How I Manage my Finances on a Monthly Basis (for anyone not just business owners!)

 
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Admittedly I used to not have any clue what my finances looked like. As long as I had money in the bank I wasn’t worried. When I went full time as an entrepreneur last year I quickly realized I need to have a much better picture on where I was spending my money especially come tax time.

However, I still don’t budget..persay. I haven’t quite gone as far as checking in with my finances bi-weekly so if I set a monthly budget I’m more or less hoping for the best and making educated guesses with my spending. But what I want to share with you is my system for reviewing my monthly spending but it can be used for anyone, not just a business owner! And I think reviewing where you spend your money can really help put things into perspective!

Here’s what my End of Month Finance Day looks like

1. Create invoices for clients

I use a program called QuickBooks which makes creating invoices super easy. If you didn’t know an Invoice is legally required to have specific information like the business name and address of the biller and payee, the date,9 and a number that will increase with each invoice you put out (0001, 0002 etc.).

QuickBooks prompts you for all that information so you don’t miss anything that they make adding services really easy too. Aside from the invoices, QuickBooks can track my milage through the iPhone app and their partner app Mint will track weekly spending and create reports. For $11 a month it’s totally worth it.

During this time I also add up the amount of GST I billed out (because I’ll have to pay it back to the government) and what the monthly revenue for my business is. Keep in mind revenue is the amount of money your business generated but once you minus expenses you are left with what’s called profit.

 
 

2. Print out my credit card statement & colour code purchases

Because the actual statement isn’t usually ready by the last day of the month I just print out all the transactions, it looks a little messy but for the purpose of this activity it doesn’t matter. I would also print out my debit statement if it made sense but I use my CC for everything so I normally don’t need to.

Once I have that printed out in front of my I use some pretty coloured triliner plus fine tip pens (I love the Earthy colours in the set), and assign each colour to a category.

purple = business expense
orange = food/coffee/alcohol out
blue = groceries
black = gas/car
pink = pleasure (travel/clothes/things like spotify/gifts etc.)
green = health (appointments/supplements)


Choose categories that make the most sense to you! One category at a time I scan through the printed sheets and circle anything that aligns with the corresponding colour.

 
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3. Create a summary document of the month

Once everything is categorized I open my google docs and make a copy of this sheet (yup you can have it! just don’t type in it, make sure you make a copy too).

In here I type out every transaction under its own category. So instead of the credit card print out which might go orange, purple, purple, blue, purple, pink, orange, blue I put all the purples together, all the blues together etc. One section would look like this:

Title: Groceries
Transactions:
Superstore $99.86
Superstore $104.52
etc.

In bigger categories like business I will create subcategories such as subscriptions for services I use like QuickBooks, Adobe, and Facebook Ads, and another category for people I pay such as my virtual assistant or my Facebook Ads manager.

Once these are all sorted out I add up the total spending amount in each category.

I have a general goal for what I want my personal expenses to look like, this would include the groceries, gas, pleasure, and the food/coffee/alcohol category. Other than that I basically just look at the numbers and write down some general thoughts "spending on food out was cut in half”, or “added expenses due to flight booking” for example. This is an area that I could definitely improve on. I have vague goals for how much I want to spend on each category but its mostly based on what I actually just do spend, not on me being mindful of it. But for the most part I am pretty comfortable and confident with how I spend my money.

However, that app Mint I was telling you about is actually a great option for staying on track throughout the month. You can set budgets for different categories within the app and when you make a purchase it will intuitively assign the purchase to a specific category! At the end of the week you’ll be emailed a super simple summary which acts as a good reminder to know where you’re at.

So if you feel like you need those extra check ins definitely check out Mint!

I hope this was helpful! I think it’s 100% worth 1-1.5 hours at the end of your month to review spending especially if you don’t have any budgeting habits yet this is a great starting point!

Chat soon,

xx.

Jo

PS.

This blog post is not sponsored by QuickBooks (I just love them!). However, I do have affiliate links incorporated into the blog which means that I may make a small commission at no cost to you :)

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