Before we get into updating your personal finance compass with real numbers, I want to start with the right guiding principle in mind. So this lesson is really about the mindset of financial management. And the rule is that visibility is power. You don't have to change anything at all. But it is critical for you to accept that you need to know exactly how much you spend. You need to be transparent, and you need to be aware of your spending habits, your spending routines, and that's how you're going to unlock some ideas and some potential opportunities for a better savings or a better financial management in the future.

But like I said, Now, the point is simply to say, you have to know what those numbers are. Okay, so visibility is power. And I know that for some of you, this may bring up a feeling of guilt. This may bring up discomfort that pushes you away from willing to look at those numbers. And yet, if you're here, if you're having this training, it's most definitely because you're keen to learn you're keen to change, and you want to know how you can get to a better place. Well, let me tell you the first step is to accept that visibility is power, and to confirm the numbers.

So how can the life compass help you in gaining more visibility? The first step will be for you to categorize all your spent into different buckets. It's like having buckets of goals that you fill in with certain activities or certain things. So for example, you may have your grocery you transfer your rent, your hobbies, your restaurants and bars. Anything that you do and spend money on should be falling under a bucket. And your finance compass will come with some standard categories that you can use and you will also be free To add your own individual categories, the rule here is to absolutely avoid the other bucket.

It needs to be as small as it can be. And the reason for this is because many people try to use the other buckets to excuse some of the expenses. You must gain visibility, remember the principle. So I'm going to challenge you to put as much transparency in your categories as possible so that you have a clear bucket for every expense. For example, if you spend time learning a new language as an extra activity, make sure that you have a bucket for extra courses and education. If you like to put a lot of makeup and that you spend considerable amounts on cosmetics, make sure that you have a cosmetic category.

If you work out and you use special nutrients and proteins You want to split this from your grocery bucket and have one just on workout related nutrition. You see the point the point is split those buckets down as narrow as possible so that you gain the best granularity and the best visibility. Visibility is power. Now, we are ready to start filling in this finance complex where you're going to look at your expenses and put them into buckets. Remember, visibility is power. Applying this principle is going to make you successful.