A Quick Lesson
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A few days later, Paul drops by Mary’s house. If you will recall in my previous article, Meeting Mary for the First Time, Mary asked Paul to perform a few simple tasks.
She had given Paul a blank passbook, the kind you get at the bank when you open a simple savings account. Mary had given Paul his first task, record every transaction he makes, no matter how insignificant these transactions were.
Paul was short on time so Mary took this time as an opportunity to give Paul a quick lesson about what he was doing.
“Tracking daily expenses is the first necessary step toward any kind of financial success.”
Mary explains after seeing Paul’s homework for the past few days. Mary goes on to explain to Paul that this basic fundamental is the deal-breaker between success and failure.
Since Paul is not a wealthy man by any means, in fact, he is drowning in debt and struggling to make monthly payments, Mary explains that she is teaching Paul how to do his own accounting.
By tracking how much money and where that money is going out, Paul is about to discover a powerful tool that can only be found between his ears.
But first before he can begin using this powerful tool, Paul must keep tracking everything for a whole month. Mary encouraged Paul to instruct his wife and children to do the same with their transactions. By doing this, Paul will begin to acquire “raw data”, a key ingredient for the most powerful tool available in everyone’s mind.
As promised, at the end of the month, Paul begins to realize something about his raw data. Upon discovering a few numbers here and there with his wife and children, Paul begins to see the magical power his tool possess.
Simple things like overdraft charges and multiple weekly movie rentals were costing his family $300 dollars a month. Paul begins to realize this money is being thrown away for no justifiable reason. The tool in his mind begins to start working. The processors starts firing up and assimilating the raw data.
What would you do if you had an extra $300 per month?
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Comment by Brooke on 21 April 2008:
An extra $300 a month could be turned into $3000 a month in retirement! Here’s the math:
$300 x 30years x 8% compounded= 3000
It’s definitely worth it.
By the way, you’ve been tagged for a meme over at my site!
Brooke’s last blog post..Strawberries!
Comment by Mark from TheLocoMono on 21 April 2008:
Good point on the growth of $300. It is certainly one way to handle an extra $300 dollars.