You can tell at a glance

There’s a lot that can be said in a glance, isn’t there? For those of us who have ever made an inappropriate comment (or sound) in the presence of our mother we know too well how much impact her glance can have. And what about that sneaky glance you take as you dash out of the shower towards your wardrobe? That glance in the mirror never tells a lie.

When it comes to money most people know what kind of position they’re in. Just a glance is usually enough to reveal the honest truth. But to get this feedback you have to open your eyes.

I’ve spent many years helping people with their money. In my seminars I tell the story of the woman who never opened her bank statements because, in her words, “they were always bad news!” If you’re someone that avoids the truth in relation to your finances because you’re afraid of what it means then I’d like to encourage you to take a different approach. A quick glance will tell you if you need to make some changes.

History never lies. You can’t change it, which is why you probably try to hide it. But I encourage you to take a glance at your financial behaviour over the last three months and you’ll be surprised at what you can learn about yourself. I have an exercise called “Revealing Your Financial Future” that I developed years ago. Why do I call it this? Because your past will predict your future unless you decide to change something.

To complete this exercise take at least three months bank statements, either on paper or in a spreadsheet, and colour code them. You’ll have four colours you use and these are to represent the following types of out-goings: A) Giving/Generosity, B) Savings/Goals, C) Fixed/Family Expenses, and, D) Fun. Colour each line with the right colour to code each expense as one of the four options, A, B, C, or D. Once completed, a quick glance at the spread of colour will quickly tell you which area is taking most of your money. In my experience of helping thousands of families through this exercise it would be fair to say that people have way too much of C & D in their history and never as much A & B as they would like!

It’s never my objective to tell people what to spend their money on, so I’m not about to do that here. How balanced your colours should be in this exercise is totally dependent on you. This is an opportunity to take a glance at your situation so you can decide whether or not you’re happy with what you see. It’s then up to you to decide if you want to do something about it.

This exercise is similar to that glance in the bathroom mirror – it tells you with complete honesty whether or not you need to be better behaved in some areas.

(This article was originally published in Phil’s regular column in the Waikato Times newspaper.)