Archive of ‘Finances’ category

3 Money Reports Smart Entrepreneurs Need to Read Every Month

| Bookkeeping, Business Basics, Finances, Small Business

3 Money Reports Smart Entrepreneurs Need to Read Every Month

You’re finally using a cloud-based bookkeeping software to keep track of your money. While it’s added a lot of ease to your system, it might also be confusing to figure out what you need to pay attention to within the software.

And more importantly, what can you use to help you make financial decisions that help instead of hurt your business?

There are three reports that I think every smart entrepreneur needs to read on a monthly basis.

If you’re allergic to numbers, don’t worry! I’ll make sure you understand what’s most important on each of these reports so you’re only focusing on what matters.

3 Financial Reports to Read Monthly

1) Income Report (Profit and Loss)

Basically, this report gives you an overview of how profitable your business is based on what you’ve earned and what you’ve spent. It represents a period of time, unlike a balance sheet, which shows a specific point in time.

The lines you’ll see on an income report in WaveApps, for example, are:

  • Revenue – How much money came into your business and from what sources
  • Cost of Goods Sold – If you manufacture products, this could be manufacturing costs and labor. If you’re an online business, this is usually merchant fees.
  • Gross Profit (aka Margin) – This is what’s left over after your the cost of your goods sold.
  • Operating Expenses – This is all of your other expenses, like admin, software, travel, etc.
  • Net Profit – How much your business made after expenses

2) Sales tax report

First, in Canada, this is important for businesses that make over $30,000 in a single quarter or within a year, whichever comes first.

Second, sales tax shouldn’t be confused with income tax. It’s like how the tax is included in the price when you buy gas.

The point, though, is that as a small business owner, you are now responsible to give back, or remit, the tax charged on your sales to the government.

This report helps you understand what you owe.

3) Balance Sheet (aka Statement of Financial Position)

This statement answers these two questions:

  • How much does my company OWN?
  • How much does my company OWE?

In short, it gives you a more detailed view into how your business is doing financially at one point in time. It’s typically reviewed at the end of a month, quarter, or year. Or all three. 🙂

On the report, you’ll see:

  • Assets (aka debits) – Value that your company owns, e.g. cash, inventory, etc.
  • Liabilities (aka credits) – What your company owes to others, e.g. mortgage, credit card debt, payment for assets
  • Shareholder equity – Net worth of your company, which is what’s left over after all your debts have been paid

Bonus: Trial Balance Report

This is a bonus since it’s mostly used by bookkeepers and accountants. A trial balance statement gives the current account balance in your bookkeeping, which is used for creating financial reports at the end of the year.

Before we had computers, you’d have to create this first before checking any other reports.

Now, however, it’s primarily used for double checking if your computer program has calculated everything properly.

Its purpose? It makes it easy to see all of your account balances for a specific date. It also helps when switching from one accounting program to another because when starting a new program, you need to enter all the correct balances of each account on the date you switch over.

Your financial reports are only as accurate as your books are organized, so if you’re behind on inputting data or categorizing transactions, your numbers won’t be telling you the truth. If you need help getting your books in order, especially before the busy tax season arrives, click here to get in touch with me. 🙂

Have a question? Leave it in the comments below!

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Save More Money in Your Online Business by Doing This

| Bookkeeping, Finances, Small Business

Save More Money in Your Online Business by Doing This

You’ll hear a lot of advice around making more money in your business, but how often do we talk about the ways we can save more?

Money is a hot-button topic for many people, and they’ll often ignore it until it’s no longer possible to ignore. (Cough, tax season seems to be a popular time to remember to get your money organized.) By doing so, they leave money on the table.

What’s even more unfortunate is that they don’t know how their business is truly performing throughout the year. Income does NOT always equal profit, and they can’t make smart shifts if they don’t know what’s going on financially.

But let me get off my soapbox and get back to how you can save more money in your business. 🙂

Beyond the more obvious solutions of spending less or creating a budget, what else could you do to save money?

I have just one solution for you: Keep your bookkeeping organized.

Accounting and bookkeeping can be boring, I get it. It’s far less exciting than marketing or hosting a retreat for your clients, but it’s 100% necessary.

