The Daily Financial Audit
The Amplified Impact Podcast
May 2nd, 2023
There are a ton of misconceptions about what wealthy people do with their money.
I recently heard someone say that they don’t obsessively check their accounts every day…but that’s not true. I do it, and so do many other wealthy people.
Checking your finances daily might not seem healthy, but it’s important. In fact, it helped me transform my relationship with money over a decade ago.
See, I used to be in a really bad place financially. I was accumulating more and more debt, and I was so anxious about checking my checking account that I just stopped doing it altogether.
But then I started using a financial daily planner… and that changed the game for me. Every single day, I do an audit of my finances. It’s a really quick process, and it’s the first thing I do in the morning. I sit down with my laptop and my journal, and I go through everything.
And let me tell you, it’s been a game-changer. So if you’re struggling with your finances, I encourage you to give it a try.
The more you measure your finances, the more in tune you’ll be, and the faster you’ll turn your finances around. Trust me, it’s worth it.
TWEETABLE QUOTE:
“Sticking your head in the sand or running away from the problem isn’t going to solve it. It’s just going to delay it until the day where it’s now such a big monster, it can completely wipe you out of this game of life.” – Anthony Vicino
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Episode Transcript:
Anthony Vicino [00:00:02]:
There are a lot of misconceptions about out there about what people with money do with their money versus what they don’t do with their money. And not just talking about like what they buy or what they don’t buy, but where do they put their money? Do they put it into a checking account? Do they put into a savings account? Do they buy treasury bills? Like, how do they track their money? All these things. There’s a lot of assumptions people have about what people with money do, but in my experience, a lot of those people are wrong. I was watching a video recently on YouTube where a guy was pointing out how rich people don’t obsessively check their bank accounts every single day. I found it really interesting because I personally do do that. I was like, oh, that’s not true. I do this. And I know a couple other people who are very wealthy and way wealthier than me that do the same thing.
Anthony Vicino [00:00:59]:
And I was like, this is really interesting. So then I kind of audited my friends who I would consider very successful and wealthy and I was like, you know what? The most of them, they might not do daily audits of their finances, but they got their fingers pretty tightly on the pulse, whether that’s daily, weekly, or even more frequently. The idea that obsessing over your finances and checking your checking account every single day and looking at what you spent the previous day or how much money you have left or all that stuff. There’s this idea that this kind of obsession isn’t healthy or even productive and that you’d be better spent just going out there and focusing on making more money and whatnot? To a large extent that’s true. However, one of the practices that really I believe was pivotal in helping me transform my relationship with money over a decade ago was keeping a daily financial journal. Truthfully, man. Guys. There was a time when I was living in the back of that van in the years leading up to that, where I was just accumulating more and more debt until the point where it got to 80,000, where I was to the point where I just would never check my checking account even though I knew there was no money in there.
Anthony Vicino [00:02:13]:
I was just spending the money knowing that it was probably in the red and I was going to get hit with overdraft fees. I did it knowing like, I’m probably going to overdraft, but it’s not going to change the fact that I need this thing or whatever. And I remember that the anxiety of checking the account was so great that I was like, I’m just not going to do it. I just put my head in the sound and pretended like it didn’t matter. The situation wasn’t going to change. So why look at it? Why look at it and see those numbers and have to face the reality of the situation. That’s where I was in my life and it sucked. And it bred this very negative relationship with money and the whole financial system.
Anthony Vicino [00:02:53]:
And of course it would, right when you dread looking at the thing, why would you ever really want to change it? You just want to get as far away from it as possible. And that’s what I did for a long time. And the results of that were not positive. I just kept going further and further in debt. And of course, like, sticking your head in the sand or running away from the problem isn’t going to solve it. It’s just going to delay it until the day where it’s now such a big monster, it can completely wipe you out of this game of life. And for me, then, the thing that really started to change the game was that financial daily planner, which was just every single day doing an audit. And I’ll walk you guys through in just a second, like my process.
Anthony Vicino [00:03:33]:
But it’s interesting because my dad had been preaching to me since I was a kid, he’s like, you need to have a budget and you need to have a plan. And you can’t effectively have either of those things unless you have a very firm understanding of where your finances are at any given moment. Like, what’s the point of creating a budget if you don’t know where you are? And how will you ever measure your success or failure against that budget unless you’re tracking where you are? And so the financial audit is such a pivotal piece of the puzzle that I truly do not believe that you can be financially successful unless you develop some kind of financial auditing ritual. Doesn’t have to be daily. I believe daily is the right cadence because that which gets measured gets managed. And the more you measure your finances, the tighter you keep your finger on that pulse, the more in tune you’re going to be with different inflection points. And just overall, I think that the faster you will turn around your financial situation. I just believe that.
