You Need to Do Your Personal Bookkeeping

No matter how you earn, invest, slice, dice and spend your money, one financial fundamental will hold true: you have to do personal bookkeeping to achieve and maintain financial success.

If you don’t track your personal spending and income—like with a computer—then you will likely fail to uncover the essential information required to achieve enduring financial success.

What Kind of Information Do We Get From Personal Bookkeeping?

We get an enormous amount of valuable information from the data created by personal bookkeeping. Here are some of the basics…

1) You actually know if you spent more money than you made in a given time period. This is what determines if you get to invest money for your future, or if your debt hole just got bigger. 2) You can identify the areas of spending where you have the biggest overspending issues.

3) You can identify areas of spending that you thought were much less than they actually are. 4) You can learn whether or not you are saving enough every year to reach financial freedom.

A Silly Bit of Bookkeeping Fiction to Illustrate My Point

Let's pretend you're relaxing in a hot tub at some swanky ski resort in the Alps. A respectable looking Swedish hipster hops in next to you and randomly asks you to invest your hard earned money in his business…what questions might you ask?

Obviously, you’d first inquire, “Well, what does this business do?” and “how much money do you charge for the product?” Easy for hipster dude to answer.

You Are Running the Business of “YOU”!

I really do credit much of my success to consistent money tracking. There is actually a not-so-widely known term for this process…it's called “personal bookkeeping.”

I started tracking all my income and expenses, and figuring out if the business of me was a “winner” or “loser.” As it turned out, my business was seriously underperforming. I really needed to improve the ol' cash flow.

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