And since it’s never going away, you might as well get your bookkeeping system in place so it helps you more than it hurts you.

Here are three of my top recommendations for organizing your bookkeeping.

3 Ways to Organize Your Bookkeeping

1) Go digital & jump in the cloud.

Long gone are the days where you had to keep a ledger with paper and pen, so do your business a favor by making sure that everything you spend and earn can be tracked digitally.

This is more than just keeping all of your expenses and income in a spreadsheet. It’s signing up and learning how to use some kind of cloud bookkeeping software, like WaveApps, Xero, or Zoho Books.

Do the same for your receipts. Don’t just leave them in a physical shoebox somewhere. Instead, go for a system that’s already set up to help you succeed, like the digital apps Shoeboxed or Hubdoc.

When you do this, you’re able to generate financial reports that show you how much you’re earning and spending. It also makes tax season so much more doable.

2) Schedule in a weekly “CEO Date”

The only way you’ll ever be able to make wiser financial decisions is by knowing what’s happening money-wise in your business as often as possible.

This is a concept that Lacey Craig mentioned in her Creative Money interview, and it was such a great reminder for everyone who wants to run a profitable business.

Some tasks that you could do during these “dates” are:

  • Checking your account balances
  • Check your pending transactions
  • Check your invoices to see which haven’t been paid
  • Pay yourself

(Not sure how much you should be paying yourself? Read this article.)

By having a CEO date, you keep a finger on the pulse of your finances and can be more proactive when it comes to saving for taxes or knowing exactly what you can afford to invest in.

3) Keep Your Business and Personal Finances Separate

The only way you’re going to be able to see an accurate picture of your business’s financial health is if you keep your business and personal finances separate. I’ve talked about this maaany times before, and it’s something I won’t ever stop saying. Get a business bank account as soon as possible.

When tax season rolls around, you won’t miss any expenses because there were too many irrelevant transactions to sort through. You’ll know exactly where your money went and be able to use those expenses to lower the amount of taxes you owe, thus saving you money.

Bonus: Hire a bookkeeper.

No matter how organized you are, there are going to be things that you won’t know about bookkeeping and what practices could save you money.

So, like so many business coaches recommend, you have to know when to delegate. That’s where bookkeepers, like me, come in.

We help you identify what’s important to pay attention to and take all of the nitty gritty stuff, like manually categorizing transactions, off your already full plate. If you’re interested in talking about what working with me as your bookkeeper might look like, get in touch with me here.

Have questions about how you can organize your bookkeeping? Leave a comment for me below or send me a message at lisa@lsbookkeeping.ca.

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How She Invests: An Interview with Adrienne Dorison

| Finances, Interviews, Small Business

How She Invests: An Interview with Adrienne Dorison

With all of the options online these days for training programs and tools, it can be difficult to discern which is best for your business. That’s why I created the How She Invests in Her Business series. My hope is that the insights you read from these smart & savvy women help you decide how to make smarter financial decisions so you can stay in business for a looooong time.

Today’s Interview: Adrienne Dorison

This interview is with Adrienne Dorisona business consultant and change agent who has worked with small and large companies worldwide to help them sharpen and improve their business performance.  When I first learned about Adrienne, it was from hearing about her Good Businesses Do Good™ movement where she encourages and equips entrepreneurs to earn more, so that they can then give more back to the world.

As you’ll see in the photos and read in her answers, she’s a passionate dog-mom, student-loan debt eradicator and financial freedom advocate who also enjoys CrossFit, rolling around on her yoga mat with her Bernese Mountain Dog, and cookies.

HOW YOU INVEST

What investment has made the most impact on your business? What was the impact it made?

Investments in myself. I don’t believe I would be where I am today without investing in my own growth and development through mentors that believed in me and supported me along the way. The best investments I’ve made were:

1. A mastermind led by a mentor to have the guidance and support from someone who was more advanced in a specific area of business than me and the group of entrepreneurs who not only ‘got it’ but created a healthy competitive spirit for me to believe in myself and what was possible.

2. Live events, because there is nothing more powerful than connecting with people, live and in-person. This will fast track relationships with people that you may not have the opportunity to deeply connect with online. All of my best mentors, friends, and clients have come from live and in-person events. 

