This is not only a classic lyric of an all-time hit. (Gin & Juice - Snoop Dogg)... but it is my number one first suggestion for anyone interested in getting their personal finances to a place they want.
Seriously, it's not as crazy or over-complicated as some people would make it seem..
Step one. Start paying attention to your money. That's it.
It's kind of funny, but also extremely sad that the two topics we sweep under the rug in our country are sex and money. Two topics that can dramatically affect your life one way or another depending upon your psychology about them.
Fortunately the hip-hop community does its best to keep these topics to the limelight...
But seriously, these are probably the two most important topics to understand and be conscious of yet.. we act like bringing them up is equivalent to admitting we are guilty of a crime.
And there are huge consequences of doing so, but to start it just causes us to have a terrible relationships with both topics.
And more often than not we not only don't look at or track our bank accounts/ spending... but we feel sort of scared to do so. Why?
I believe it starts with the fact that we don’t learn about or talk about money early enough. And because of it, we don't handle money properly, and because of that we are ashamed to see and review how we actually spend money.
So this is your only goal to start mastering your money. Review your bank accounts and observe your finances weekly.
You might think "Oh.. I check my bank account daily so I've got this covered.".. I'm not saying check your balance to see how much you have left to spend.
I'm saying.. sit and review your finances.
Your balances are just one checkpoint, but the emphasis is on checking and reviewing your spending and your transactions.
Just observe and pay attention to your transactions. That's all.
Do this regularly.
I know this is a crucial step for a few reasons.. first I have looked into common practices of financially savvy people and the first thing that is mentioned nearly every time is they know where their money is going, always.
Second.. you probably have already experienced the benefits of tracking in other areas of your life.
A few years ago I downloaded and app to track my food intake. The app was great and allowed me to log everything I ate and drank, it automatically calculated, calories, and had a nutrient breakdown, tracked everything and displayed daily, weekly, monthly charts.. it was awesome.
Unfortunately it was wildly inaccurate.. not because the app didn't work.
But because as soon as I started tracking what I was eating.. I instantly started eating better without even trying. (Keep this in mind if you're interested in improving your diet)
Turns out this is pretty common. Just the act of tracking and paying attention to something is enough for us to improve a behavior without any other emphasis at all.
Other than just checking into my spending habits each week, I like using free resources like Mint to track all of my personal finances. This way I can review accounts to track small spending, and use Mint to review bigger picture finances like debt to income, net worth and more..
This is just one reason it's important to start paying attention to your finances. Number one.. it will automatically make you more mindful of, and improve how you manage your money.
And more importantly, consistently reviewing your finances is the foundation that allows you to build up anything you want going forward for your personal finance kingdom.
Learn more on this:
Video: Tip to tracking
Blog: Mr. Money Mustache