Keeping Financial Records

By David Wright

Let’s look at a common misunderstanding about achieving financial success: Keeping Financial Records

Over the last 4 or 5 months quite a few people have sent me information about smartphone apps that you can download allowing you to keep records of where you spent all your money.

There is definitely a place for keeping financial records but way too many people think it is THE answer to achieving budgeting success.

At the Spending Planners Institute we do recommend clients spend some time carefully monitoring where their money goes for maybe a few weeks, but after that it becomes a boring and fairly pointless exercise.

I used to keep diligent records (and I still do to a lesser extent for tax reasons), but prior to creating the Spending Planner system I used to believe that keeping records was critical for success with money.

However, after 20 years all I had was a big box full of notepaper that was only good for two things:

  1. A good laugh (like…did petrol really only cost me $2 a week in 1975!)
  2. A good bonfire

Keeping records never did sort out my money problems!

There is a really simple reason why it never did.

If you are aiming for nothing you will always hit nothing! Record keeping is all about looking at the past, something you cannot change. You can regret the past or celebrate it, but either way it is history that cannot be changed.

When money trouble arrives, people usually wish they had done things differently, saved more, invested more wisely and generally been more aware and responsible with what they earned, however, if you stop and think about it, looking backwards has very little chance of ever changing your future for the better.

Here’s why …

If you have kept records, you can add up all the money you regret spending foolishly over the last year and you can promise yourself you will do better next year but the reality is that in 12 months time you will more than likely be looking at similar figures as the last year.

i.e. Nothing changed! You had a desire to change but no way to make it happen.

To change, you need to do something other than keeping records and looking backwards at the end of the year (or all year long for that matter).

Everyone reading this blog who currently uses our Spending Planner program knows without a doubt that looking forwards is the key to achieving the financial outcomes they want, not looking backwards.

i.e. You aim at something from the outset rather than finding out what happened after the fact!

It’s well documented that if you wish to achieve a goal, you need to first state what that goal is BEFORE you start the journey. Then you need to break that journey down into a road map with easy to achieve steps you can measure and monitor along the way, so you don’t find yourself two days out from your target suddenly realising you have no possible way of achieving it.

I did not realise when I was inventing the spending planning system for my own financial rescue that it actually is based on the principles of goal setting that have been around for years. It only dawned on me later.

I actually taught myself about goal setting and how to break goals down into easy bite sized and measurable chunks because I went looking for a solution to a specific problem that really needed goal setting principles applied to it.

So the lesson for today is this:

Keeping records can be useful for a while but the moment you get sick or have a holiday or take time out, it will become too hard to catch up, and it will all seem rather pointless anyway because it cannot change your future.

In contrast to that, preparing a road map for the future that basically is your ideal bank statement for the next 12 months in advance with daily targets to aim for that will get all your bills paid on time every time can change your future.

And the good thing about doing this is that it only takes 5 minutes a week to totally take control and change your future to the one you chose rather than the one you ended up regretting.

All you need to do is check your bank balance once a week and compare it with where your road map (Spending Plan) shows that you need to be. If you are ahead of target you can either go shopping or just enjoy the feeling of knowing you are in a really good place. If you are behind target you have time to do something about it before it causes you major grief!

A Spending Plan is incredibly powerful in that it easily allows you to see and plan the future before you begin the journey. You do not need to keep records because you actually create them before you start. You then check them off as you go. It is also very easy to change the plan if you want to (or need to) and if you like you can experiment with different plans before you even start out on the journey.

If you don’t have a Spending Plan then it’s way past time you did. It is such a powerful tool and the foundation of everything else I teach and talk about.

If you know you need help to make this happen, i.e. you have good intentions but find it difficult to create and/or stick to a plan, and you just need someone to be ‘on your case’ looking over your shoulder for a while to get you on track and past the hardest part: getting started, you need a Spending Planner… go to www.findaspendingplanner.com.

There you will find trained Spending Planners who are extremely passionate about helping people like you. The benefit will be far more than the outlay and what you learn during the process will benefit you for the rest of your life!

On the other hand, if you already have a Spending Plan, your finances are not under stress and you know what I’m talking about, you may be interested in joining the team. If you would like to feel the satisfaction of helping someone else turn their life around and create your own business in the process you might want to consider becoming a Spending Planner too.

And if you decide you would like to find out more, go to https://spendingplannersinstitute.com/become-a-spending-planner/

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