What’s one investment you’re thinking of making right now?

We’ve just made an investment with a lawyer because we’re working on some licensing of IP that needs expert eyes!

Before you decide to invest in something for your business, what do you do?

Know our goals, our gaps and work the numbers. We, as a team, get really clear on what our goals are for the next 3-12 months, identify any gaps that we have in getting there, and run the numbers to see if making this investment is necessary and will be ROI generating. 

What has been your experience with hiring your first team member / contractor?

Hiring my first team member {who is still with me over 2 years later} was critical for me to take some of the things off my plate that was keeping my growth stagnant. I was spending too much time trying to do everything in the business, which wasn’t allowing me to do the work that brought the money in.

What position, if any, are you planning on hiring next? (CPA, bookkeeper, graphic designer, etc.) Why?

We have no plans to hire anyone in the near future! We’re making sure we’re maximizing everyone’s roles with who we’ve got. We filled some gaps last year on the team and don’t have any big ones right now. 

WHY PEOPLE INVEST IN YOU

Who do you think your mastermind program “Connected” is a good investment for? Why?

Connected Mastermind is for entrepreneurs who want to better utilize relationships to grow their business — that also includes the relationship with ourselves {the most important one as we grow} to make sure our strategies are aligned with our desires.

I believe we’re all 1 degree of separation from the person we need to know…whether that’s a potential new client, a media connection, a book editor, a collaborative partner, etc. and Connected Mastermind is about bridging those connections intentionally throughout our year together. We also bring everyone together 2X a year live and in-person because relationships move at the speed of light when we’re truly together. It’s for anyone who wants to create massive growth, with huge support. Building a business can be a lonely place, but it doesn’t have to be. 

How do you use what you teach in your own business / life?

Connection has been the lifeblood of my own business and fast growth, and I’ve been really intentional with relationship building since day one. I think that’s why I’ve grown really quickly, and relatively easily. I want to really KNOW people, and serve them, not just treat clients, colleagues, and opportunities as transactional. I’ve invested a lot of time, money, and energy into people and that’s what I believe has created both deep internal and external business success for me. 

HOW YOU INVEST IN OTHERS

How do you give back to your in-person community?

A business that is intentionally serving other meaningful causes with their time, money, or expertise. 

In what other ways would you like to give back?

At first, I was allowing my clients to choose where they each wanted their 10% to go {10% of their investment in me went to a charitable cause of their choice}. But, once I saw that many of my clients didn’t really know how to decipher between a well-intentioned organization and an organization that was making a REAL impact on the world, I felt it was important for me to research, connect with non-profit founders, and support only those that were doing work in the world that was not just great on the front-end, but also made long-term, measurable impact on the intended causes.

I have chosen causes that I feel personally aligned with {entrepreneurship, animals — I have a wildlife conservation background 😉 and domestic abuse} and organizations that I’ve vetted to make sure we’re creating real change together. 

BE VIRTUAL FRIENDS WITH ADRIENNE

Adrienne hangs out on her website, her podcast The School of Self-Mastery, and on the social channels below. If you join her email list, she’ll give you the 9 sales emails she’s used to generate $773,555 in 2 years. Go say hi to her!


 

 

 

 

 

 

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Is WaveApps Right for Your Business?

| Bookkeeping, Finances, Small Business

Is WaveApps Right for Your Business?

So you’ve heard of WaveApps, the accounting software, and now you’re wondering what all of the fuss is about. Is it really comparable to other software like Xero, Freshbooks, or Zoho?

And, as a small business owner, how is it going to make your life easier, if at all?

Before I tell you about WaveApps, I want to remind you that no software is perfect and that many of the suggestions I give are going to be made for accountants and bookkeepers. So they take time to learn.

What’s most important is that you choose one that fits for the size of your business and the type of work you do.

Also, any cloud-based software you choose is going to be a step up from the standard spreadsheet-style bookkeeping.

Overview of WaveApps

WaveApps is free accounting software. It’s cloud-based, which means that it’s online and all of your information is kept on the Internet as opposed to your computer.

