If I had to choose the most important component of personal financial planning it would be tracking. By tracking I mean the willful act of orienting oneself relative to his curve. The more habitual and routine the act the greater the likelihood of success. It’s just that simple.

Orienting is a process, a series of steps with the objective of bringing a conscious focus to bare. It’s like the beam of a flashlight when it strikes the object you’re searching for. It creates an immediate bond, an undivided interest in the object. It begs the question, “Is this object what I expected it to be or not?”

If the object in the beam were a personal financial goal like having enough for a down payment on a house the steps below exemplify how the process would work.

Goal: My plan is to save $25,000 for a down payment on a house. To accomplish this goal I will put $1,000 a month into a new savings account. In 25 months I will have enough for the down payment.

1. Every three months I evaluate my progress towards reaching the goal.
2. Six months into the plan I review the savings account balance.
3. The balance is the account is $4,015.
4. I expected it to be about $6,035.
5. I investigate what happened.
6. I had an emergency repair on my car which set me back two months.
7. I reevaluate the goal in light of my present circumstances.
8. I still want the down payment on the original schedule so I figure out how to make up the $2,000 over the remaining 19 months.

The beauty of tracking is that it works. It keeps you on target through periodic check-ups grounded in reality, real numbers not fantasy. It’s like your bathroom scale if you’re trying to lose weight.

Tracking is the most important tool out there to reach your goals.

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