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.

How I manage my personal finances

I know a lot of people use apps to budget, and while I have a couple of 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.

- How I use credit cards

In the past, I've have used a charge card, which is a type of credit card where you pay your balance in full each month. I now also have a regular credit card that I use to book my frequent travel on. This allows me to get rewards but I make sure I also pay any balance I have in full each month.

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

- How I organize my bank accounts

I have a checking account strictly for bill payments, savings accounts for my emergency funds and sinking funds and a splurge (fun money) account.

I also have an online savings account, where I save for my mid-term 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.

- 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.

At age 4 they started recognizing brand names and so I thought it would be a great time to get them started. I make deposits into their accounts each month and then show them how to invest and track the brands they like for instance, Disney. While they invest in a number of individual stocks, I also invest a portion of their money in a Vanguard index fund.

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 employees 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).

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So that's a high-level overview of some of the things I do to manage my finances! I have a variety of account types, but they help keep me organized.

When it comes to how you manage your finances, it’s important that you set up your accounts and systems in a way that makes it easy for YOU to track. So what works for you? Leave a comment below!

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