RULE 70

Carry out a finance health check regularly

It is essential if you are going to increase your prosperity that you maintain a healthy awareness of your bank balance. You should be carrying out a finance health check on a regular basis. I think, personally, it should be weekly. Of course, you are free to do it as often as you want and if that means monthly or even longer, then that is entirely up to you but I wouldn’t recommend that you leave it too long.

My observation is that the tighter a grip you have on the pulse of your financial life:

• the quicker you can react to changes
• the more information you have to make decisions
• the less chance there is for things to go drastically wrong without you noticing
• the better a focus – and thus interest – you’ll have in your finances.

Sorry, but you do have to be disciplined about this. You have to have a regular time when you sit down and:

• carry out a bank reconciliation
• list your creditors and debtors
• check credit card balances against receipts
• check outstanding cheques – the ones that you’ve written that haven’t yet arrived in the bank
• check what future income you have and what major expenses you might have looming on the horizon
• check your standing orders
• check pensions contributions
• check investments
• check any loans
• check any overdrafts etc. (I know, I know, I have said not to have any but you are human).

If you don’t do this stuff money will leak away. Forgetting a debt doesn’t pay it.

You’ve got to be disciplined and have a routine – every Monday morning without fail. Yep, even when it’s sunny outside, even on holiday, even when you’re feeling a bit off-colour, even when there are more exciting things going on. Because if this doesn’t excite you, then you’re not going to make it I’m afraid.

Personally I think you should know what you are earning every day by the day. And you should know what big outgoings you might face in the next 12 months and that does include a most often forgotten one – the tax bill. Watch that little baby like a hawk and don’t ever take your eyes off that ball because it will get you every time.