Numbers Don’t Lie

by Galia Gichon on September 28, 2010

While we are not defined just by our numbers, they tell a significant part of our money story. Some of us have a different money story than what the numbers say. However, the numbers don’t lie….. The issue lies within is that we don’t take the time to examine our numbers. By not looking at them, we are only adding to our stress. 72% of Americans say that money is the #1 stressor, ahead of work, children and health (Amer. Psych. Assoc.). When we put on our money blinders we incur fees, a low FICO credit score and don’t save as much. By examining them, we can then take an action step no matter our situation. Here are a few stories about women with numbers that don’t lie but numbers that helped illuminate the true financial picture in a positive way. I also included a quick exercise to get you started.

Spending. I worked with a client to create a weekly spending plan of $300. (Do you want to create your own customized spending plan? Send me an email and we will create one for you.) She came in and right away said she hadn’t kept it but thought she over spent by about $100. We then logged into her Mint.com account to quickly tally up what she actually spent on a weekly basis. In fact, most weeks she was spending $600 – 700 per week! She was truly spending unconsciously. Just by doing this exercise, she was convinced and motivated to stick to a spending plan.

On a positive note, another client didn’t realize she had stock options that were worth over $100,000! She never fully understood how they worked and barely opened her statements (she even has an MBA!). Within minutes, we planned for her to pay off ALL her student loans and have enough for a down payment. It was better than winning the lottery because she had EARNED that money. Plus, she learned so much about stock options and how they affect her compensation going forward.

It is very common for those of us with debt to not know the real number. A woman in one of my recent seminars ran a credit report and realized she owed much more than she thought. She had so many credit cards that she could not put the complete picture of her situation together. She thought she owed $10,000 but when she ran her credit report, it was actually $23,000.

What can you do?
I always start my seminars with this simple exercise. Write down the numbers for the following. If you don’t know them, your homework is to keep filling them out every month.

OWE. Write down the total number you owe – credit cards, mortgage, student loans, family and friends loans. Everything.
OWN. What is the current dollar amount of all your investments and savings? Not what they were pre-2007.
SPEND. How much do you spend monthly, including variable expenses?
EARN. What did you earn in 2009 and YTD?

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