Are you feeling overwhelmed by your finances? Do you want to take control of your money but aren’t sure where to start? If so, you aren’t alone. Many people struggle to get their finances in order; in today’s blog, we will walk you through three steps to get your finances in order, whether for your personal use or your business. A few simple, practical steps can help you feel more secure and confident about your money.
Step 1: Create a Budget
The first step to getting your finances in order is to create a budget. A budget is just a plan for how you’ll spend and save your money. A road map for where your money should go will help you stay on track with your financial goals and keep you from overspending.
To get started, make a list of your income and your expenses. Then decide how much money you want to save each month and how much you can afford to spend on entertainment, shopping, and dining out. Once you’ve created a budget, stick to it and review it regularly to make sure you’re staying on track.
These principles are important for business owners too. A fractional CFO might be a huge asset if you’re unfamiliar with budgeting for your business. Having someone on your team with the knowledge and know-how to manage your bookkeeping and finances can be a huge win.
Step 2: Track Your Spending
The second step to getting your finances in order is to track your spending. But this will help you stay on top of your budget and make sure you’re not overspending. There are a few different ways you can approach this, such as physically writing down all your purchases in a designated notebook or using a budgeting app. Once you have a record of where your money is going, you can identify areas where you can cut back and save money to make sure you’re staying within your budget.
If you’re curious about how to track spending across your business, you might benefit from an operational assessment. While an operational assessment tracks more than just spending, it can also help identify problem workers and possible financial risks and help you create strategic objectives. Having clear goals and strategic objectives across your entire business can help your employees work toward common goals as a team.
Step 3: Build an Emergency Fund
Building an emergency fund is key to getting your finances in order. Most people who are serious about getting their finances in order are successful with setting up a budget and tracking their spending. But many get intimidated by the idea of building savings. However, it doesn’t have to be a scary step. An emergency fund is a savings account you can use in an emergency, such as a job loss or injury. An emergency fund is essential so you’re not left scrambling if something unexpected happens.
Start by setting aside a small amount of money each month to build an emergency fund. Then increase the amount as you can until you’ve saved enough to cover at least three months of living expenses. Businesses also need emergency funds. Talk with one of our financial experts to find out how to best approach building up saving for your business.
Tips For Staying The Course
Now that you’ve taken some basic steps to get your finances in order, here are a few tips to help you stick to your budget. First, set realistic goals. Make sure your budget is realistic and achievable. If your goals are too ambitious, you might find yourself giving up before you’ve made real progress.
The next tip is to automate your savings. This helps in a couple of ways; the automation allows you to build savings consistently, then puts the money in a separate account, which can keep you from impulsively spending it.
Another tip that has helped many begin their path to financial freedom is to track their progress. Tracking your progress involves reviewing your budget regularly to ensure you’re staying on track. The best tip we can offer is to reward yourself. When you stick to your budget, treat yourself to small indulgences like a movie night or a new book.
Getting your finances in order can seem overwhelming, but it doesn’t have to be. Following these simple steps, you can take control of your money and feel more secure and confident. If you’re ready to get your business finances in order, Nexogy can help. We offer fractional CFO services to small businesses. Did you know that 99.9% of U.S. businesses are considered to be small businesses? We understand the challenges small businesses face financially. We believe having a strategy and helping implement it into your operations is the key to success. Contact us today if you’d like to learn more about how Nexagy can help you build your next strategy.