A very wise man named Solomon said this thousands of years ago: ‘Be diligent to know the state of your flocks.’ In those days, many people were farmers by trade, and their ‘flocks’ represented their assets or financial state. For us, this is saying that we need to be diligent in knowing how we are doing financially.
So the question is, are you more diligent in planning your next holiday than you are in knowing what the state of all your finances is? Are you too scared by what you’ll find if you examine it closely?! The FIRST step to managing your finances well is knowing exactly how your financial situation is TODAY. And that means being diligent – the dictionary definition of diligent is ‘marked by persevering, painstaking effort’ or ‘having or showing care and conscientiousness’.
You need to know 4 key things then:
1. How much you have in assets now (property, savings, investments, pension, cash in the bank.)
2. How much income you have coming in every month
3. Your regular expenses/outgoings
4. How much you are spending DAILY
You will now have a baseline from which to work and from which you can move forward.