Financial Awareness starts here!
1. **Establishing a Baseline** This begins with the tracking process of your financials, start by gathering all relevant documents that detail your income and expenses. This can include pay stubs, bank statements, invoices, receipts, and any other records that illustrate your financial activity. Establish a baseline by calculating your total income versus total expenses over a given period. This will give you a clear picture of your current financial situation.
Tip: Be honest with your self about your financial awareness skills.
2. **Budgeting: The Foundation of Financial Understanding** Once you have a clear view of your financials, creating a budget becomes essential. A budget acts as a roadmap for your financial journey, outlining expected income and planned expenses. This allows you to allocate funds toward necessary expenditures, savings, and discretionary spending. It's vital to categorize your spending so that you can identify areas where cuts can be made if needed. Regularly revisit your budget, as it is a living document that should be adjusted according to changes in your financial situation.
Tip: add 2 non existing Miscellaneous bill accounts to you budget and place that money into an interest bearing account, for Ex. Money Market account.
Financial Awareness Fundamentals
Just get Started
Review and Adapt when needed
Budget
Technology is your friend
Understanding your financials is crucial for anyone who wishes to maintain control over their economic situation, whether for personal finances or business operations. The phrase 'know your numbers' underscores the importance of not just being aware of your income, expenses, assets, and liabilities but also being able to track and analyze them effectively. This encompasses evaluating where your money comes from and how it is being spent, providing insights that can guide your financial decisions. We start with this section as it is the foundation to your financial rise or fall which affects every aspect of your life including credit which affects interest rates.
3. **Tracking Your Spending** With a budget in place, you must diligently track how money actually flows in and out of your account. There are numerous tools available, ranging from simple spreadsheets to sophisticated financial apps, which can help monitor daily transactions. Keeping track involves recording every expenditure and categorizing it to see where your money is going. Over time, reviewing these records may reveal spending habits that could be adjusted for better financial outcomes.
Tip: use multiple accounts to properly track spending, for example Have an account for Gas, one for Food to include fast food, one for Bills, then one for your personal spending. Many banks can offer this at no added cost.
Accountability
Keep Learning
9. **Building Financial Resilience** Ultimately, understanding your financials allows you to build resilience against economic fluctuations and personal financial crises. Whether it’s creating an emergency fund or planning for retirement, knowing your numbers empowers you to make informed and confident financial decisions.
Tip: Financial awareness is a never ending game of chess, and life is your opponent, however the game never ends, but you don't have to lose either; therefore always be planning your next move.
4. **Analyzing Financial Data** Merely collecting data is not enough; analysis is key. Look for trends in your spending patterns and income sources. Are there specific categories where you consistently overspend? Similarly, consider whether there are recurring expenses that could be reduced or eliminated altogether. This analysis will aid in better decision-making, allowing you to anticipate financial challenges and act proactively.
TIP: Place Bill money in a Separate Account in order to prevent a shortage.
The Rabbit Hole
Set attainable goals
5. **Setting Financial Goals** With a solid understanding of your financials, you can set realistic and attainable financial goals. Goals can range from saving for a vacation, building an emergency fund, or investing for retirement. Each goal should be specific, measurable, achievable, relevant, and time-bound (SMART). Having clear objectives will motivate you to stay on track and adhere to your budget.
Tip: Share your goals with your coaches, because they to also share your passion for change.
7. **Embracing Technology** In today’s digital age, countless financial management apps can simplify the process of tracking where and how your money is being spent. Tools like Mint, YNAB (You Need A Budget), or personal finance spreadsheets can assist you in automating tracking and analysis, saving time and increasing accuracy. Leverage technology to streamline your financial understanding.
Tip: take the time to learn new things about the tech you use daily, your Phone or your Computer.
8. **Continuous Education** The landscape of personal and business finance is ever-evolving. Engage in continuous learning about personal finance concepts, investment options, and market trends. Books, webinars, and financial news can all serve to enhance your financial literacy and understanding, ensuring you remain adept at navigating your financial journey.
Tip: You're never too old, or too smart to learn new things, so start familiarizing yourself with things you never knew you could. Let's get started learning about ETF's, Mutual Funds, and Stock; to quote Dave Ramsey from the book The Total Money Make Over', ''learn to live like no one else, so that you may live like no one else."
10. **Utilizing Professional Help When Necessary** If tracking your finances feels overwhelming or you want to take your financial understanding to the next level, consider consulting with a financial advisor. Professionals can offer insights tailored to your specific situation and help strategize for future growth, investment, and savings.
Tip: we have professional coaches available to educate you on your financials, schedule your appointment and get started with step 1.
6. **Reviewing and Adjusting Regularly** Financial understanding is not a one-time effort; it requires ongoing attention. Regular reviews of your financial situation allow you to make necessary adjustments. Consider setting aside time each month to assess your budget, track expenditures, and evaluate your financial goals. By doing so, you can stay informed of your financial health and make any needed adjustments promptly.
Tip: The most important tip anyone can give you in life, is, to Be water!
Plan for Change
You're Not Alone
1) Engaging with your numbers actively, by tracking your expenditures, and analyzing data critically in the same manner as someone interacts with social media. 2-3 hours per week is all you need to formulate a plan.
2) Understand Needs -VS-Wants. So many of us constantly sell our selves on a daily basis into believing that a want is a need. Be More Disciplined
3) Out side influences can be a major budget buster, so understanding that a friend may not have the same goals as your self or may not make the same money and as a result your budgets and discretionary spending must also be different.
4) Learn to say no! Here's one way to do it, "I wish I could how ever I'm not in a position to do so at this point" then ask if they would like to join the program or talk to some one about their financials.
5) Don't be afraid, or ashamed of personal growth or success. Never dim the light you have inside you in fear it will make someone un happy.
This foundational knowledge will enable you to achieve financial stability and work towards your long-term financial goals effectively.
Implement The Fab 5 In Your Routine Daily!
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