Face the Music

If you have been following along, I introduced you to the concept of a financial “Fuel Gauge.” Here are the 8 marks that create a full financial tank: 

Today, we will begin looking at step 1 out of 8 - a Balanced Budget! 

One of my employees stomped into my office, clearly frustrated, and slammed the door behind her. “I am never getting ahead. I always feel like I’m spinning on a hamster wheel that doesn’t go anywhere. Every time I think I’m ahead, something happens and I’m behind again!” By the tone of her voice, I could tell that the blame seemed to be shifting to how little this person felt like they were making. Because I pay this individual, I knew exactly what they were making, and it wasn’t chump change. In fact, I knew that it was quite a bit over market rate, so I decided to dig down a little bit to see what was actually going on. 

“How much do you make?” I asked softly. “Somewhere around this amount, I think.” “What do you mean, ‘You think’?” I responded. “Do you know how much you make? Like exactly how much you make?” Silence. There was no response. We both knew the lack of a clear answer pointed to the heart of the issue. 

As we were getting started, my wife and I sat in our kitchen with $0 to our name and we were in the exact same boat as this employee sitting on the other side of my desk. We had no idea what we brought home and we certainly didn’t know how much was going out or where it was going. 

“Ignorance is bliss,” is a common cover up for financial fear. Many say that to know what is going on in their bank accounts will increase their worry and fear. These people believe that if they just ignore their money, then the only time they would need to worry is when they run out.

So here’s my question for you today: Are you ready to face the music? It’s time to see what you know about your money. How much are you bringing in and how much are you spending! 

On a sheet of paper or in an Apple note, I want you to write down how much you think you make a month (an average over the past three months) and how much you have spent per month (again, an average over the last three months). Once you have done that, download RocketMoney, connect your accounts, and let it show you how much you have actually spent and made over the past several months. 

Once you have faced the music of where you’re actually at today, you are ready to begin balancing your budget, a skill we will work on next week.

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Zach Santmier is the owner of Trumble Agency, Inc. and the author of the personal financial course, Increase. He focuses on helping families escape paycheck to paycheck living so they can freely pursue their ideal future.