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The Power of Tracking Your Numbers: Step #3

November 22, 2011

This is the 3rd in a series on creating a financially healthy life. If you jumped in and did the first two steps, Just Do It and Reality, Get a Dose, this one might be the one you might need extra support in accomplishing. Lots of us like to do projects. We like to plan. The first two steps were projects.

This 3rd step requires consistency. Yes, consistency. This is where many of us jump off the financial band wagon.

I liken it to the health band wagon. Most people can stick to a diet for awhile. It might be challenging, you may not like it, but if we knew that we only had to change our eating habits for 3 months to impact our physical health for the rest of our lives, would we do it? Most of us would.

If I told you that getting into financial action for 3 months, really making a consistent commitment, would change your financial life for the years to come, would you do it? You’d have better results if you agreed to do it for a year, for 5 years, or for the rest of your life. But tracking your numbers for just 3 months will make an impact as well. It will reset your clock, equilibrate the way you look at your spending, and serve you in truly seeing your income versus your spending.

If you’re ready to seriously impact your future financial health, here’s what you MUST do:

  • Record your spending weekly. Ensure you’ve captured everything. Total your numbers in the categories created in Step 2. Look at them in comparison with your monthly spending plan. Are you on target? If you aren’t, why? Do you need to make adjustments to your spending throughout the rest of the month?
  • Record your income, all of it. For many, this is the same number over and over and it might seem like drudgery. But its only 5 seconds worth, so just do it. For others, those with commission-based income, hourly jobs that shift income or self-employment income, tracking recording your income is every bit as important as your spending. Inconsistent income can cause a lot of challenges in balancing your spending. I know many a mortgage broker and Realtor that have money issues solely based on the fact that some months they earn five-figure, and other months they earn nothing.
  • Write it down by hand. I know this advice seems odd, almost counter-intuitive for some. But if you’re ready to seriously impact your future financial health, just do it. Why would someone who successfully uses Quicken or Mint.com take a pencil to paper and write? Because we take in information that we’ve written differently than that which we’ve read. Remember, I’m not suggesting you do this forever. But I am suggesting you do it for 3 months.
When you’re at the end of the three months, you’ll know whether or not you need to continue a weekly practice. You will have gained a lot of factual knowledge about your finances. But more importantly, you will have gained some personal knowledge of how you feel about your income, your spending, and your consistency with the financial health band wagon.

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Stacey Powell builds financial muscles at TheFinanceGym.com, creates financial clarity at CreatingAnswers.com, and shows off Financial Art at Facebook.

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