Financial record keeping

0:01- There are a lot of things that we like to keep track of in life, but maybe one of the most important is your finances. Now, when you're younger, your finances, it's nice to keep track of it. Maybe you get an allowance, maybe you have a job where you're bringing a little bit of income in walking dogs or babysitting, and even then, it's really good to know where is your money.

0:23Maybe some people owe you money because you walk their dog and they haven't paid you yet. You should write that down someplace so that you can knock on their door a couple days later and say, "Hey, you said you were gonna pay me $10. What happened to it?" That's one reason.

0:34And then the other is to just keep track of on a weekly basis, monthly basis, annual basis, how much money are you bringing in? And also keeping track of how much money is going out. When you spend your money, whether it's on a treat, you're buying a milkshake or you're going and buying some gift for someone or buying something else that you like, you wanna make sure that you're doing that in a sustainable way.

0:56If you're bringing in a certain amount of money every week or every month, usually you wanna spend less than that in that same amount of period. So maybe you could save a little bit money, but definitely not run outta money. And then as you become an adult, the stakes become a lot higher because if you run out of money, you might have trouble paying your rent.

1:13You might have trouble making a payment or renting your car. You might not have enough money for food, for entertainment, for other things that you care about or just money for a rainy day. And that's not a good situation to be in. And the best way to understand how likely that is, is to keep good financial records and to have a budget.

1:35And we'll talk more about budgets in other videos. Now, how can you keep financial records? Well, even if you had a dog walking business or you were getting an allowance, you could write it down in a notebook someplace, money coming in, money going out. You could have a spreadsheet if you want to get a little bit more sophisticated.

1:49There's even apps that you can download that help you keep track of the money that's coming in and out. As you become an adult there are those apps, and you could use a spreadsheet, but you're likely to also get a statement from your bank. These days you do a lot of your banking online and in your bank statement, which you usually get every month, it'll show the money that's coming in from, say, your paycheck and other sources and the money that's going out that you're using to pay the bill, or if you're using your debit card to actually pay for things.

2:16And sometimes the bank or sometimes another app can take all of that information and then clean it all up and show you a clearer picture of your finances. But the big picture is when the stakes are high and your finances are really determining what you can afford to do.

2:32It's good to have good records. It's also good, frankly, if there a mistake happens, if you're like, "Wait, I didn't spend $50 there. Let me call up the bank and see what happened". That's happened to me several times. That's another reason to have the records and then be able to look at your records later.