Anthony Vicino [00:04:28]:
So for me, the financial audit is very quick. One of the very first things that I do in the morning, I sit there in my chair, I pull up in my laptop. I have my journal, an actual journal. I don’t do this in a spreadsheet. I know that there are apps like Status and Mint. There are lots of apps that can collate all your different accounts, put it in one place so you can just look at it at the click of a button. I’ve done that in the past and it’s nice, but the numbers lose meaning when you don’t have to write them out or internally generate them. I think information does not breed understanding.
Anthony Vicino [00:05:05]:
Information alone does not breed understanding. If it did, then when everybody got their cell phones or smartphones and started getting access to Google and wikipedia and like the entirety of human knowledge, all that information would have bred much smarter humans. We’re not smarter humans. We’re just more capable humans because of the tools that we have at our disposal. But just because I can look up who was the king of Babylon in 516 BC doesn’t make me smarter. It doesn’t mean I have a deeper understanding of Babylon, that time period, or the king or not. I don’t know anything about it, guys, obviously. But you understand, I hope, that information does not breed understanding.
Anthony Vicino [00:05:45]:
And we need to have a deep understanding of our finances, not just about having the information. Like just seeing, oh, I have $1,000 in my bank account, isn’t the same as understanding. Where did that money come from? Why is it at 1000 when it could be at 2000? What decisions did you make on a daily basis that made it that number and not some other number? And what could you do differently to move that number up or down? Just seeing it on a spreadsheet does not hit the same. And so what I do is I have a physical journal. I sit down, I create two columns. I date it. I create two columns. One is earned and the other is spent.
Anthony Vicino [00:06:20]:
And I just go through my bank accounts real quick and typically my credit cards, because that’s usually where I buy all my stuff through, is through credit cards. I look at, okay, what did I purchase the day before? Usually there’s like four to five different purchases and I tally them up. And then on the earn side, I go to all my primary means of income. And as you start to build more streams of income, this is going to take longer and longer for me. I have about six or seven really primary income streams. So I just quickly check them and look, okay, how much did I make yesterday? I take those two numbers. I then subtract the spent from the earned so that I can see, okay, how much did I make total for the day? And then what did I earn net for the day? I take those two numbers and I do put them into a spreadsheet where I keep track, how much have I made this month, how much did I make gross and how much did I make after expenses? And I track those two numbers and I then extrapolate them out. This is starting to get a little bit more into the weeds.
Anthony Vicino [00:07:17]:
I extrapolate them out, my gross income, let’s say, and say, okay, what would this look like if I made this amount of money every single day for the next 365 days? Because I want to understand if I am on track to hit my goal. And I have very ambitious income goals this year. I want to hit some numbers that I’ve never hit before. So to get to those, I need to be tracking religiously day by day and saying, okay, am I on track or am I off track so that if I fall off path, I can maybe make some Pivots and adjustments to get back on as quickly as possible. So that’s my process. Truthfully, it takes less than ten minutes with it. It’s not a long process at all. So the people who are like, oh, I’m not going to waste that time, or like, I could use that time better, I truly don’t know if there’s a lot of higher return on Invested Time activities out there for ten minutes just to get your finger on the pulse deeply of your finances on a day by day basis.
Anthony Vicino [00:08:12]:
I think it’s a fantastic ten minutes spent. Truthfully, maybe the only things that you could spend ten minutes better on is like, meditation, maybe breath work, maybe exercise, but really you can’t do a lot of good exercise in ten minutes, but for how little of a time investment that is, it’s well worth it. So I encourage you to start thinking, like, what would it look like to incorporate a financial daily audit into your routine and then give it a shot for 30 days, 60 days, 90 days? Maybe? If daily is too much, maybe you go to weekly, whatever the cadence is. I do believe there is tremendous benefit in going through this activity and doing it religiously, because again, that which gets measured gets managed. And if you’re winning the money game isn’t a thing that you’ve deemed important in your life, then you need to treat it like that. You need to treat it as though it is this important thing. So I hope this gives you guys a little bit of value, a little bit of insight into maybe how I do my finances. I’d be really curious to hear how you guys do it.
Anthony Vicino [00:09:17]:
Do you currently do a financial audit? Is it daily, weekly, monthly? What’s it look like? Do you keep a journal? Is it a spreadsheet? Is it through like mint.com? Share with me. Find me on social media. That’s the Anthony Vasino on Instagram or Anthony Vasino on Twitter and YouTube. Come find me. Come shoot me a DM, slide into my emails. Let me know what’s your process look like for tracking this. I’m super curious, but that’s going to do it for me, guys, as always, I really appreciate you. Thank you for taking some time to be with me here today.
Anthony Vicino [00:09:44]:
I’ll see you back around these parts tomorrow, bright and early or late and dark and whatever time you tend to listen to podcasts, I don’t know. But until then, my friend, stay hyper focused.
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