One of the first things I do when I start working with a family that wants to change their financial situation, is showing them their current situation; how much do they spend and on what, how much they owe and so on.
For many this is not something pleasant to do and some are even quite afraid to see the numbers black on white. Many say that they prefer not to know. But do they? After all, most people that are in more or less trouble already know so. And if everything was already fine, they didn’t want to work with me, right?
Actually I think that the totally opposite is true – the more we don’t know, the more we tend to think about it, worry about, make up stories about and often I even think that we tend to make the problems bigger than they actually are!
So why is it better to know? First of all, it might be better than what you thought. Or, it might be worse than what you thought, but at least you know with what you have to deal. Because for us to make a change or to try make something better (or less bad, you choose) we do have to know what we are dealing with. And when we do know, even if it is not pretty, it is at least something concrete and therefore less scary!
Most people don’t actually know what they spend, on what they spend and how much they spend and that is why this “exercise” is a first but very important step towards improving our financial situation. Some expenses, like rent, most of us know the exact sum of, but other things, like groceries, restaurants, take-away, clothes and just miscellaneous spending most of us don’t. And this is where we normally are able to make big improvements.
So do you want to take the challenge? Sit down with your bank and credit card statements to see what goes where? You might not like what you see, but I am sure that you will feel better afterwards. There is a lot of security and calm in knowing that you have taken the first step in the right direction and from here it can only get better!
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