Are you sure you are making progress?

Abraham Lincoln once said “I am a slow walker, but I never walk back”. This is a powerful statement that displays resolve to continue making progress whenever you meet challenges in the personal finance journey.
Almost always, it becomes more fun to work towards a difficult goal if you have some sort of method of comparing your current state with your state in the past— but I will discourage you from comparing yourself with others because you don’t know where they derive their progress from. The entire point here is to keep yourself motivated towards your goals. A visual reminder of your goal can be particularly powerful, as it keeps your goal front and center in your mind and also demonstrates your progress clearly.
I find it worthwhile to carefully track my progress in four areas: Tracking my assets, debts, net worth, and my spending.
With regard to assets, I track the value of my home, vehicles, plus the balances of the investment and savings accounts I have. In a normal month, I expect this amount to move up slowly over the previous month, meaning I am actually saving money or am investing.
In tracking debts, it’s important to develop a debt repayment plan. If you are actually pushing well on that debt repayment plan, the total balance of your debts should significantly drop each month. Start paying off the debts with the highest interest rates. If you don’t see your debt dropping, you need to take a serious look at what’s going on and cut off on unnecessary wants or luxuries – I mean expenditures you can do without for a while.
Then track your net worth. This one is simple – just add up your assets and subtract all of your debts from the total. Obviously, each month, you want your net worth to be higher than the previous month. I like to make a note of the difference from month to month and I strive to increase this difference each month.
Finally, track your spending. Whenever possible, keep track of your spending habits. You could for example, divide your spending into categories –utilities, necessary food, eating out, entertainment, health and beauty, children stuff, books, etc. – and total up each category. This technique is powerful because it shows you the areas where your spending is out of control and you need to tighten up.
As I mentioned earlier, when you keep track of your progress in this way, it becomes a huge aid for setting goals. In the end, keeping track of your personal finance progress is key. It shows you quite clearly where you have been, how far you have come, and where you need to go. It helps you see the areas where you are successful— and points out the areas where you need more work. It constantly pushes you forward to bigger and better things.
In the end, watching your steps helps you follow that trail straight to your dreams, whether it’s a financial dream or a dream in any aspect of your life. But make it fun too! Treat yourself to something you like every time you make progress with your personal finance goals— kudzipepesa – it will motivate you to achieve more.
Blessed week-end to you and yours! n

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