I had a really great conversation with one of my clients the other day and he gave some great financial advice that he got from his dad years ago. I’m paraphrasing but it went pretty much like this:
When making a large purchase tell yourself,
“I’m definitely going to buy that item …….. tomorrow!”
This way if the purchase isn’t really important in the grand scheme of things you probably won’t actually buy it without doing the proper analysis, yet you won’t feel the pressure that inevitably comes when making large purchases. Dave Ramsey says the same thing in his course Financial Peace University. He says you should always give yourself at least 24 hours before making any large purchases.
Fantastic advice from what I gather is a pretty smart dad!
When in doubt, create a spreadsheet or write things down. It is much better to put calculations into a spreadsheet or on paper when making financial decisions. I often listen to clients ramble off numbers in their head about projects they would like to take on, and how they are going to make a tonne of money only to find themselves losing on the project because they didn’t write anything down. (Poor planning)
I prefer to use Excel (spreadsheets) because the numbers are concrete and visual. I can save the information if I want to add to it later, it saves a lot of time regarding calculations and on top of that, it is more accurate and you can go back and see if you made a mistake in a calculation.
Finally it saves on meeting time. When you’re in a board room discussing a financial matter and everyone is giving their opinions and going in circles, nothing cuts meeting time down more than hooking your projector up to your laptop. I find this shortens meeting time because creating spreadsheet that everyone can see puts everyone’s ideas that people have in their head onto a screen and once the idea has been said it no longer has to be resaid, and resaid, and resaid, and resaid over and over and over and over again.
In summary, I love spreadsheets.
Side note: Flip Charts also work very well for cutting time short.