Episode Details

Exclusive free training for my Money Tips Podcast followers!

Welcome To The Course, Mastering Money The S.M.A.R.T Way Without Working Any Harder! 

Lesson #6

TRACK YOUR INCOME AND EXPENDITURE

Welcome to the final module and congratulations on sticking with it. Winners are finishers!

If you can’t measure it, you can’t improve it.

Peter Drucker

In this module, we are going to put it all together starting with monitoring your income and outgoings.

Tracking your income and expenditure is the foundation of gaining control of your finances and accumulating wealth. Unless you know where your money is going you cannot make savings or accumulate cash, which is why I keep repeating this.

Keep a spreadsheet, or an app and you’ll be amazed at the results. 

Good businesses and governments keep accurate records, and produce monthly management accounts. They use cashflow forecasts to project forward to anticipate peaks and troughs and nasty surprises.

When working as a financial adviser, I found that the average person had no idea. A regular annual spike in expenditure, such as Christmas or a service on the car, seemed to come as a big surprise to them.

People in this position were invariably broke or living close to the edge. They constantly worried and argued about money because money controlled them rather than the other way around. 

Any large bill would send them deeper into debt.

Things always seemed to go wrong for them, or that’s how they perceived a car breakdown or the boiler packing up over the Christmas holidays. 

One family I met actually felt that the whole world was against them. The husband, despite being a skilled and intelligent design engineer, was the main problem. He was at odds with everyone and always going to court to dispute late payment fines or parking tickets. He would say things like, “it’s just our luck” or “the system’s a con”. 

The wife said to me, “we just want to be normal”. I could see that the negativity and poverty mindset of the parents was being passed on to their six children who all looked slightly downtrodden and worried. 

In reality, their “disasters” were no different to the things that happened to everyone else. Things go wrong and break down, especially when they are old or not serviced.  

When you are in control of your finances you will still have problems. However, the difference is that you will be able to deal with them quickly without borrowing. You will have a contingency fund and insurance cover for breakdown and repairs or things that happen unexpectedly in our lives, like the death or injury to a breadwinner. That’s what wealthy people have!

You will know you exactly where your money goes and where you can make savings.

Additional income when economising is not enough.

Mastering money is not just about saving money or cutting back. You obviously need to earn well and keep earning, learning and improving.

You can only reduce your expenditure so far. If you want to improve your lifestyle you will have to increase your income. Struggling businesses cannot just cut costs and staff in order to survive. They need sales and revenue.

You can increase your revenue in a number of ways. For instance:

• Change your job or business 

• Upskill to become more valuable to the marketplace

• Take a part-time job or start a part-time home-based business.

How many hours do you work each week?