In the quest for turning financial turmoil into financial peace of mind, we often look to others for answers. Yet…what it comes down to in the end, is a stark realization that WE have, and have had, the answers all along.
The First Answer
You must develop an awareness of what you are CURRENTLY doing in order to determine what you NEED to be doing to change your current financial situation. Truly SEEING yourself is the type of awareness you need; the type of awareness that rocks your world, makes every part of your being shiver at what will happen if you stay the same and don’t initiate change in your life.
This is the type of awareness that initiates change that moves mountains, changes the course of mankind, alters the face of what has been for the rest of your days.
This type of awareness is necessary for profound change in any area of your life, including your personal finances. Some of the many things that often spark this type of awareness include:
- Emotions around your personal finances you can’t deal with anymore…overwhelm, sleeplessness, anxiety, embarrassment, shame and especially fear.
- Situations where you can’t keep up with payments.
- Dealing with debt collectors all day long.
- Feeling like you’re trapped…like there’s no way out (not that you can see yet).
- Constant consistent advice from those who care about your welfare.
- Or anything else that slaps you in the proverbial face and wakes you up to the reality of the situation.
Once you have experienced this type of in-your-face awareness, and you’ve made the decision to change what you’re currently doing to get a different result in the future, it’s time to whip out…The Little Money Book.
Little Money Book
The Easiest Part
The Little Money Book is your new best friend. This little book is going to keep track, with your help, of every cent (and dollar) that you spend for the next few weeks.
OK, I hear some of you saying to yourself, “I’m too busy. I don’t have the time to write it down everytime I spend money!” OK, then you don’t have time to ever be financially free! You don’t have time to learn how to get yourself out of the situation you’re in right now! If this is the case, stop reading and get back to work because obviously you’re not ready to experience a different financial way of life. That’s OK with me…just stop telling people you’re tired of not having money anymore because, obviously, you’re unwilling to do anything to change the situation.
Now, back to those of you who ARE ready for a change, ARE ready to experience more peace in your life, ARE ready to really take a look at real culprit…YOU! But before we go on, know that KNOWING that the culprit is you is a good thing. At least you know the person who is responsible!
Here’s what you do…
- Go to the nearest dollar-type store or office supply store and buy the littlest notebook you can find.
- Buy or find a short pen or pencil; one that you can put inside the rings of that little notebook.
- Put this notebook into your wallet or purse and KEEP IT THERE.
- Every time (not just sometimes but EVERY time) you spend even a penny, write it down in your Money Book.
- Write the date, the amount, what it was and why you bought whatever it was you bought.
- Do this for AT LEAST two weeks.
OK, now comes the best part. This is where you are either shocked at what you learn or affirmed that you know what you need to do differently. Do the following…
- Go through the past two weeks (or more) and circle every expense that was a WANT instead of a need. And be honest here. Don’t make excuses. Don’t justify it. Be an adult and look at each expense with a nonemotional inquiry about whether it was a need or a want.
- Add up the figures that you circled and write that final sum in your notebook under the last entry.
- Take that figure to the computer, go here: http://www.daveramsey.com/tools/investing-calculator/ and enter the amount you spend on wants.
- Use this amount as the initial investment, use 10% as the return and use 25 years as the investment period.
- Seriously take a look at the future value of the amount of money you spent on wants instead. Once you have this future in mind, get ready for the hardest part.
The Hardest Part
This is where, as they say, the rubber meets the road. This is where the the saying, “Winners never quit and quitters never win” hops on board. This is where you must CHOOSE to change what you’re currently doing to live a better result.
It’s simple, but it’s not easy…unless you want it to be.
Now that you know the future value of the money you’re essentially ‘wasting’ on wants, you have to choose differently. You have to look at every purchase and ask yourself, “Do I really want to continue wasting my financial resources so I’ll never be secure, peaceful and financially free OR am I willing to make the necessary changes and choose differently to get the results I really want?
So…
Are you up for the challenge?
Do you REALLY want to change your financial situation?
Where will you end up if you do nothing?
Where will you end up if you change?
Only you can answer these questions. Only you can turn The Little Money Book into a financial powertool to change your life.
And the answer is…
THANK YOU! I have been receiving your emails for quite awhile. I have purchased your allowance book and listened to some of your speakers. All of your information confirms the lessons I learned. This one really hit home. I never learned about tracking income or expenses. I never knew how to do a budget. I would spend the money until there wasn’t any left and then charge it on the credit card. Finally, a few years ago I decided to break the cycle of charging and having to take months to pay it off, taking a vacation before I had the money, and over spending every month. Instead of your money book, I got a receipt for every penny my husband and I spent. I then logged all the purchases and expenses in a notebook. Finally I put the information on an Excel spreadsheet to see where all the money was going. It has taken me years of baby steps to get to the point where I have a balanced budget and actually have money to put into savings every month. This, after my husband’s income was cut in half and mine dropped through the floor (see my website for the story). I couldn’t agree with you more! Yes, it is time consuming when I first started, but eventually, I created a process that works for me and my husband. We now both know where each penny is going and when we don’t have the money, we don’t buy it. It is very overwhelming at first, and like all change, felt awkward as we weren’t used to doing things this way. Now it is a way of life that I instill in my daughters. I make the most of each opportunity to explain a financial prinicpal to them and how knowing where your money is going is the first step to making sure it is going where you want it and growing instead of shrinking. Thank you for the confirmation!
Thank you, Amy! I hope every woman out there reads your comment. It takes commitment and a desire for the best life!