Last week on the phenomenal woman group with my girls we talked about finances and I realized that many want to experience financial freedom. I also noticed that financial journaling was strange to many.
Financial journaling is sadly dismissed as an activity best left to low income earners so they don’t go into so much debt. I really disagree with this school of thought because if you can handle your thousands effectively right now, you will handle your millions the same way too.
So here’s why you need a financial journal;
- To set, tackle and achieve money goals
Let’s say you have a goal of saving a million Naira for 6 months to buy a house, journaling will help you know if the goal is realistic and how you can achieve that. At the end of the day, you may need to cut down on your expenses to ensure you meet your goal. This is because your journal will keep reminding you of your goal to buy a house after 6 months whenever you are tempted to spend unnecessarily.
- Recognize and predict the pattern of your expenses
Overtime you will notice patterns and spending you can predict and Plan for. A financial journal will help you stay on top of things and be in control of your money when spending becomes overwhelming. It can also help you adjust your spending pattern if it will not gear you towards achieving your money goals.
- Keeps track of your savings and expenses
You become mindful of where your money is going to and it also let you know if you are spending more than you are earning. It will keep track of your savings each month and whether it would be enough to achieve your financial goals.
- Changes your mindset
There is a mindset shift towards spending unnecessarily without proper allocation of your income. You learn proper allocation of your income. By allocation , I mean dividing your income into three – one for bills(living expenses) , another for investments(property or stock portfolio) and the rest for treats(vacation, designer items and the rest). This way you spend responsively.
- Takes you on a journey to learning money management
You get to learn ‘first hand’ money management. It helps you identify what works for you and effective strategies you have employed towards getting closer to your money goal.
Keeping a financial journal does not have to cost you anything or be fancy. Go get a book and start today.