. Identify your common financial threats

Notice when stress, pressure, or distraction lead to bad choices.

2. Watch for repeating mistakes

Patterns matter more than one-time slip-ups.

3. Create simple countermeasures

Weekly check-ins, automatic savings, and slowing down big decisions can make a huge difference.

Final Thought

Financial wellness isn’t about being perfect.

It’s about managing the human side of money.

Small improvements, done consistently, lead to lasting change.