One of the first resources I turned to for understanding more about personal finance was books. One of the common, repeated themes in many of the books I read was to “Tell your money where to go.” Hmmm. My money already had a destination… the bill collectors, the tax collectors, the grocery store, the gas pumps, and the list goes on.
If I could tell my money where to go, I’d easily tell it to go straight to my pocket. Then it dawned on me. That’s exactly what it means! I was trying to over analyze something that was meant to be quite SimpOL in the world of personal finance. If you want to achieve financial freedom, you have to tell your money where to go instead of the other way around.
This illustration comes to mind…
If I’m in the passenger’s seat on a trip, I can see where I’m going. I may have an idea of the route to get there. But it’s the driver who actually makes the stops, the turns and adjusts the speed and maybe even makes a u-turn to get us where we’re going.
Not telling your money where to go is like being in the passenger’s seat. You have an idea where your money goes, but you’re not in control of it.
So, how do you get in the driver’s seat and tell your money where to go?
First, you have to know how much is coming in. Not knowing how much is coming in is like being in the passenger’s seat with a driver who is just guessing about how to get to a place you’ve never been before. You’re going to get lost or have to make a few u-turns. Highly frustrating.
Once you know how much is coming in, you decide where it goes and the first stop is YOU, even if it has to be a tiny amount to get started (savings account).
Then tell your money other places it will go, starting with those things that can’t be compromised (tithe, mortgage, power, water, childcare, etc).
Get in the driver’s seat and tell your money where to go by:
Determining how much is coming in
Deciding where it’s going out
Starting with yourself in savings
Telling your money where to go will direct it back to the person who has earned it… YOU!