Keeping Financial Records

Let’s look at a common misunderstanding about achieving financial success; keeping financial records.
Over the last 4 or 5 months I have had quite a few people send me information about iPhone apps that you can download allowing you to keep records of where you spent all your money.

There is definitely a place for keeping financial records but way too many people think it is THE answer to achieving budgeting success. In my Simple Wealth Steps course we spend about 2 weeks carefully monitoring where the money goes. After that it becomes a boring and fairly pointless exercise unless you need to keep records for tax purposes.

I used to keep diligent records (and I still do to a lesser extent for tax reasons) but prior to creating the system I now call Simply Budgets I used to believe that keeping records would get my money problems sorted out.

After 20 years all I had was a big box full of notepaper that was good for two things.

  1. A good laugh (like when I saw I spent $2 a week on petrol back in 1975)
  2. A good bonfire

Keeping records never did sort out my money problems!

There is a really simple reason why it never did.

If you are aiming for nothing you will always hit nothing! Record keeping is all about looking at the past, something you can not change. You can regret the past or celebrate it but either way it is history that can not be changed.

Most people wish they had done things differently, saved more, invested more wisely and generally been more aware and responsible with what they earned.

However, if you stop and think about it, looking backwards has very little chance of ever changing your future for the better.

Here’s why.

If you have kept records, you can add up all the money you regret spending foolishly over the last year and you can promise yourself you will do better next year but the reality is that in 12 months time you will more than likely be looking at similar figures as the last year.

i.e. Nothing changed! You had a desire to change but no way to make it happen.

To change, you will need to do something other than keeping records and looking backwards at the end of the year (or all year long for that matter).

Everyone reading this e-mail who currently uses my Simply Budgets software knows without a doubt that looking forwards is the key to achieving the financial outcomes they want, not looking backwards.

i.e. You aim at something from the outset rather than finding out what happened after the fact!

It is well documented that if you wish to achieve a goal, you need to first state what that goal is BEFORE you start the journey. Then you need to break that journey down into a road map with easy to achieve steps you can measure and monitor along the way so you don’t find yourself two days out from your target suddenly realising you have no possible way of achieving it.

You also need to put your plan down on paper so it is in black and white and can be viewed regularly to remind you of your intention and to help you identify the progress you have made on your journey.

I did not realise when I was inventing the Simply Budgets system for my own financial rescue that it actually is based on the principles of goal setting that have been around for donkey’s years. It only dawned on me later.

I actually taught myself about goal setting and how to break goals down into easy bite sized and measurable chunks because I went looking for a solution to a specific problem that really needed goal setting principles applied to it.

So the lesson for today is this;

Keeping records can be useful for a while but the moment you get sick or have a holiday or take time out, it will become too hard to catch up on and it will all seem rather pointless anyway because it can not change your future.

In contrast to that, preparing a road map for the future that basically is your ideal bank statement for the next 12 months in advance with daily targets to aim for that will get all your bills paid on time every time can change your future.

And the good thing about doing this is that it only takes 5 minutes a week to totally take control and change your future to the one you chose rather than the one you ended up regretting.

All you need to do is check your bank balance once a week and compare it with where your road map (budget plan) shows you need to be. If you are in front you can either go shopping or just enjoy the feeling of knowing you are in a really good place. If you are behind you have time to do something about it before it causes you major grief!

Simply Budgets is incredibly powerful in that it easily allows you to see and plan the future before you begin the journey. In fact you do not need to keep records because you actually create them before you start and then check them off as you go. It is also very easy to change the plan if you want (or need) to and if you like, you can experiment with different plans before you even start out on the journey.

And if you know you need help to make this happen, I announced at the start of the year that I would be introducing a program for people who realised that they have good intentions but find they have difficulty creating and/or sticking to their plans and they just need someone to be ‘on their case’ looking over their shoulder for a while to get them on track and past the hardest part; getting started.

I have been working on setting up the system to make this happen for a while now and as of next week it will be available to anyone who wishes to have someone looking over their shoulder who they are accountable to each week.

To date, the people who have had their budgets monitored in this way have reported huge benefits. The difference is like comparing two athletes; one with a coach and one who has decided he can coach himself!

More on this next time…. For now I suggest you dust off your copy of Simply Budgets and get stuck into setting up a simple budget to be your road map to pay your ten most annoying bills and organise to transfer into a special ‘Bill Account’ each week the amount the budget tells you is required to make that bills account work. You will not touch this money except for paying those ten bills.

If you don’t have a copy then it is way past time you did. It is such a powerful tool and the foundation of everything else I teach and talk about.

Go to if you need to order a copy for yourself.

That’s all for now. Have a great week!

Warm Regards
David Wright