Have You Done Your Accounts?

At least once a year you and I have to ‘do our accounts’ – or have someone do them for us.
This is usually just about financial affairs – business and personal finances – but what about everything else?
In our financial accounts we look at our ‘profit and loss’, our ‘assets and liabilities’, and although it’s not part of the required financial returns we might also look at our ‘cash flow forecast’ and ‘budget’ to predict, or attempt to predict, what is going to happen over the next twelve months.
But despite what our Accountants and Financial Advisors would like us to think sometimes (sorry guys!) life is not just about money.
Money s a bit like the fuel we put in our cars – we don’t really ‘want’ it for its own sake, we just need it to make other things happen.
Unless you want to start a fire (bad idea, there are safer ways) petrol isn’t a lot of use outside your car’s fuel tank – and money isn’t a lot of use unless, like petrol, you are using it to make something else happen.
Petrol makes your car ‘go’.
Money makes your life ‘go’.
According to how we drive we get so many ‘miles per gallon’ out of our petrol and although more complex its similar with money.
You and I get something out of ‘using up’ our money, and like petrol, if we don’t have enough, we may not be able to get where we want to go.
Unless we get some more ‘fuel’ for our journey.
With petrol it’s simple – we buy some more when we need it – with money of course.
So that we can manage our money we need to ‘do our accounts’.
How much is coming in, how much going out, what do we own and what is owed to us and what do we owe to others or need to spend on maintenance and so on.
How does it all flow in and out?
Doing our financial accounts is essentially a simple process, although sometimes not easy which is why we need experts to help us navigate through the issues of compliance and taxation and so on.
But what about everything else?
What about the rest of our lives, a good proportion of which is fuelled by money?
In an insight called ‘What’s On Your Radar?’ I described four domains of life: Self, Others, Giving and Receiving.
This is now being developed into a ‘Personal Accounting’ system very similar to the form of the familiar ‘financial accounts’.
What have you ‘given’ out and what have you ‘received’? What are your personal ‘assets’ and what are your personal ‘liabilities’?
And how does your life ‘flow’ holistically from month to month and year to year.
Financial and management accounting is all about keeping records, measuring, and comparing so that first everything can be kept ‘in balance’ and then to ensure it all remains in balance.
You and I can do this with our lives as well.
What will your ‘Profit and Loss Statement’ and ‘Balance Sheet’ look like?
And what about your ‘Life Flow Forecast’?
In finance we talk about ‘balancing the books’ – what if we started to do that in life as well?
Would we be in balance or would we have an overdraft or surplus in our life account?
Are we ‘overdrawn’ on our health and wellness, unfit, overweight, not eating or doing the right things?
What about our relationships? Are they in ‘credit’ or ‘debit’?
Are our ways of thinking, beliefs and faith, ‘assets’ or ‘liabilities’?
What are our personal maintenance costs and how much are we ‘depreciating’?
You and I use our money to buy all sorts of things – are they assets or liabilities?
And are they ‘expenses’ or investments?
What does your P&L (Profit and Loss) account look like? Is what you ‘receive’ (in everything, not just money) consistent or in balance with what you receive?
Are you carrying forward an emotional profit or loss to the next year?
Are you ‘happy’ with your current year or not?
And if not what’s the plan?
What’s your ‘forecast’? What are the goals you wish to achieve? What will it take, in all domains of your life, to achieve them, and do they contribute to your overall vision or dream for the life you would love to live?
You and I get taxed on our income according to the amount of money that is left over after our legitimate expenses. How does that work in life?
The taxes we pay are in effect part of our ‘giving’ to society, albeit not voluntary, but we still contribute. Should you and I make other types of contribution to reflect our ‘’life accounts’?
It’s one thing to do all this accounting the get a picture of where you and I are up to now, but t’s another to do the budgeting and forecasting about where we want to be, and who we want to be, do and have in the future.
That’s why, like a Satnav, you and I have to know where we are now, not just financially but in all aspects if we are going to figure out how to get where we want to go.
Have you done your personal life accounts?
If not, it’s time to hold yourself to account and if you need help to work it all out . . .