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.


Money Beliefs, where do they come from?

Our beliefs, or our view of the world starts with our early childhood memories.  We learn from our parents, our environment and form our own beliefs from those observations.  So what are your earliest memory’s of money? How do you think that has impacted on how you relate to money now in your adult life?


My earliest memories of money revolve around the word ‘No’.  No I couldn’t have the umbrella with the pink frill; the must have winter fashion accessory for a 4 year old.  No, I couldn’t have a Barbie doll, they were too expensive, so I got the imitation one instead.

My parents were (and still are) very careful with their money, they were quite frugal in day to day expenditure but that meant that there was money set aside for our holidays and should any emergency crop up.

Their goal was to be mortgage free, as they hated any sort of debt and over the years they achieved that goal.

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Financially supporting our Children. When does it stop?

It is an exciting day and also tinged with a bit of sadness when our children leave home. Maybe they are off to see the world, heading to university or flatting with their friends.  Does this mean we stop supporting our children financially?  This question can become the elephant in the room for many families.

elephant compressed

The short answer seems to be no we don’t stop supporting them financially!  Among friends and clients it seems many of us with adult children are still helping out in one way or another.

The agreement we had with our children was we would support them during university and after that they were on their own.  Sounded like a really good plan at the time, but over the years it hasn’t quite worked out that way.  The number of parents in the same boat as us seems to be growing.

The old adage of children leaving home at 18 or when they finish their tertiary education and supporting themselves, has disappeared for a high percentage of parents.  We are faced with the dilemma of supporting our children for longer than originally thought.  This can cause friction between the parents.

This story was told to me in a humorous way, but there were serious undertones.

“Our son came back from overseas, no money, no job, so of course we welcomed him back home.  Six months later he is still here, he has a job, but isn’t contributing a penny. Continue reading

As a child, what is your earliest memory of money?

Our beliefs, not just about money, but on how we use language, our view of the world all starts with our early childhood memories and the beliefs we formed from those observations.  So what is your earliest memory of money, and how do you think that has impacted on how you relate to money now in your adult life?

My earliest memories of money revolve around the word ‘No’.  No I couldn’t have the pink umbrella with the pink frill the must have winter fashion accessory for a 4 year old.  No, I couldn’t have a Barbie doll, they were too expensive, and so I got the imitation one instead.

My parents goal was to own their own home mortgage free, and to their credit they achieved that.  But it did mean we moved house a lot and each time we traded down, so the mortgage kept getting smaller.  By the time I was at university they were debt free and have been ever since. Continue reading

Children and Money: To Teach or Not to Teach…

Financial literacy for children is a hot topic.  Start them young so they learn to save not spend, is one school of thought.  But what if as a parent you are struggling with your own financial literacy can you be a positive role model?

money box

Children and money is always a very interesting topic of conversation.

The question of what to teach children about money and when to start is something I am asked quite frequently in my role as a money mentor.

I really like Rob Stocks article Cents and Financial Sensibility , his 10 point checklist, whilst somewhat tongue in cheek, does have a few gems in it.

Teaching your children financial literacy should go hand in hand with their understanding of maths. There is no point trying to teach the value of $20 or what you can buy with it if the child can only count to 10.

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11.5% of Teenagers Worry about Parent’s Finances

Teenager’s awareness of family financial issues seems to be on the rise.  Concern over parent’s ability to put food on the table, a decrease in the availability of part time work has been reflected in the Auckland university survey.  Does this really mean the problem is getting worse? Or are parents communicating to their teens more about financial matters than they have in the past?


A recent university of Auckland survey of 8,500 teenagers in 91 secondary schools as quoted in the NZ Herald has found some interesting (but maybe not surprising) results around what is happening in the household around money.  Teenagers are less likely to have a part-time job than the teenagers in 2001, where 49% of them had jobs compared to 26% in 2012.

It is quite easy to look at this statistic and say it is simply due to the global recession so there is less work around for teens, although I am sure there is an element of truth to that.

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