Why Don't People Know Their Numbers?

We spend years of our lives learning the basic necessities of math class. Add, subtract, multiply, and divide, yet today when I talk to people over and over again I run into people who either like or don't like math. Why?  The truth is, they just don't want to know the reality of the situation.

What numbers should you know? Once you start working you should know some very basic numbers to succeed in this life. Knowing these numbers will help you control the present, prepare for the future, and gain the things you want and all you have to do is know the basic functions you learned as a kid.

• Income: How much do you make? For some this is easy, you have an hourly rate or yearly salary and your paycheck is pretty steady week to week. For others, it is variable, making monthly planning a bit more difficult and providing an excuse not to know. If you do your taxes every year or have someone do them for you, you know how much you made for the year.  Now simply, take that number and divide it by 52 and what do you know? That is how much you make week to week. Some weeks are high, and some are low, but your income planning number is nothing more than your yearly wage divided by 52 weeks.

• Expenses: How much do you have to spend every month? When asked, most will tell you their mortgage, utilities, insurance, and a handful of things that they are aware of. But most will have no idea how much they spend eating out, buying groceries, buying stuff for the home, etc. If you do not know this number, you are out of control. You are probably part of the 40% of this country that is living paycheck to paycheck wondering why you cannot save for a house or buy groceries or anything else you can think of. How do you figure this out... Simple addition, look back at the last month and look at what you purchased. Then place them in buckets and add them up. I guarantee the first time you do this you are going to be surprised because most people have no idea how much they are spending.

• Net Earnings: Again another simple equation is Income - Expenses = Net Earnings. That is how much you have left after you have earned your money and covered your expenses.  

• Savings Rate: Simply put, how much are you saving? Take Savings/Income and you have a savings rate. You should be targeting a minimum of 15%, but ideally should be more like 20% when you consider planning for future expenses.

If you can get control of these numbers, then you can start to manage your life to take care of the present, prepare for the future, and get some of those things you want.

Give it a try for the next 30 days and if you are still struggling, then it is time to get some help. We all need coaches to help us through rough spots, so let's get started today. Maybe you know someone who could use some help, share this post with them, copy me on it and I'll give them 1 free consult, like all my customers, but I'll throw in 1 more month to get started.