Your money

What do I mean when I say you need to know your numbers?  Let me explain.

You pull out your favourite pair of jeans that you haven’t worn for a while and you can’t quite get the zip up.  No, they haven’t shrunk, you have expanded (put on weight…).  So you decide to do something about it.

Off you go to the gym (or Weight Watchers) and what is the one of first thing that happens?  You get weighed, then the measured and body fat pinchers come out.  At the end of that first session, you know your numbers!

You may not like them, but at least you have established a starting point to improve upon.  You were probably also asked what you would like to achieve so the appropriate plan can be put in place.  You will have picked some more numbers so you know where you want to get to.

It is exactly the same with your money.  You need to know your numbers.  You need to know what comes in, what goes out.  What you own and what you owe (your personal balance sheet).

I am amazed at the number of business owners who don’t know their numbers.  I was talking to a contractor, who told me he was a contractor so he “didn’t have to worry about that sort of thing.”  No wonder he wasn’t where he wanted to be in business or in life.

If you are an employee, it is easier to know your numbers.  You have certainty about what is coming in, you just need to work on the going out bit.  There are plenty of apps and programmes that can help you do that and then put a money plan in place accordingly.

Do you know what you are worth?

Regardless of where your income comes from, this is the difference between what you own and what you owe.  This is a very important number as it is a measure of your wealth.

When you first start out, it is quite possible this number will be negative.  Particularly if you have student loans, credit card debt and not very much on the other side, like a house, car, or retirement savings.  The goal is to get that number into the positive as soon as possible and keep growing it as you add more to what you own and less to what you owe.

For a business owner the calculation is a little more difficult, as you have to do the calculations twice.  Once for your business.  You should have your monthly business profit and loss and cash flow statement at your fingertips, this shows what is coming in and going out.  If you don’t know this, you need to talk to your accountant and start finding out.  Your business will also have a balance sheet of what you own and what you owe and how much of it is yours.

your money

The second time for your personal situation.  How much are you taking out of the business, and where is it going, and what does your personal balance sheet look like?

I have had some very interesting conversations with business owners that go like this:

“My accountant told me my business made $60,000 last year.”

“Great,” I say, “how much do you spend personally?”

Frequently there is a blank look on their faces, they just don’t know.  So we have a look at the numbers and it comes as a shock to them when I tell them they are spending $100,000 on their lifestyle and personal debt.

“How can this be?” they ask.

Then we look at what they own and what they owe and find the savings have gone down and the credit card debt has gone up.  Their wealth has gone backwards to support their lifestyle.


Now they know their numbers, they have a couple of options.

  1.  Reduce their personal spending, or,
  1.  Increase the profit of the business

Which would you choose?

If you don’t know your numbers, you are flying blind (in a financial sense), you can’t move forward unless you know where you are now, and how you are going to get to where you want to be.

If you want to know more about how to work out your own numbers, or need some help interpreting them, feel free to drop us a line.

If you want to know more about your personal numbers, have a look at our Men, Women & Money Programme.  It is designed for couples who want to move ahead financially so that they can build a successful and happy life together.

In this programme, we also look at money in relationships – it is one of the major causes of stress.


Financial Abuse

financial abuse

When we think of financial abuse the picture that pops into your mind is probably the same as mine; the elderly person with over aggressive family members (or carers) forcing them to hand over their savings and leaving them with nothing.

This does happen, unfortunately it features in the media all too often.  But there is also another, maybe even darker type of financial abuse happening and that’s to intelligent women (~70% of financial abuse cases are women).   They are left with nothing because their partners have financially abused them and left. Continue reading

Why Can’t We Make Saving Fun?

Saving money. We all know we should be doing it for retirement and have money tucked away for a rainy day.  But it is harder said than done.

The reality is, if you don’t pay yourself first, you will end up paying yourself last and there won’t be anything left!

But saving money just isn’t as much fun as spending it.  Saving money for retirement is just too far away when you are in your 20’s or 30’s, having the newest and latest piece of technology is much more exciting.

