Managing your money is a habit. It's something that requires your focus and attention on a weekly, if not monthly basis. I prefer to manage my finances every week, as it helps me keep awareness of my spending habits and allows me to make adjustments. It also helps to motivate me to make even more money, as well as make more intelligent decisions with the money I have. Managing my finances every week has been a habit I've incorporated for over 4 years now and it's changed my life.
I started my first business when I was 21 with 2 business partners. We had no clue what we were doing. We didn't manage our income and expenses, and as a result we ended up in massive debt. We rationalized our spending, telling ourselves that we were making money , when in reality, we weren't. We didn't factor in the amount of money we would have to pay the government at the end of the year in taxes. We didn't factor in all of the small expenses that add up each month. There were many things we overlooked that got us in trouble. All of this could have been avoided by tracking our finances on a weekly basis.
I was in heavy credit card debt in my early 20's, mostly the result of lack of money management. I spent more than I earned, which is a destructive habit. I've now learned that the secret to wealth is to spend LESS than you earn and invest the difference. It took a lot of mistakes to realize that, but it's now a principle that has changed my life. The way that I got out of that debt was taking control of my finances. I decided that I'd track everything in an Excel spreadsheet every week, both my income and expenses. I also decided that I'd keep a budget and make sure that my spending didn't get out of control that I would be living within my means. This allowed me to slowly pay off my credit cards, month by month, and eventually I was debt free. I've never looked back. Managing my finances every week is now something that I'll do for the rest of my life.
I decided to create a template of the spreadsheet that I use to track my finances. I don't use anything fancy, or have an elaborate software. I prefer to use Microsoft Excel, or a Google Spreadsheet. I like to keep things simple. I'm aware of options such as Mint. com and other websites similar, but I've never been able to stay consistent with those enough and my spreadsheet is something I've grown accustomed to.
You'll want to customize it to your liking, as mentioned in the video. You want to make sure you get in the habit of updating it every week. I personally use credit cards for all of my expenses now, as it's much easier to track than cash. Plus you can collect points and air miles. I simply spend 15 minutes every week going through all of my income and expenses, and then updating that document.
