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Welcome To The Course, Mastering Money The S.M.A.R.T Way Without
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Lesson #5
REVIEW YOUR FINANCES REGULARLY
Welcome to part 5 of this course and congratulations on making it this
far! You are well on your way to becoming a Money Master.
In this lesson,
we look at reviewing your finances.
It’s all
very well planning, saving, economising and setting up investments, but unless
you review your plans on a regular basis you are likely to get off-track
or come unstuck. Just like a ship’s captain, you have to review your course and
make adjustments to reach your destination.
Remember
to think of yourself or your household as a business in terms of managing your
finances.
What do
well managed businesses do?
Businesses:
·
Have a mission statement, or purpose, and a
business plan.
·
Review plans at least once a year to keep the
ship on course.
·
Hold regular board meetings to review plans,
performance and targets.
·
Hold annual meetings with their accountants,
legal or financial advisers.
·
Have a disaster recovery plan in case of a
fire, flood, robbery or IT failure.
·
Hold reserves and contingency funds to see
them through the lean times.
·
Project forward using a cashflow forecast to
anticipate peaks and troughs.
·
Review mortgages, loans or leases to ensure
they are getting the best deal.
·
Review their insurance policies, liabilities
and savings rates on their reserves.
·
Review expenditure on their utilities, suppliers,
water and broadband contracts
Your ‘head office’ is your home and your ‘board room’ can be your
kitchen table.
When I was running a business, we never wasted office space by
having a dedicated board room with a big shiny oak table and leather chairs.
You don’t even have to hold meetings in the home or office.
We held our most productive meetings in the local café over a cup
of coffee and a croissant. We also generated ideas and built morale by taking
the staff away on team building weekends or buying pizza on a Friday afternoon
and just sitting down with everyone to eat together.
The general principle is to sit down – with your partner, family
or adviser – on a regular basis (monthly or yearly) to review your finances and
plans.
Most people never do this, and is it’s no coincidence that most
people struggle with money.
If you have a family, make sure you include them in your plans and
dreams.
The 3
R’s of Money Management TM
The 3
R’s formula, featured in my book, Yes, Money Can Buy You Happiness,
gives you a simple, but effective, 3 step plan to stay on top of your finances.
1.
Read or Review
·
Read
your bank, credit card and mortgage statements.
·
Read
the list of regular payments going out of your account and credit cards.
·
Read
loan agreements and terms before you sign them and ask, take advice.
·
Read
a simple book on managing your finances or look online.
Whilst
this may seem obvious, I can tell you from my experience in financial services
that most people do not follow the above steps.
Brian
Tracy once said that reading for an hour a day on a subject will make you an
expert within a short period and a world-renowned authority within three to
five years.
2.
Revise
·
Revise
your credit cards and loans and shop around for better deals.
·
Revise
the minimum payment you make each month to clear the debt faster.
·
Revise
your mortgage loan if you feel you can get a better deal without penalties.
·
Revise
your utility suppliers like gas or electricity if this is possible where you
live.
·
Revise
your insurance on your life, health, car, home and personal liability.
·
Revise
and adjust your savings and pension plans to keep up with inflation.
The
next step after reviewing where you are is to make the necessary adjustments to
get you where you want to be. This could include becoming financially free in
the next five years or just living comfortably within your budget each month
and putting something aside for the future.
Loyalty
does not always pay and companies frequently offer better deals to new
customers while leaving their existing “loyal” customers on poorer terms and
even ‘walking the price up’ by a small amount each year.
Shopping
around for better deals will save you a small fortune over time. Remember the
saying, “A penny saved is a penny earned”. Businesses know that cost
saving adds to the bottom-line profits. And it’s never been easier to do with
all the online comparison websites, which can enable to save money almost
instantly.
You
don’t always have to switch suppliers to save money. Why? Because it costs more
to win a new customer than it does to retain one by offering a discount, but if
you don’t ask, you don’t get!
3.
Record
Record
Income and Expenditure on a spreadsheet or one of the many App’s.
Companies
record income and expenditure and prepare monthly, quarterly or annual accounts
to check on how they are doing and submit their tax return.
The
directors hold board meetings to review the previous year and plan ahead. They
budget, make plans and invest in their future in order to stay competitive in
the marketplace. You should do the same and realise that you are your own
corporation running your economy or ‘uconomy’.
Just
like a garden, your finances need nurturing and watering to stay in shape. A
small garden might only need an hour a week. A larger one will need more and
may require some part-time help. A huge garden or estate requires full-time
staff constantly working on it, just like a farm. A farmer knows when to plant
seeds, when to weed and tend and when to harvest and sell.
Yes,
these action steps require effort and discipline, but not doing them will cause
you far more pain. What’s easier, giving the lawn a quick trim every week or
trying to hack your way through a jungle of thick weeds and thorns after years
of neglect?
The
rich and well-off look at their finances all the time, not just when
there’s a crisis. They know what’s coming in and where it goes, and they are
always shopping around for a better deal or investment opportunity.
The poor
and less well-off, do not! It’s that simple. Despite having limited income, I
have found that those struggling with money are more likely to have no idea how
much is coming in or where it’s going. They also make poor financial decisions,
buy expensive and overpriced consumer goods and rarely review their finances,
which is why they remain broke and trapped in a rut.
Some
of the new challenger banks have neat features that allow you to manage your
cash more effectively on your smartphone. They give you expenditure summaries
and send an alert to your phone when money goes in or out of your account. I’ve
just had an alert on my phone advising me that a Direct Debit payment just left
my account. If I use my card in a store I’m also immediately alerted.
Summary Lesson 5
Thinking
of yourself as a business, and following best business practice, will transform
your life. Even if you work for someone else you can still have the mindset of
a company hiring yourself out for money.
Action
Steps
·
Follow the 3 R’s formula – Read or Review,
Revise and Record
·
Read everything to do with your money
·
Revise agreements and investments
·
Review your finances monthly, quarterly or at
very least annually.
Millionaires and millionaire
habits have been studied and documented at academic levels for the last hundred
years. Bestselling books, like The Science of Getting Rich and Thinks and Grow
Rich, were written almost a century ago. I have also published my own book on
how people get wealthy: Yes Money Can Buy
You Happiness. You
can find it on Amazon: https://www.amazon.co.uk/Yes-Money-Can-Buy-Happiness/dp/1095175858
We know exactly what the
millionaire habits and traits are, as success leaves tracks. All you have to do
is follow their tracks to become wealthy and financially free!
If you would like
to learn more about investing and managing your money, become a professional
property investor, or would like to be financially free
without working any harder, watch this free
on demand training.
I will give a special free
gift which can help you to immediately transform your finances when you attend
the online training.
Click on this link to watch the free training now https://bit.ly/3wLWqx2
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