Setting your goals is easy.
The details will vary, but we all want to:
– Buy a house (or two)
– Send our kids to college
– Retire (probably sooner than later)
No, the hard part is not knowing your destination (Point B).
The hard part is knowing where you’re starting from (Point A).
If your final destination is San Francisco, then you have to know if you’re flying in from Tokyo or New York.
Determining that is easy when you’re flying is easy.
It’s not so easy when you’re money-ing. Money’s just so complicated!…
…or is it!?!?
The thing that I (and my left brain) love about money is that it’s just numbers.
You can measure numbers. You can analyze numbers.
And the best part? Numbers never lie.
So here’s how to track your numbers and get brutally honest with your Point A:
1. Sign up with an account aggregator service (like Financial Zen, YNAB.com or Mint.com)
2. At the end of each month measure your:
a. Take home pay
b. Savings
c. Expenses
3. Record each number for each month in a spreadsheet.
If you tell me your trailing averages for each of those numbers, I can tell you if you’re on the right path or not. No financial plan necessary.
But truthfully, you won’t even need me to tell you if you’re on a good path or not.
The numbers will tell you themselves.
When people don’t reach their final destination, 99% of the time it’s due to a misalignment of thoughts and reality.
They THOUGHT they were starting from New York and they were ACTUALLY starting from Tokyo.
Just 5 minutes a month will fix that misalignment.
