Understanding Your Money Dials
Being a great salesperson is more than just having the ability to sell a product or service. Salespeople also need to understand money. You can be the most successful sales rep on the sales floor, but if you don’t understand how to manage your money, you won’t necessarily be rich or wealthy.
How you manage your money will determine your future quality of life. It’s not just about making more money; it’s about understanding how to keep and grow the money you make. It’s about understanding your spending habits; money dials can help you better understand that.
What are money dials? Money dials are the things that you spend your money on. If you don’t have a handle on your money dials, you’re probably wasting a lot on things you don’t need.
Some people have more money dials than others. That’s not necessarily bad, but it is something to be aware of. The more money dials you have, the more you need to be aware of your spending habits.
Money dials provide an excellent way to establish what you see as important vs what isn’t important when managing your money.
There are 10 main money dials as termed by Ramit Sethi, and each of us generally has one or two areas we love spending money on. The 10 areas are as follows:
- Convenience
- Travel
- Health/Fitness
- Experiences
- Freedom
- Relationships
- Generosity
- Luxury
- Social Status
- Self-Improvement
If you were to look over your current spending habits, what category do you spend most of your money on? Currently, my #1 would be fitness, but that area has been different in the past. To live a rich life, I believe that health and fitness are of utmost importance. I believe health and fitness would be considered worth $10,000, so I’m happy to spend the money on it.
Alternatively, what would you choose if you had $50,000 to spend on the above areas?
Money dials help you direct your spending to the things you value, rather than wasting money on things you don’t care about. Money dials help you cut the costs related to things that just don’t matter to you and help you spend unashamedly on the things that do.
Learning What Your Money Dials Are
If you’re not quite sure what your money dials are, that’s okay. It takes some people a little bit of time to figure it out. Here are a few exercises you can do to help you determine what your money dials are:
1. Make a list of everything you spend money on in a month. Include everything, no matter how small.
2. Once you have your list, highlight the items you feel good about spending money on. These are the things that make you happy or that you feel are worth the cost.
3. Take a look at the items you didn’t highlight. Is there any that you feel guilty about spending money on? These are things that you may want to cut back on.
4. Finally, look at the items that are left. These are things that you’re not sure about. They may be things you feel are a waste of money or you’re not sure they’re worth the cost. Take some time to consider these items and whether or not they’re worth your hard-earned money.
Once you’ve gone through this exercise, you should know your money dials. Remember, there is no right or wrong answer. Your money dials are unique to you and your spending habits.
Additionally, asking yourself what you thoroughly enjoy spending money on can give you your answer.
For example, do you love to travel? If so, travel may be one of your money dials.
Do you enjoy going out to eat? If so, experiences may be one of your money dials.
Do you love to work out and stay in shape? If so, health and fitness may be one of your money dials.
Think about the things you love to spend money on and use those as clues to help you determine your money dials.
Knowing your money dial is about what makes you happy regarding how you spend money.
The most successful are extremely conscious when it comes to personal finance habits.
They know their money dials and ensure their spending reflects that.
If you want to be successful with money, get to know your money dials.
