Here are a few often overlooked tips that can help you make 2022 one of your best years for financial growth. Accountants witness a lot of management styles in various businesses while servicing their clients. Because accountants are the financial note takers, accountants are in the best position to report on what is effective versus the habits and business models that create struggle and poor performance.
So here are four things that are simple but can really impact your financial growth this year:
- Take notes in your financial meetings
- Pay attention to where your files and copies of tax returns and important statements are saved
- Focus more on growing revenues than cutting expenses
- Keep a summary ledger of totals you make and spend every month
Take notes in your meetings
Whether you are meeting with your accountant or a financial advisor, these meetings will feature discussions around benchmarks or specific stats that measure your performance. Write down what those benchmarks are that your accountant or financial advisor uses to monitor your progress. Then write down how well you are doing and the suggestions that follow for the coming year. In one smooth session you have an outline of your plan for the year and a measurement of the prior year. And the best is yet to come. A year goes by, and you are in the same meeting next year; except, you pull out your notes from last year and you have a greater awareness of your progress and details of your plan. Another year of notes and the pace of your improvement becomes something that would make Tony Robbins blush. And it all started with a piece of paper and a pen.
Pay attention where you store things
We all get busy and set things aside in a special pile. This year take that one extra step and spend an afternoon making file folders for a few main files and getting the paperwork in the labeled folders organized now and forever. Everyone has their own preference of color and style of folders; electronic copies are probably the best. I offer a few suggestions for your filing experience. Keep it simple to a few folders: tax returns and supporting documents, year end investment account summaries, year end mortgage and loan summaries, major purchases. Bills and monthly type of expenditures can be tracked but over the years it isn’t necessary to keep it, so, focus on year end summaries of asset and loan accounts. Investment accounts can particularly assault you with a forest of statements and paperwork throughout the weeks and months of the year. The year end summary will catalog all of your accounts and investments and performance. Over time the monthly paperwork will just become noise. Be sure you save the year end summaries and put the rest in the compost pile.
Focus more on growing revenues than cutting expenses
This is for all those cash struggling business owners out there. Most small business owners are juggling cash flow in business operations and in their personal lives because the timing and payments of business and personal expenses are dependent upon business collections. Those struggling business owners are aware of all of their expenses because their focus is generally on cutting expenses to stretch the life of their collections longer. So this year turn it around and brain storm all the ways you can increase revenues in your business or perhaps, another business related to your core service. Spend the entire year embracing and analyzing new ways to increase the money flowing in. Try to filter down to the ideas that are already supported in your business and would take the least amount of effort to develop. Think about the power partners and relationships you have. What else could you sell? What else would people pay you to do? Hopefully many of these ideas for additional sources of revenue will also enhance your customer base, making the strategy of focusing on revenues and not expenses potentially a double win.
Keep a summary ledger of totals that you make and spend every month
Most people are not good at playing part time accountant. Keep it simple for yourself. Make a spread sheet with 5 simple columns: month, money in, money out, net, notes.
If you want to track your investments use 4 columns: month, beginning balance, ending balance, change. I believe this will help you move forward. Keeping a ledger of monthly summaries has 2 major selling points. One, it’s easy to do because you are only looking at statement totals (one or two numbers each month). And two, it helps you rise above the noise of daily stresses. Getting stuck looking at the overwhelming amount of bills you have and not noticing if are you getting better or worse over all is like focusing on what you eat in a diet but not tracking the overall calories. Pull the view back up to an overlook at your finances and start from there. Just remember to come back to that same overlook each month and you will find your focus by opening your eyes to the bigger picture routinely.
I hope 2022 is the year the country not only returns to normal, but that you find a way to a new normal that is an improved version of the old you. Good luck and please call me to talk over your strategies anytime.