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

 

Lesson #5

 

REVIEW YOUR FINANCES REGULARLY 

 

Welcome to part 5 of this course and congratulations on making it this far! You are well on your way to becoming a Money Master.

 

In this lesson, we look at reviewing your finances.

It’s all very well planning, saving, economising and setting up investments, but unless you review your plans on a regular basis you are likely to get off-track or come unstuck. Just like a ship’s captain, you have to review your course and make adjustments to reach your destination.

Remember to think of yourself or your household as a business in terms of managing your finances. 

What do well managed businesses do? 

Businesses:  

• Have a mission statement, or purpose, and a business plan.

• Review plans at least once a year to keep the ship on course.

• Hold regular board meetings to review plans, performance and targets.

• Hold annual meetings with their accountants, legal or financial advisers.

• Have a disaster recovery plan in case of a fire, flood, robbery or IT failure.

• Hold reserves and contingency funds to see them through the lean times.

• Project forward using a cashflow forecast to anticipate peaks and troughs.

• Review mortgages, loans or leases to ensure they are getting the best deal.

• Review their insurance policies, liabilities and savings rates on their reserves. 

• Review expenditure on their utilities, suppliers, water and broadband contracts

Your ‘head office’ is your home and your ‘board room’ can be your kitchen table. 

 

When I was running a business, we never wasted office space by having a dedicated board room with a big shiny oak table and leather chairs. You don’t even have to hold meetings in the home or office. 

 

We held our most productive meetings in the local café over a cup of coffee and a croissant. We also generated ideas and built morale by taking the staff away on team building weekends or buying pizza on a Friday afternoon and just sitting down with everyone to eat together.

 

The general principle is to sit down – with your partner, family or adviser – on a regular basis (monthly or yearly) to review your finances and plans. 

 

Most people never do this, and is it’s no coincidence that most people struggle with money.

 

If you have a family, make sure you include them in your plans and dreams.

 

The 3 R’s of Money Management TM

 

The 3 R’s formula, featured in my book, Yes, Money Can Buy You Happiness, gives you a simple, but effective, 3 step plan to stay on top of your finances.

 

1. Read or Review

 

• Read your bank, credit card and mortgage statements. 
• Read the list of regular payments going out of your account and credit cards.
• Read loan agreements and terms before you sign them and ask, take advice.
• Read a simple book on managing your finances or look online.

 

Whilst this may seem obvious, I can tell you from my experience in financial services that most people do not follow the above steps. 

 

Brian Tracy once said that reading for an hour a day on a subject will make you an expert within a short period and a world-renowned authority within three to five years.

 

1. Revise

 

• Revise your credit cards and loans and shop around for better deals.
• Revise the minimum payment you make each month to clear the debt faster.
• Revise your mortgage loan if you feel you can get a better deal without penalties.
• Revise your utility suppliers like gas or electricity if this is possible where you live. 
• Revise your insurance on your life, health, car, home and personal liability.
• Revise and adjust your savings and pension plans to keep up with inflation.

 

The next step after reviewing where you are is to make the necessary adjustments to get you where you want to be. This could include becoming financially free in the next five years or just living comfortably within your budget each month and putting something aside for the future. 

 

Loyalty does not always pay and companies frequently offer better deals to new customers while leaving their existing “loyal” customers on poorer terms and even ‘walking the price up’ by a small amount each year.

 

Shopping around for better deals will save you a small fortune over time. Remember the saying, “A penny saved is a penny earned”. Businesses know that cost saving adds to the bottom-line profits. And it’s never been easier to do with all the online comparison websites, which can enable to save money almost instantly.

 

You don’t always have to switch suppliers to save money. Why? Because it costs more to win a new customer than it does to retain one by offering a discount, but if you don’t ask, you don’t get!

 

1. Record

 

Record Income and Expenditure on a spreadsheet or one of the many App’s.

 

Companies record income and expenditure and prepare monthly, quarterly or annual accounts to check on how they are doing and submit their tax return. 

 

The directors hold board meetings to review the previous year and plan ahead. They budget, make plans and invest in their future in order to stay competitive in the marketplace. You should do the same and realise that you are your own corporation running your economy or ‘uconomy’.  

 

Just like a garden, your finances need nurturing and watering to stay in shape. A small garden might only need an hour a week. A larger one will need more and may require some part-time help. A huge garden or estate requires full-time staff constantly working on it, just like a farm. A farmer knows when to plant seeds, when to weed and tend and when to harvest and sell.

 

Yes, these action steps require effort and discipline, but not doing them will cause you far more pain. What’s easier, giving the lawn a quick trim every week or trying to hack your way through a jungle of thick weeds and thorns after years of neglect?

 

The rich and well-off look at their finances all the time, not just when there’s a crisis. They know what’s coming in and where it goes, and they are always shopping around for a better deal or investment opportunity.

 

The poor and less well-off, do not! It’s that simple. Despite having limited income, I have found that those struggling with money are more likely to have no idea how much is coming in or where it’s going. They also make poor financial decisions, buy expensive and overpriced consumer goods and rarely review their finances, which is why they remain broke and trapped in a rut.

 

Some of the new challenger banks have neat features that allow you to manage your cash more effectively on your smartphone. They give you expenditure summaries and send an alert to your phone when money goes in or out of your account. I’ve just had an alert on my phone advising me that a Direct Debit payment just left my account. If I use my card in a store I’m also immediately alerted. 

 

Summary Lesson 5

 

Thinking of yourself as a business, and following best business practice, will transform your life. Even if you work for someone else you can still have the mindset of a company hiring yourself out for money.

Action Steps

• Follow the 3 R’s formula – Read or Review, Revise and Record
• Read everything to do with your money
• Revise agreements and investments
• Review your finances monthly, quarterly or at very least annually. 

Congratulations on completing this module. In the next lesson, we will be looking at tracking your income and expenditure.

 

Millionaires and millionaire habits have been studied and documented at academic levels for the last hundred years. Bestselling books, like The Science of Getting Rich and Thinks and Grow Rich, were written almost a century ago. I have also published my own book on how people get wealthy: Yes Money Can Buy You Happiness. You can find it on Amazon: https://www.amazon.co.uk/Yes-Money-Can-Buy-Happiness/dp/1095175858

 

We know exactly what the millionaire habits and traits are, as success leaves tracks. All you have to do is follow their tracks to become wealthy and financially free!

 

If you would like to learn more about investing and managing your money, become a professional property investor, or would like to be financially free without working any harder, watch this free on demand training.

 

I will give a special free gift which can help you to immediately transform your finances when you attend the online training.

Click on this link to watch the free training now https://bit.ly/3wLWqx2