What are the things you need to know when monitoring the progress in your finances? Monitoring the progress of the critical factors as income, savings, investments, living expenses and debt to achieve financial freedom is a long term strategy.
You need to have a long term strategy to win in your financial life. Implement this long term strategy to achieve financial freedom.
Focus on all the critical factors, as they are interrelated for your financial success. The monitoring process is the most important action you need to take to become financially free. What you measure you can manage.
The monitoring system
Have a monitoring system which gives you a total view of your finances. Keep track of the critical factors as income, savings, investments, living expenses and debt. Based on the monitoring system you can also make quality informed financial decisions.
You will make quality informed financial decisions as proper amount to save, invest and/or to pay off your debts. Everyone’s financial situation is different. By monitoring your finances you will also notice when you are spending more than you earn. Monitor your money in all the bank accounts.
Manage and monitor your money in different bank accounts for different purposes as necessities, financial freedom, give, education, pamper and long term savings. If the amounts in your bank account grow, you are taking correct actions. Manage the grow of your money is key for financial success.
Analyze what you can do to keep growing your money. Write the daily actions you are going to take in your agenda. Take actions to grow your money and monitor the effect. Continue to plan new actions, go out of your comfort zone and look at the effects of the actions on your bank accounts.
Keep monitoring your progress. Create a graph every month where you can visually see the progress of all the critical factors as income, savings, investments, living expenses and debt. A graph is visual and you can see the progress.
Compare this month graph of the critical factors with the graph of last month. Are you satisfied with the progress? If not, what are you going to do differently to ensure the result you want? Focus on what you want ‘I want to increase the amount in my financial freedom account with EUR 500 every month’. Be as specific as possible. Take action and measure the progress.
Keep monitoring your savings, investments, living expenses and debt. This is the way to get better. Analyze your spending and debt per category. Monitor the progress in your finances to ensure financial success.
Compare the living expenses of this month with last month. What happened? Are you happy with the results? If not, analyze the actions that lead to the result of higher living expenses. What can you do differently to cut some expenses?
When doing your finances do not focus only on paying off debt. If you focus only on paying off debt then you are focusing on your short term financial goals. If you focus on your income, savings, investments, living expenses and debt you are focusing on your long term financial goal, to become financially free.
Be creative in the monitoring process. Make graphs of all the debt categories every month. See the outstanding debt amount per category as mortgage, credit card, student loan decreasing over time.
The financial coaching process
Another way to monitor your progress is to have your own financial coach, who will support and encourage you on your path to financial freedom. Your financial coach will also hold you accountable to achieve your financial goals. You can talk to your coach on a regular basis. You will empower yourself with a great focus.
You will make a massive action plan with your financial coach to close the gap where you are now financially and where you want to be financially. The financial coaching process is fun. You will enjoy the financial coaching process, work smart and get closer to your goals. Your financial coach will help you to monitor your financial progress.
Financial coaching will force you to do things you probably will never do on your own. The experience of a financial coaching will stretch you out of your comfort zone. You will overcome your obstacles as you move from ideas to implementation. You will be pushed forward by the coaching. You will only grow if you are willing to feel uncomfortable.
Working with a financial coach is critical for your financial success. Take new actions. In order to have something you never had, in this particular case to become financially freedom, you need to do things that you have never done before.
When taking actions keep asking yourself the following question: “what new action can I take today that will get me closer to my goal to become financially free?”
For your financial success!