You manage what you measure. This is true in all areas of life, and especially true about your money. Start to measure yourself financially and you’ll soon be able to manage it better. Take the time to make a measurement of your finances to see how close you are to your goals.
By measuring your money with these questions, you’ll be closer to your goals today:
1. Where are you? If you answered that question by saying you’re sitting at the kitchen table, you’re doing it wrong. Be aware of how you spend money, how much money is coming in, and where it goes each month. This is called a budget. Welcome it into your life because it’s here to help you. If you already have a budget, find out how accurately you’re sticking to it. Or, you can also use the Money Tracker that I’ve created to help you track your money.
2. Where do you want to go? If you’ve already established financial goals, are they still relevant? Think about what’s most important to you, and match your financial budget and goals to those values. Include something awesome to look forward to and to keep you motivated.
3. How’s your insurance? Don’t assume the insurance you had 5 years ago still applies today. Examine your health and life insurance and make sure your coverage meets your current needs. Consider taking on personal accident insurance to protect the source of income in your family.
4. How’s your emergency fund? This is not the 5 bucks you have stashed in your car in case you need a hit of caffeine in the morning. But if for any reason, you are asked to leave your job, your emergency fund makes sure that you can meet those unexpected twists in life.
• You can have a great savings plan and be on track, but an emergency can blow months and years of work away with one hit. Protect the work you’ve done so far.
5. How’s your portfolio? This isn’t just about coming up with an answer for Chad in HR who’s always asking you because he secretly wants to tell you about his portfolio. This is about having a plan for investments. Do you have a plan to grow your wealth?
6. Are you changing something big? Do you anticipate anything big happening in the near future? Does your car need an upgrade? Is there anything medically coming up? To complete your checkup, make a complete check of all upcoming expenses that aren’t normal or regular.
These questions should let you measure your money in a way that you can do every 3 months or so. It should help you avoid any mistakes and catch any errors early. You can correct as you go. Just like it’s easier to steer a car when it’s moving, you also need to check whether the car is going in the right direction first. Managing your financial prosperity is the same.
In the event should you find that you need expert guidance, feel free to join me at Show Me The Money. It’s where I share deeply with my participants step-by-step on how this could be done. Anyways, I hope you’ve enjoyed the article as much as I have writing it. Have a great week ahead!