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As a personal finance influencer and 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. So I'll be sharing what I do in this article.
How I manage my money as a personal finance influencer
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
Being a finance influencer means leading by example. One of the most important things I teach is how to budget your money. So, it's no surprise that I have my very own budgeting method to keep my finances on track. My method is simple but powerful for tracking my money.
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 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. This allows me to get rewards, but I make sure I also pay any balance I have in full each month. As a finance influencer, I teach from personal experience, and trust me; you need to pay off your card every month to prevent racking up expensive debt.
Now, my primary spending means is cash. Using primarily cash keeps me more mindful of my spending and 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 online savings accounts, 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.
Where I invest
One of the most important topics I teach as a finance influencer is how to grow your money by investing. For the most part, I'm investing in index funds. I have retirement savings accounts, my kids' college savings accounts, and other non-retirement investing accounts. If you are looking for a place to start investing, a low-cost index and ETF funds where your portfolio will be automatically rebalanced to keep you in alignment with your long-term financial goals is a great idea. Fidelity and Vanguard are my favs!
I also just recently opened custodial 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. So, I thought it would be a great time to get them started. I make deposits into their accounts each month. Then show them how to invest and track the brands they like, for instance, Disney. While they invest in several individual stocks, I also invest a portion of their money in a Vanguard index fund.
How I manage my business finances as an influencer
For the businesses I own, I manage my business finances completely separate from my personal finances. This makes dealing with money easier while growing my businesses including my business as a finance influencer. For this business, I currently have 5 different business accounts.
My business accounts
Here's how my business accounts are currently broken up!
This is where any money the business makes is paid. This money then gets funneled into these next 4 accounts:
OPEX (operating expenses) account
This is where the day-to-day business transactions happen.
I keep the profits the business is making in this account. I use this money to invest in new projects or to pay bonuses.
If there's one thing that's certain, it's taxes! I use this account to save money to cover my quarterly tax obligation to Uncle Sam.
I use this account o 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 so 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). I have a variety of account types, but they help keep me organized.
Being a personal finance influencer keeps me accountable
So that's a high-level overview of some of the things I do to manage my money as a finance influencer! I do my best to lead by example with my finances so I can motivate my students and my circle of influence to achieve financial success!
Remember, when it comes to managing your finances, it’s important that you set up your accounts and systems in a way that makes it easy for YOU to track. Choosing the right budgeting method and systems can help deter you from financial mistakes and ensure you stick with your plan. Learn more about ditching debt and saving money with our FREE financial courses and worksheets!