It’s free (no, really) and was made primarily for small business owners, consultants, and freelancers. While that price tag can be very kind to your bank account, it also means that you give up features that other software, like Xero or Freshbooks, provide. You’ll see these in the section below about the downsides.

Is it easy to learn?

Yep, Wave is one of the easiest cloud-based software to learn. When you sign up for an account, you’ll be prompted to connect your bank accounts (including PayPal) and credit cards. It works even if you have international bank connections or use a foreign currency.

After connecting your accounts, you’ll be able to track your income and expenses, send invoices, and read reports to see a bigger picture of your money.

You can access reports for:

  • Financial – Balance Sheet and Income Statement
  • Taxes – Sales Tax and Payroll Wage (paid feature) and Tax Report
  • Customer – Income by Customer and Aged Receivables (how much money is coming in and how long you’ve been waiting for it)
  • Vendors – Expense by Vendor and Aged Payables (which expenses you haven’t paid yet and how long overdue they are)
  • Other – General Ledger (similar to a general overview all of your accounts), Account Transactions, Trial Balance (can see all account balances), Gain / Loss on Foreign Currency Exchange

You can customize all of the reports by date.

What are the downsides?

There are a few downsides to using WaveApps as a small business owner, and I’m going to break them down into three categories: accountant jargon, technical bugs, and Etsy sales.

1) Accountant jargon – To be fair, Wave does a great job of always trying to make things easier for small business owners who aren’t accountants. That being said, there is still a lot of jargon that an entrepreneur would have to learn to be able to make the most of the software. What’s more, if you’re not familiar with how your books should be kept, you often won’t know if there’s a bug or if something isn’t being properly recorded. Mishaps like that could lead to you paying more than you owe in taxes or making decisions based on false information.

2) Technical Bugs – Since it’s a free software, identifying and fixing technical bugs takes a bit longer (2+ days). What do I mean by technical bugs? One I encounter regularly goes like this. Let’s say your balance sheet says there is $100 in your bank account. But when you go to the Transactions screen, you have $90. You then go check the balance of your account, and it’s also $90. That means that somewhere in all your transactions, there’s a mystery $10 difference. In other words, you have a “ghost transaction” that you now have to sift through and find. Even as a trained bookkeeper, transactions like these can take me 1-2 hours to find. Not the best way to spend your Wednesday, right?  

3) Etsy Sales – If you sell on Etsy, you’re able to collect sales through Wave, which is great. However, since you’re also connected to PayPal, those sales will be recorded twice. That means your sales numbers will be misleading unless you go through and manually merge the two transactions. That’s also a time suck.

Why should I use it?

1) Better than a spreadsheet – While Wave isn’t perfect, it’s also a major step up from spreadsheet-style bookkeeping. That means tax time will be easier to manage because everything has already been captured and recorded.

2) Free and easy to set up – It’s free and setup is painless, which is great for any entrepreneur who is bootstrapping her business. That being said, it also allows room for growth by giving you the option to invite your accountant, bookkeeper, or team member into the software.

3) Responsive customer service – The customer service is really responsive and attentive. If you’re confused about why your numbers are wrong or how to get rid of duplicate transactions, you can open up a chat box from directly within the software and be connected to someone.

4) Easy to learn – Much of the software, like looking at transactions and invoicing, is going to feel intuitive if you’re tech savvy. If you encounter something tricky or want to learn how to use the software to its fullest potential, there is plenty of information available. You can start with a free series of articles called Wave University.

5) Multicurrency option – With most accounting software, multicurrency is either unavailable or an add-on for a higher-priced subscription. WIth Wave, though, you can invoice and receive funds in any currency, which makes it a lot easier to do business with clients abroad without worrying about the exchange rate.

6) Can save credit card information of clients – Clients can choose to save their credit card information so that each time you invoice them, all they have to do is click “Pay Invoice.”

