In the Love Yourz post, I concluded by saying that it’s important to create a sense of autonomy (and appreciation) over your own life and its opportunities. Now, I know this is easier said than done in a world where career and financial outcomes are often influenced by systems and powers beyond our control: treasuries and governments, histories of economic inequality, the black tax, old boys networks, gender wage gaps and more. But even in the midst of these grand systems, I believe there are small actions we can take to still hold the reins of our lives and our futures — or at least parts of them. If I did not believe this, I would not be writing this series.
With managing money, I have become a firm believer in a quote by Peter Drucker, the legendary management philosopher: “you can’t manage what you can’t measure.” It’s not until you understand your net income flows, your average expenses and other key parameters in your financial life that you can really control your finances. Of course the fact that money, like Bob Marley will have you know, is numbers helps with the measuring. Most of us rarely take the time to audit our own finances — I bet even our accountant and auditor friends barely do this. We know that businesses would collapse more if they weren’t audited yet we never think about applying this concept to ourselves. No wonder we cry about mid-month crises twelve months a year, the figures we earn notwithstanding.
I challenge you to take at least a month to audit your expenses. Incomes are rather easy, but also important, to track as they are relatively less frequent. I would recommend the Money Manager app for Android and Wally for iOS. Both apps are secure and free to use for most basic features. They allow you to input your expenses and incomes one-by-one, to categorize them and to schedule regular payments. You can even upload the receipts and export the data in Excel sheets and stuff. They also offer you insightful graphs and stats on your spending habits. By tracking your expenses this way, even if for just a month or two, you can easily see the layers of fat you need to trim and finetune your financial intuition over time.
Another powerful (and empowering) thing I’ve done to understand my finances over the last year is I’ve created a dashboard where I track (and regularly update) my financials: goals, assets, debts, budgets, projections, etc. I’m no tech whiz so the fancy-sounding financial dashboard is simply a Google spreadsheet I built with tabs on the various categories. Apart from the fact that I no longer forget anyone who owes me money (I see some people shaking lol), I can see all my money shit in one place which helps in making all manner of decisions. I can see how much I have left in college loans on the Loans tab and then on the Assets tab create a pie chart to visualize how my assets are distributed into diverse classes. And because I am extra-conscientious (and probably vain) I can also do a little spreadsheet Math and see the net value of my shit (assets – liabilities) to the nearest cent. It’s not that much in case you’re curious.
Will doing all this make you wealthy? Uhmm, no. At least not doing just the tracking. Still, it will offer you more knowledge, control and consciousness over your money. The more control you have, the better you manage and grow your funds and ultimately, the better your chances are of being financially secure in the long-term.