Personal Finance: How I Manage My Finances As A Money Expert

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As a money expert, I get asked a lot about how I manage my personal and business finances from budgeting to saving to investing to paying myself a salary and so I'll be sharing what I do in this blog post.

"I get asked a lot about how I manage my personal and business finances".

How I manage my personal finances

I know a lot of people use apps to budget, and while I have a couple great ones on my phone that I use (for instance, Mint), I also like to use a spreadsheet for the core of my budgeting. I like the balance of having the automation of my transactions via an app and being able to take a closer look at my expenses and spending in my spreadsheet.

- How I budget

I keep the receipts from my spending on the days I spend. At the end of each night, I input them into my budget spreadsheet to compare my planned spending against my actuals. It takes me less than 5 minutes to do.

At the most, I try not to keep the receipts more than a couple of days before I input them. This way it doesn't become a chore. This allows me to review my budget often throughout the month and it keeps me really engaged with my numbers.

I also make a lot of notes on my budget worksheet about my spending (what I spend on, why I spend it etc) and I add any dates I need to remember to my calendar with a reminder alert e.g. bill due dates, purchase dates etc, so I don't forget things I need to pay for.

- My decision to use cash only

Last year I made the decision to no longer use credit cards. I had previously used a charge card from American Express, which is a type of credit card where you pay your balance in full each month but I found that I wasn't as tight on my spending as I could have been when I used it so instead, I now operate on a 100% cash basis.

Using cash only keeps me more mindful of my spending and of my budget and I'm so glad I made the decision. Cash is queen ladies!

- Where I bank

Right now, I do my banking at Bank of America where I have a checking account strictly for bill payments, a joint account with my husband, a splurge account and an account for my immediate short-term goals i.e. goals I want to accomplish in less than a year.

I also have an online savings account, where I save for other short terms goals that are a little further out into the future i.e. goals I want to accomplish between 1 and 5 years from now. In addition, I also recently opened a Chime bank account and will be saving my "fun money" there.

I do a review on both of these accounts in this video on the Clever Girl Finance YouTube channel.

- Where I invest

I keep my investing portfolios split between Betterment and Fidelity, and for the most part, I'm investing in Index funds. I love Betterment's automatic portfolio rebalancing and tax harvesting approach (less manual work for me). I'm also a huge fan of how they invest in low-cost Vanguard ETFs and Index funds.

Fidelity also has similar low-cost funds and their customer service is amazing. I have my retirement savings accounts, my kids' college savings accounts and my other non-retirement investing with these two companies.

If you are looking for a place to roll over an old 401k or IRA or want to get serious with investing in a low-cost index and ETF funds (my favs) where your portfolio will be automatically rebalanced to keep you in alignment with your long-term financial goals then I'm a huge fan of Betterment. (If you have an existing 401k, then Blooom is a great tool that offers a free assessment - AKA a 401k checkup - on your existing account to help you ensure your 401k is aligned with your long-term goals).

I also just recently opened Stockpile accounts for my twins to start teaching them about investing in the stock market and buying fractional shares.

They are only 4 years old but they are starting to recognize brand names and so I thought it would be a great time to get them started. I've started showing them how to invest and track the brands they like for instance, Disney.

I opened up custodial accounts that I can hand off to them when they get older and have made $50 deposits in each account. Once the funds are available I'm excited to sit down with them to have our first investing conversation!

I'll also be building monthly deposits to these new accounts into my budget.

How I manage my business finances

I manage my business finances completely separate from my personal finances. To make dealing with the funds easier while growing my business. I have currently 5 different business accounts.

- My business accounts

I have a HOLD account which is where any money the business makes is paid. This money then gets funneled into these next 4 accounts:

  1. An OPEX account which is where the day to day business transactions happen.
  2. PROFITS account where I keep the profits the business is making. I use this money to invest in new projects or for quarterly bonuses.
  3. An account for TAXES where I save money for taxes to cover my quarterly tax obligation to Uncle Sam.
  4. And a PAYROLL account which I used to run payroll to pay myself, my employee and contractors.
    (For payroll I use a company called Gusto - Payroll can be a nightmare and they've made it sooooo easy - I love them!)

To set up these accounts above, I leveraged the approach from the Profit First book by Mike Michalowicz that I highly recommend. As my business continues to grow, I need a proper strategy to align the management of my business finances. While I'm not yet following the advanced profit first approach, I will be soon as I'm getting there.

From a business money management perspective, I use Quickbooks to sync the transactions in my accounts (and for my accountant) and to manage my business budget, I use my own worksheets, (Yup I love my excel).

So that's a high-level overview of some of the things I do to manage my finances - Hope it helps.

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