Quick rundown of WaveApps

  • Started doing business in: 2010
  • Based in: Toronto, Canada
  • Cost: Free
  • Credit card processing fees: %2.9 + 30 cents (varies for non-Canadian / non-US countries)
  • Automatic billing: No
  • Payroll available: Yes ($15 + $4 per employee in the US)
  • Multicurrency: Yes
  • PayPal payment option: No
  • Etsy connection: Yes
  • Shoeboxed connection: Yes
  • Freshbooks connection: No
  • Customized invoices: Yes
  • Mobile app: Yes
  • Option to collaborate with team members: Yes

Still have questions about whether or not Wave is right for you? Leave a comment below or send me a message.

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Take Control of Your Finances: Training

| Bookkeeping, Budget, Finances, Personal, Small Business, Tutorial

Congratulations!

You’ve made it to the final step of taking control of your finances! If I could, I would definitely give you a big hug (I was going to say pop a bottle of champagne, but alcohol is usually one of the things people can trim).

If you’ve been following along, you’ve done the first three steps in the process of finding financial prosperity:

  1. Tracking
  2. Targeting
  3. Trimming

Now we can move onto the last step: Training.

Now that you know where your money goes, what your financial goals are, and how you’re going to get yourself there, it’s important to keep up the work.

It’s so easy to be tempted to go back to your old ways. But, unlike the proverb suggests, you can absolutely teach an old dog new tricks.

Treat it like going to the gym to maintain your physical health. You want to do the same and keep up your financial health.

Let’s discuss ways to maintain your financial fitness.

How to Maintain Financial Fitness

There are a number of ways to do this, and I think the simplest one is to keep learning.

Read financial books, watch videos, or even hire a bookkeeper (like me!).

By reading about financial matters in books and articles online and by continuing to keep up with your finances, you can make it a part of your everyday life and make it easier to maintain.

Financial health is a lifelong process and one you should continue to keep up.

Most importantly, think about paying it forward. Don’t keep your newfound financial knowledge to yourself!

Teach your kids, neighbors, or coworkers about finances. Make recommendations to others on how to get more information regarding money and how you got your finances in order.

For example, in my house, I teach my kids the value of money by opening their own savings accounts.

They have to decide how much to save and when they want to buy something they have to count their money to see if they can afford it.

Resources Recommendations

Here are some resource recommendations:

Books

Websites

Facebook Groups

Podcasts

Money Coach

Bookkeeper

If you get stuck, I’m here to help. You can ask me questions directly on my Facebook page. 

Keep up the good work!

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Take Control of Your Finances: Trimming

| Budget, Finances, Personal, Small Business, Tutorial

 

You’ve tracked. You’ve targeted. And now?

Now you get to Trim.  

Now that you know where your money goes and what your goals are, you have a better sense of where you can “trim” your spending to achieve those goals.

Ready? Let’s get started.

How to Trim Your Finances

Start by reviewing your tracking work. You may have some surprises from when you initially categorized all of your spending habits…. like discovering you spend way too much on transportation when you thought you were spending too much on eating out.

Now it’s time to start trimming.

Note your biggest overruns. Are they shopping, food, entertainment?

Look carefully at these categories. Where can you cut back?

For example, do you need your cigarettes or daily Pepsi?

The easiest way to start trimming is to replace your bad habits. I know, easier said than done, but it works. If you need help with this, I recommend starting with this article from James Clear.

The most recent thing I started to trim was the amount of junk food I bought. I found that just buying junk food on Fridays, as a treat, saved 300 dollars a month!

If you have a debt repayment goal, here’s where you can start making dents. Shift your spending from one of your categories (and bad habits) into your debt.

You can also look at other areas to trim your expenses so you can put as much money toward spending down your debt.

I know it’s tough, but you can do this.

Here are some tools to help you with your trimming.

Create a balanced budget

Start by creating a balanced “budget.” This budget worksheet from Gail Vaz-Oxlade called Gail’s Interactive Budget Worksheet is a great tool to help keep you on track from month to month and help you not go over in certain categories.

Use the Debt Repayment Worksheet

Another tool to help you redirect your money towards your debt and savings goals is the Debt Repayment Worksheet. This worksheet is another one from Gail Vaz-Oxlade and will help you “snowball” your debt and use it to pay down each of your subsequent debts faster. 

You can also use this Savings Calculator from Tangerine to help see how much you need to save each month to reach your goals.

