How to do a financial assessment
You need to do a financial assessment of your spending. Do an assessment each time you are faced with a purchase. You grade that purchase and put a value on it to weight its importance.
If you have a wife, partner, whatever, you and your partner need to rate everything. You and your partner rate on a scale of one to five.
This is how to do a financial assessment. This is how to create financial discipline. If you don’t have financial discipline you can never be wealthy. It’s impossible to create wealth without financial discipline.
The rating or ranking isn’t just based or dependent on money spent. You also have to consider the energy and time it requires.
Time, energy and money are all related. Energy becomes money, time becomes money and money can buy time.
How to do a financial assessment:
- One—A very high chance of producing or increasing income.
- Two—A good chance of producing or increasing income.
- Three—Some possibility of producing or increasing income.
- Four—Very little chance of producing or increasing income.
- Five—No chance of producing or increasing income.
Here’s an example of the rankings in action. Going out to dinner with only your spouse. Very high chance of income? Good chance of income? Some possibility of income? Very little chance of income? No chance?
There’s no chance for income going to dinner at a fancy dinner unless you’re famous.
Now, if you took a famous friend or two to dinner you might spend twice the money but you increased your chance of producing or increasing income because you’re networking. Much better than no chance with just yourself and spouse going.
How about a motorcycle, a TV, going to a movie, Netflix? Just rate it. Anything and everything.
That’s how you work money.
For more money exercises and insights check out “Money & Finance” a three-hour live video training session where I walk you through:
- financial awareness drills
- financial seniority ranking
- five financial principles
- and many more financial freedom principles
