Learn to do Paperwork or be Poor!
One of the most common questions I get from people is “How can I prepare for the ‘just in case’ things that are bound to happen in life?” and my answer is to Have Current Financial Reports. Get your numbers current, and keep them current, so you can plan proactively for those “just in case” scenarios that will happen. The thing is, we need to stop being surprised that “unexpected” things happen. We need to know that they will happen, and what we can do to prepare for them is to not be caught off guard. Granted, we may not know exactly what is going to happen, when it’s going to happen, or what the associated costs will be, but we can at least be making our decisions from fact, not emotions, when those things happen.
Often when people first come to work with us they are in what I call catch up mode. Typically they have all their receipts, because somewhere along the line they learned that was important, but balancing the check book was never a priority. When it comes to tax time they would create an elaborate spread sheet and total what they had the energy to work through for expenses. Income then was whatever was deposited in the bank. I will guarantee you that if this is your method of accounting you are paying way too much in tax and if you have an entity, your corporate liability veil will not stand up. As well, you may be leaking money in ways you are not aware of.
Money will not come into chaos.
Money is a relationship, just like everything else. In order to have a good relationship with it you must spend some time with it. If keeping track of this kind of information on a daily, weekly or monthly basis is not your strong point, then hire some help—it will be well worth your investment. What is important is that you have a current Profit and Loss statement and a current Balance Sheet to review on a monthly basis, whether you create them yourself or you have someone else do it. From these statements you will learn to read your numbers, to hear the story they are telling you. You will learn to make decisions from fact (your numbers) and in no time you will look forward to receiving them – it can even become fun!
When you learn to focus on the revenue, whether that be in business or in wealth building personally, you will create more of it. It’s not just about making money. It’s about keeping it and putting it to work for you over and over and over! Current financial reports are the vehicle through which you do this. Imagine what life could be like when your cashflow is flowing in the positive on a regular basis and your decisions become about growth and not sustainability because you know sustainability is covered!
Getting started is always the biggest step. Remove all the judgment and just begin. The good news is once your system is in place it is easy to keep in place. The rewards are worth the effort! If you would like to explore different systems so you can create one that works best for you or if you have one and want to freshen it up let us know, we are always here to help.