Make it a Habit

No matter what your targeting goals are, frequently look back on your tracking and continue to trim any overruns you have in your spending. Shift your spending towards paying down your debt or towards your financial goals.

You’ll need to review and reevaluate every month to keep on track.

Being financially “fit” is a lifelong skill, and you need to have constant vigilance to stay on top of your money.  But now that you have the tools, you’re ready to tackle your money goals each and every month.

In the next post, we’ll go over how training will help keep you on track with your finances. So stay tuned and come ready to hit the financial gym. 🙂

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Take Control of Your Finances: Targeting

| Budget, Finances, Personal, Small Business, Tutorial

 

So you’ve done all the tedious work of tracking your finances to see where your money has been going. Enlightening, yeah?

It’s time for the next step in taking control of your finances: Targeting.

While we complete this step, continue to follow your spending by adding any new expenditures to your spreadsheet or paper. You won’t need to refer to your tracking work for the targeting task so you can mostly set it aside for now.

Just don’t forget to keep adding anything new. It’s an ongoing habit that will continue to benefit you.

Targeting

Targeting is a form of financial goal setting. It’s a way to identify your financial goals, write them down, and set a loose plan on how to achieve them.

So what are your financial goals?

Do you want to help pay for your children’s college education? Do you want to own a home? Will you need to care for aging parents down the road? What about giving money to your church or other charities? Do you want to take a big trip with the family?

Those have all been financial goals of mine, and they tend to be common ones.

Goals

Now here’s the hard part.

Take a pen and paper and write down each financial goal you have.

Write down the goal, how much money you’ll need to reach it, and a specific date you want to reach your target.

For example:

Goal – Own a house
Amount needed – $150,000
By – January 2020

Do this for each financial goal you have.

It’s important to write each one down, including a number, and the date you want to achieve it by because once you have it written down, it becomes more real.

If you don’t write it down, it’s a dream, not a goal.

Once it becomes a goal, you can start to think about a plan of attack because without a plan; you’ll never achieve your dreams.

Debt

Another area to target during this step is your debt. Just like with your financial goals, write down each debt, who you owe, the total amount, and when you want to have it paid off.

For example:

Debt – Personal Credit Card
Amount – $1256.32
By – December 2017

Next Steps

It can be scary to see all these numbers laid out in front of you, but it’s even scarier to choose not to do something and hope you get what you want.

Now you can see what’s important to you and to give it the weight it deserves.

Having your goals and debts written out also gives you the leeway to sort and prioritize them.

Think about what you want to tackle first. Is it saving for a house or giving to charity?

While each of your financial goals is important, you may not be able to achieve everything at once. That goes for debt repayment as well.

Right now one of my biggest financial goals is to save $45,000 dollars, which I’ve calculated to reach in 3 years, so that I can pursue traveling full-time with my family. Big goal, right? But now that I have one, I can get super clear on the plan to achieve it. 

Next time, we’ll have very specific steps on how to tackle your debt.

We’ll dive into how to trim your money to help make your financial goals that you wrote down today. You’ll learn how you can repay your debt and continue to take control of your money.

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Take Control of Your Finances: Tracking

| Budget, Finances, Small Business, Tutorial

Last time, we talked about the four steps to taking control of your finances. And today, we’re going to start down the path to financial control with Tracking.

Here’s what to do first. Gather up the last six months of your bank, credit card, and any other financial statements.

Why? Because it’s the best way to track where your money goes.

You’ll see the most results with your money if you have an understanding of your spend behavior and choices. Without it, you won’t be able to take control of your finances and make informed decisions around money. Like, you’ll just keep buying all those candles you know you don’t need and kick yourself about because you’re still in debt. Or those shoes. You get what I’m saying.

Overspending is a very real and tricky thing, and I want you to have control over it instead of it controlling you.

Once you have the last six months of your statements, we can get going.

The good news (and the bad news) is that Tracking is the most challenging part of the four steps to financial control.

That’s because sorting through six months of financial statements takes… a while, but trust me when I tell you that it will be worth it in the end.

Start with your bank statements, then follow those with your credit card statements, and end with any other transactions and miscellaneous financial statements.

