Tracking your finances is essential because while most people know their income, few understand where their money actually goes; by regularly measuring key financial metrics such as savings rate, surplus cash flow, and debt-free date, individuals become more conscious of their spending habits and can make informed decisions to improve their financial position, similar to how tracking fitness goals leads to better health outcomes.
Deep Dive
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Deep Dive
Do you actually know where your money goes each month?Added:
You are earning more money than you ever have in your entire life, but where does it all go?
Nobody knows. We know exactly what comes in each month, but where it goes, that's the key. We need to start tracking and measuring everything. [music] Once you start tracking and measuring your numbers, you know exactly what's coming in, what's going out, you're conscious, things start to move forward. Just like that Fitbit on your watch there, if and when you are using that to track your steps, you take more steps. And so, that's the same with your money. to be starting to look at numbers, know what your savings rate is, your debt-free date, your surplus cash flow position. These are critical numbers, kind of like your body weight, that you need to be tracking on a regular basis.
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