There are two types of progress. Tracked progress and untracked progress. When you track your progress, you discover what needs more of your attention, where you're lacking behind and a bunch of other things. With untracked progress, a person is like a wanderer in the desert. Yes, they're moving, they're going somewhere but what if the movement is towards the wrong direction or just circling the same area over and over again?
Tracking your financial progress could spell the difference between achieving financial freedom in just a decade or getting trapped in the rat race for a lifetime. It's not just enough to set financial goals, you also have to measure and track your progress. That way you'll be able to create a straight course to your destination and immediately get back on it if you start to stray from it rather than just being a wanderer flowing with what comes.
No Tracking Equals No Lasting Improvement
Can you really improve something that you haven't tracked? If you don't track your monthly income compared to the expenses, how would you know whether your monthly cash flow is increasing or decreasing?Suppose you've set a goal to have 10K in cash flow by the end of year. If you don't track it, the chance of reaching it is slim. What if your expense column has increased (thanks to inflation) while your income hasn't increased that much or worse it reached a plateau. How would you know that it's time to explode your income and/or cut down on some of your expenses? Then you might not reach the goal by the end of the year.
This is one of the reasons why many people can't stick to their financial plans and immediately abandon or forget about it when things change. They're simply not tracking anything, so there's nothing to help them stay on course.
In the long run, this can become very costly. No lasting improvement and not enough time to build momentum.
You Have To Measure Your Progress!
A good way to go about it is to do a monthly review of your financial progress. You'll assess your financial situation, analyze the 'data and KPIs'. Seeing whether you're making some solid improvements with the current direction you're taking or not. If you're not, you find ways that will help you get back on the right track.If doing it monthly seems difficult then you can do it just like corporations, every quarter aka 3 months. Either way, you have to measure your financial progress. You can only effectively improve what you measure.
We live in an age where changes seem to be happening rapidly and in a fast pace. Our attention span is getting shorter. Being distracted has never been easier. Don't allow yourself to be financially distracted. Track that progress and stay on course.
In Conclusion
Can you imagine how traveling was like before the invention of the GPS? bad is an understatement. It was quite horrible! People were getting lost every single time. With GPS, traveling is a breeze now. You can't get loss unless you have no internet connection.Tracking your financial progress will not necessarily make your financial journey a 'breeze'. But it will help you in steering a straight course and not getting lost along the way.
Thanks for reading!
Profile: Young Kedar
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