15th October, 2012
I continue in this edition with the encounter I had with my mentor in London. Not long after my Mentor paused, a waiter strolled to his side with a small tray containing the bill for the coffee. He dipped his hand into his breast pocket and tossed a 100 pound bill in the tray. The waiter came back later with the receipt and the change. My Mentor took the receipt and a $50 bill and left some tip for the waiter. He filed the receipt carefully in his wallet while he brought out a diary from his bag to record the transaction as my wife and I looked on. He noticed the look of surprise on my wife’s face and smiled.
If you can’t track your expenses, you are out of the money game. “My dear,” he said to her, “I am very sure you are familiar with this by now except my friend is not carrying you along.” My wife nodded. “This is one of the rules of the game. In fact, it is one of the first few commandments for those who really desire to build lasting wealth. What I usually recommend to those who ask me where they should start their journey to financial freedom is that they should learn how to track every kobo that passes through their hands. I recommend that people should learn how to control their expenses first before going in search of more money. Wealthy people treat one kobo with the same degree of respect they would treat one million naira. They know that God does not tolerate waste in any form and He will hold everybody accountable for every penny that He has permitted to pass through their hands.
“I have counselled people who initially said they did not have enough money. But by the time they mastered how to track their expenses, they found that money usually appears. The truth is that the money has always been there; it never went anywhere. Usually, what is at play is acute financial indiscipline. It has been proven by research that you can save up to 50% from what you usually consider important expenditure if you look deeply into your financial transactions. In other words, half of our expenditures are not necessary. If you are able to save that it means you now have additional money to invest.
“My friend, do you know how much you have spent on this trip?” he asked me, obviously waiting for an answer.
I simply took out my diary and read out everything to him, as detailed as possible and as current as at the morning of the day we were meeting at the coffee shop. He had casually mentioned the need to learn how to control every penny in one of his earlier lessons. Coincidently, shortly after that, Rev. Sam Adeyemi recommended a book, Five Rituals of Wealth, by Tod Barnhart. I found the expenses control table there very interesting, and I started to use it to record my expenses including the date, the type of expenses, the category and whether the item is important or worthless. I usually summarised everything at the end of every month. The exercise has been an eye opener to me. It has reduced my impulsive spending to the barest minimum as I am always conscious of not having many useless items featuring in my monthly summary.
“This is good. I am impressed with this,” he beamed. “As I said earlier, a mentor is always happy when his protégé is applying the advice he gives. In your case, you have even gone beyond my casual tip on expenses control. This is good.”
“I am amazed at people’s response when I ask them to show me the record of their financial transactions. The usual response is that ‘everything is in my head.’ This is not a curse but a life of abundance is far from such people. Your memory is made for imagination; not to keep financial records. I usually ask them to go and read Habakkuk where we are asked to write the vision and make it plain to people. You cannot make progress in financial matters until you learn to document every single kobo you spend and track the trend of your expenditure. The same thing is applicable to the income that flows into your pocket. You must document the sources and the date the money flows into your pocket.
“It is only by writing your expenses down and analysing them that you can know whether you are spending your money on the right items. It is by writing your expenses and income that you can prepare a personal balance sheet which is a snapshot of your personal financial status at any given time. It is by writing your transactions that you can prepare an income statement which will enable you to match your expenditure and income, and determine if you are approaching red signals.
God wants us to have total control over the money He has given to us. When you lose control over money, you have lost control over this vital item which God has given to us to dominate the earth with. What I am saying is that it is a great offence to God for you to allow any kobo He has allowed to pass through your hand to waste. The logic is that if you are not faithful over one kobo, you can hardly be faithful over one million. I have never seen an informed millionaire who does not respect the smallest denomination of his currency the way he would respect the highest denomination. I read an interesting story some time ago. A foundation in the United States invited about 20 millionaires to a session and later sent a $5 cheque to each of them. One week later, the foundation decided to check the records in the bank. Amazingly, they found that each of the millionaires cashed the cheque within a week!
But how many of us throw away N10 carelessly without understanding that money is a spirit and it moves in the direction of those who know how to treat it? If you insult and assault money repeatedly, don’t be surprised if money refuses to flow in your direction. If you give your wife upkeep allowance, demand the record of how the money was spent before you give her the allowance for the next month.”
“My dear,” he said to my wife, “am I making sense?” She smiled and nodded in agreement.
“Working with a financial record keeping mentality is the greatest antidote to impulsive spending. I see so many people entering a supermarket and buying everything in sight, not following any written list. They went in with the intention of buying ABCD but they ended up buying EFGHIK.
Create a shopping list with a budget before you go buying. Try as much as possible to stick to the list.”
•When last did you sit down with your spouse to consider family finance?
•Do you keep a journal where you keep records of financial transactions?
•If the answer is Yes, that is great. But if it is No, start right NOW. Amazing results will follow.
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