What do I mean when I say your numbers are the starting point of your money story? Let me explain.
You pull out your favourite pair of jeans that you haven’t worn for a while and as much as you huff and puff you can’t get the zip up. No, they haven’t shrunk, you have grown.
What?! Better do something about this! Off you go to the gym (or weight watchers) and what is the one of first thing that happens? They want a reference point (where you are now), out come the scales, then the tape measure and fat pinchers.
And now you know your numbers! You may not like them, but at least you have established a starting point to improve upon.
Next you’ll be asked what your goal is, what you’d like to achieve so the appropriate plan can be put in place. And you will picked some more numbers so you know where you want to get to.
It’s exactly the same when you want to rewrite your Money Story.
This is never more truer than for couples; whether it’s a new long term relationship or those that have been together a while.
You need to know your numbers. Otherwise how can you make plans or change when you don’t know where you are starting from and where you want to get to?
One of the first exercises we get you do is to write down, off the top of your head, how much money comes into your accounts and how much you think goes out. We get some really interesting responses.
Generally, those who have a Hoarder Money Personality (have a look at our money personality blog to learn more or take our Money Personality quiz or do both!) will have a pretty good idea of what their financial situation is.
The Spender and Avoider Money Personalities will quite often have no idea and it will be a real stab in the dark for them. They also tend to be the ones who don’t add up the spending list.
The next exercise is to look at what you actually receive and how you really spend it, then compare reality to what you thought. We have never yet had a client who has had the two lists the same.
Only when you have looked at your numbers warts and all, can you begin to rewrite your Money Story.
Now, there is a very important number to know; it’s is a measure of how close you are to financial security, it’s called your Starting number. This number is the difference between what you own and what you owe (your personal balance sheet).
When we ask a group of people how many want to be financially secure, 99% of the group will put up their hands (the other 1% consider they are already there). Then we ask them to keep their hands up if they know what their Starting number is today – 98% will put their hands down.
When you first start out, it is very possible this number will be negative. Particularly if you have a student loan, credit card debt or a mortgage and not very much on the other side, like a house (or equity in a house), car, investments or retirement savings.
The goal is to get that number into the positive as soon as possible and keep growing, which it will do as you add more to what you own and less to what you owe.
If you don’t know your numbers, you are flying blind (in a financial sense). You can’t move forward with a New Money Story unless you know where you are now, and how you are going to get to where you want to be.
If you want to know more about understanding the numbers in your life – or in your business, book a free strategy call with us by clicking this link.
If there isn’t a time that suits you, drop us an email and we’ll arrange something.