As a financial life coach, I believe it’s important to get at the heart of an issue and build on that. If you’re struggling with your finances then start with the one thing that will get you on track the fastest.
Out of curiosity I wondered what other people think is the single most important thing you need for financial success. So, like anything you need an answer to, I Googled it.
In this article, Darrow Kirkpatrick says that knowing your net worth is the answer. Robert Farrington says that accountability is the answer. In an article from The Simple Dollar, Trent Hamm says self-discipline is the key.
All of those are certainly important to your financial success but are they the most important? No, these people are all wrong! Ok, not really but I do think that without one key element, each of their answers is lacking.
The answer is…
Know where your money is going. You need to stalk your money, keep tabs on it, and follow it wherever it goes.
Without knowing where your money is going, without having precise figures for what you spend, none of the other things matter. I may know my net worth is too low but without knowing my spending how can I make adjustments? I may be accountable, knowing that I’m the reason for the situation I’m in, but without knowing my spending I can’t use the accountability to make necessary changes. I may have discipline and forego the latte to save $4 but have a car payment that is out of line with my income.
Let’s make all of those “most important” things second to knowing your spending, tracking your spending. Let’s have the self discipline to track every penny we spend, let’s have the accountability to stop wasteful spending, let’s know our net worth and take action to improve it.
If you can’t find the answer to these questions quickly and accurately, then you’re not tracking your spending closely enough:
- How much did you spend on eating out last year?
- How much did you spend on groceries last year?
- What percent of your gross income goes to pay your rent/mortgage?
Those are just a few examples. There are tools and techniques to help you track these and all your expenses.
If you’re ready to make the decision to get on the path to financial success then take the leap and join me on a new journey.
For more information on how I might help you map out a new route, please visit embarkonaplan.com.