Gerry Mitchel in his recent article for The Meridian Star  ‘The Psychology of Saving’ makes some very interesting points. Here is a snippet. Continue reading

Spring Clean your Finances

I woke up this morning with the urge to clean!  No, I don’t mean the usual push the vacuum cleaner round; do a bit of dusting clean.  I mean the empty the cupboards out, see what is lurking in the back of the pantry and have a good old decluttering session.

20140928_102029Maybe it has something to do with spring; the trees are just starting to blossom and the garden is coming back to life after winter.  So the urge is there to get ready for summer.  Or maybe I am just sick and tired of opening a cupboard and all this ‘stuff’ that I don’t use or need stares back at me and it is time to do something about it.

That got me thinking, we should also spring clean our finances on a regular basis as well.  Have a look at all the automatic payments and direct debits that come out of your bank account.

Do you know what they are for?

Do you still want the service you are paying for?

It is also a good opportunity to review other expenses like your insurances, phone and power provider to see if there are any deals you could capitalise on.

What about your credit card?  If you have a balance just sitting there that won’t go away, are there any options by changing credit card company that could help reduce the cost.

Don’t forget to look at your savings, when was the last time you increased your contribution to your savings plan?  If you got rid of a couple of unused subscriptions, you could divert the money to savings instead.

Oh well, it’s back to the kitchen cupboards for me…..

If you would like some help decluttering your finances, feel free to drop us an email or give us a call


5 tips to help you cope with Money and Depression

Robin_WilliamsIt was with surprise and sadness that we learned of the death of Robin Williams.  How could someone who gave so much to everyone else not realise that he was loved in return?  The answer of course was that insidious illness, Depression.

Then I saw this headline in the NZ Herald “Williams was depressed and broke”.  It was only a few months earlier that Charlotte Dawson also suffering from depression and ‘jobless and penniless’ ended her life as well.  It seems that depression and money problems are a dangerous combination.

I don’t know the details of either’s financial circumstances other than what has been in the media.  But both had been in the situation of earning very good incomes during their careers, they enjoyed the good things in life and were able to be generous to their friends and family.  Then for whatever reason the money stopped flowing and life became even more difficult when combined with depression. Continue reading

What does wealth mean to you?

Typically in our society wealth is equated with how much money we have.  Wealth can mean different things to different people and what it means to you comes down to your core values.

key to wealthAs a money mentor I love to listen and learn from as many different experts and  differing perspectives about money as I can.  So it was with eager anticipation that I attended Dr John Demartini’s recent talk on wealth in Auckland.

I wasn’t disappointed, it was fascinating. I could really relate to what he was saying.  It isn’t just about changing your money behaviours, you need to go much deeper than that and explore your beliefs and core values.

When you ask a room full of people how many of them want to be financially free most of the room put their hand up.  When you ask the same room to put their hand up if they are financially free, very few do.  Why is this? Continue reading

The Have’s and Have Nots – The gap is growing.

Wow, what an eye opener. I have just watched Nigel Latta:  The new Have’s and Have Nots.  What a powerful documentary about the changes in the New Zealand economy, the impact on families and the widening gap between the have’s and have nots.

shutterstock_78856468I highly recommend that you watch the documentary, but if you can’t spare 44 minutes, then these are the key points that I picked up from it.

We have a new ‘class’ in New Zealand, The Working Poor.  These are the families where both parents work full time, and still don’t have enough money to meet the day to day needs of their families.

If something goes wrong and they need to borrow money; say for car repairs or a family funeral that is out of town, they have no option but to borrow money.  The banks won’t lend it to them, so they end up in the hands of the loan shops, who will happily lend them money at 10% interest.  That didn’t sound too bad until it was clarified; that was 10% per week!!  When you are desperate you tend to think in terms of  immediate needs, and don’t calculate the longer term costs so the situation just keeps getting worse.

The statistics are scary.  One in five families don’t have enough to live on.  One in three families couldn’t survive more than two weeks if the main breadwinner lost their jobs. A staggering 55% would run out of money in four weeks. Continue reading