Don’t forget about any ATM withdrawals. You may have to think carefully about what you spent your cash on, especially if you no longer have the receipts. It’s alright to estimate your cash purchases as long as you’re accounting for all your money.

As you look over each statement, break down your transactions into these categories modified from Gail Vaz-Oxlade:

  • Housing. Anything that has to do with your house will go here, mortgage payments, or rent and any maintenance or insurance.
  • Utilities. Electricity, cell phone bill, cable, and any other type of utility bill goes here.
  • Food. Everything you buy that’s food related. Your daily trip to the coffee shop should definitely go here.
  • Shopping. Anything and everything you buy that isn’t food.  
  • Transportation. Car payment, air travel, taxis, or bus money goes here.
  • Entertainment. Sporting events, concerts, movie tickets, and the aquarium all count.
  • Bank fees. Service charges and ATM withdrawal fees would fall here.
  • Debt payback. All student loan payments, credit card payments, and any other loan payments go here.
  • Savings. Any money that you put towards your savings should go here.

You may want to do this with a spreadsheet so you can quickly add up the columns. Some banks may even have the option to download your statements so you can easily transfer the information into your spreadsheet. But if you don’t want to do it that way, a large pad of paper and pen will do just fine.

Sorting your transactions will take the most amount of time. So go slow. You may want to set aside 30 to 45 minutes a night to complete the task, so you don’t get overwhelmed.

Choose a category for each transaction. When you’re done, add up each of the categories.

Look at those end totals. Are there any surprises?

More often than not, you may be shocked by where your money is going each month. And that’s ok because now you know.

When I suggested this to a friend of mine, she was surprised to see how much she had been spending on coffee alone, which is a common story.

Overall, this knowledge will help you get a handle on your finances and help you move forward with your money instead of backwards and in more debt.

In the next post, we’ll dive into how to target your money and help you make financial goals. I’ll offer lots of advice and tools that will help you take control of your money. So stay tuned next time and come ready to Target. (That’s the next step. It’s not an invitation to go to Target. 🙂 )

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Introduction: How to Take Control of Your Finances

| Budget, Finances, Personal

Introduction: How to Take Control of Your Finances

Does this sound like you? Do you have a hard time sticking to a budget? Does saving for your goals seem impossible? Do you pile up receipts and bank statements not knowing where your money went?

If so, it’s time to take control of your money and finances.

In this next series of blog posts, we’ll explore what is needed to get a handle on your finances and how to make sense of saving and budgeting. We’ll also explore how you can get to real financial prosperity and what it means to you.

Four Steps to Financial Prosperity

Did you know there are four steps to financial prosperity? They are:

  • Tracking
  • Targeting
  • Trimming
  • Training

All t’s! I did that on purpose. 🙂

We’ll explore each one on the way to helping you gain financial control all with the help of Canadian financial advisor Gail Vaz-Oxlade.

Gail Vaz-Oxlade, of Til Debt Do Us Part, Princess, not only has a series of TV shows, she has a plethora of books and a financial plan designed to help you with your finances. She’s made it fun to track and spend money by developing a series of steps to take and points you can earn to help you achieve financial success.

We’ll partly follow along with her approach outlined in My Money, My Choices to assist us on our financial journey. This is a great place to start, especially if you’re not ready to hire a financial planner. (But when you are, you can contact me.)

To begin, we’ll track six months of spending. I know that sounds like a loooong time but stick with me.

By doing this, you’ll get a clear picture of where your money goes each and every month. If you don’t want to wait that long, it’s just as useful to review your past six month’s worth of banks statements.

By examining the past six months of statements, we’ll calculate what you spend, and you’ll have a better idea of where your money goes and how much you have left each and every month.

This is a major step in figuring out a budget. But we’re not going to use that word.

Don’t call it a budget

The word budget has a negative connotation, especially if you’re already worried about money and unsure of how to get yourself on the right track. So we’re going to banish it from our vocabulary.

In the next blog post, we’ll dive into how to track your money and how best to review it to make sense of where you can target and then trim.

Excited? Me too. We’ll have lots of advice and tools to use that will help you take control of your money.

So stay tuned next time and come ready with six months of your financial statements.

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