“How much do I really need to know about my finances?” asked my client.
Ah, a tricky question. And the answer is one that will be different for each person who asks this question. The answer will also be different from every expert you ask.
I am by no means an expert in finances. But I do consider myself knowledgeable about assisting people in finding a path to wealth that works well for them. Everyone needs to know enough to make solid decisions about where they’re heading.
Once you know where you stand this red-hot moment and where you want to land, you can attract the resources to get you there in a more joyful manner. I have watched many financially tortured souls turn their perspectives around in an hour. As a result, they start taking different action to manifest a totally different financial status.
Here are 5 steps to manifesting money like a badass:
Step 1: Make an agreement with yourself.
Decide to stick with this journey until you get the prize. The prize and journey are an ongoing process, but you must stay in the game long enough to find your perfect path.
Nobody knows what is perfect for you besides YOU! Some people can’t stand numbers or knowing details about finances (I used to be one of those people!). Decide that you’re up to this. It’s never too late to build wealth; just start!
And things that have baffled you or triggered resistance before can become your superpower.
Step 2: Know your current financial status.
But don’t bury your head under the pillow yet! Just because your balance sheet may not look like how you want it (or you want to burn it), it provides valuable information.
If you don’t make it mean anything bad about you, you can use it to create solutions for your future. I promise, it’s well worth any effort and personal growth you have to do in order to have peace and joy with money.
So you need to find out…
- Your income per month. (If it varies, get an average from the past 12 months.)
- Your expenses. If you’re in business for yourself, you need to know both personal and business expenses.
- Debt owed on anything and everything. Whether it’s your credit cards, house and car payments, or money owed to your best friend, write it all down.
- Amount of money in savings, stocks, mutual funds, etc. and their ROI (return on investment).
- Create a balance sheet for any rental properties as well.
Make this process simple. You need to capture it on paper. Whether it’s on scratch paper, in a spreadsheet, or you have it all detailed in your accounting software program, this is your snapshot of your current financial status.
Use whatever format makes it easy for you to read. If it’s not, you’ll want to avoid it. You need to make friends with knowing your numbers. If you create a good relationship now, it will get even better as you grow your wealth.
Whatever you need to do to make finances fun, do it ASAP. I always like to make money a game so that I’ll stay engaged in the process and keep moving forward.
Yes, even paying off debt can be a fun game. I play games like seeing how much more I can pay on the debt in a month than I did the previous month. Even if the number only increases by $5, it’s progress!
Step 3: Know your money habits.
- How do you react when times are tough?
- How do you react when you receive more money than you’re used to?
- Do you benefit from the way you spend, save, and earn, or do you suffer?
- You need to know what’s working and not working in order to create a relationship with money that’s healthy and fulfilling.
- How do you spend?
- How do you save?
- How do you invest?
Step 4: Decide how you want to create wealth.
If you don’t know where you’re going and the path to get there, you may be lost forever.
Do you want to earn your money from a job, a business, or by investing? A combo?
If it’s a combination of all of these, what percentage of your income do you want to come from each?
What do you enjoy?
What are you interested in?
Who can assist you?
You won’t be an expert in all areas and you may not want to be an expert about any of this, but you need to know enough in order to hire and direct the perfect people for you.
Step 5: Decide how much money is enough for you.
Another trick question! After expenses, what else do you require for security, comfort, and pleasure? There’s no limit to your answer, and it will constantly change. You need to know if what you’re doing and thinking today will lead you to the desired results.
My advice: Decide to have more than enough. Become a master of your money instead of feeling powerless to it. Print this article out and make money mastery a priority for this coming year.
Make friends with money and make it a big lovefest! It’ll love you up something fierce. Let it in.
What are you excited to learn about wealth creation this coming year?