Featured Coaching Excerpt - Notes & Transcript, Part 1
Step #5: Determine To Document Your Financial Life So That You Can Identify Outlier Expenses
Notable Quotable: “Beware of little expenses; a small leak will sink a great ship.” -Benjamin Franklin (Was one of the Founding Fathers of the United States. Wikipedia)
Ask Yourself: What costs can I cut out from my financial statements?
Definition Magician: A basic operating expense of a business that cannot be avoided, such as a rent payment. (www.accountingtools.com)
[funk music] Step number five: Determine to document your financial life so that you can identify outlier expenses. So, what Benjamin Franklin said, he said, "beware of little expenses. A small leak will sink a great ship." So, talk a little bit about this. A small leak will sink a great ship. I should not have done this. The action I did this month was good. I'm glad I did this action. But I could have handled it better. I could have done it better. But I discovered on my credit card there was a $29.99 charge on my credit card. I print it off every month. And I'm going, "who spent $29.99 on my credit card?" "What is this?" And no one could tell me what it was, and Marshall, I lost my mind. I went around, "what is this?" "What is this?" Now, the principle, is I know every single expense, what it was. But I was so upset about that expenditure. I'm just telling you, I lost my mind, because I had to get down to the root of who's spending that money. You have to get fastidious. Fastidious, I'm talking about maniacal, detailed planning. You gotta print off your financial statements and look at it and say, "What can we cut here?" You have to do it. You've got to be very, very specific to do that. And you have to set up a specific time to do that. You have to get excited about savings. You have to find how can I decrease my cost by 10%, and you have to have one master document. One master document of all your recurring expenses, like your payroll. I call them fixed costs. They're called fixed costs. So, your lease, that's a fixed cost. Your payroll, that's a fixed cost, let's say. Your whatever. Those are fixed costs. But, you have to know what those fixed costs are so that if anything is an outlier, something that is not something you've agreed to in advance, not something you've budgeted for, not something you've planned for, you have to say, "no," and attack it with aggression.