Money Glee Monday #48 - The importance of knowing your numbers

While we may talk a lot about money here (surprise surprise) an area that we feel hasn't been talked about too much is knowing your numbers.

What do we mean by knowing your numbers?

While yes it seems simple knowing your numbers involves more than knowing a number. A process that could be followed could include:

  • Understand the resources (generally financial) that you currently have
  • Conservatively estimate the costs involved in the project or investment that you are looking to undertake
  • Weigh up and include a buffer (enough that will help you sleep at night) for a what if scenario where a project or investment is delayed
  • Speak to important or involved stakeholders and gauge their comfort with the financial decision and comittment
  • Make a judgement call on if you'll be going ahead with the investment or project

How to best know your numbers?

  • Research websites and look at costs, valuations etc
  • Put it on a piece of paper or trusty excel spreadsheet
  • Check and re-check to confirm that your numbers are correct
  • Include and consider assumptions that you may have made in determining your numbers
  • Check in with a financial adviser who has your interests in mind
With the power and benefit of technology there's no reason to not know your numbers

With the power and benefit of technology there's no reason to not know your numbers

The consequences of not doing your numbers

If you aren't able to do or know your numbers you run the risk of losing out, having to rely on others and creating unnecessary heart-ache for yourself

Once you have done the above and provided you feel comfortable with the decision you have made then it is then due diligence done

What are your thoughts on doing your numbers?

Did this help you? If so, please share!
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