The Financial Toolkit
I want to talk tips to keep in your financial toolkit back packet!
These are the things that I (personally) want to have a beat on pretty easily in both the personal and business side of my life!
**Before we dive in further, here’s a little note: This post contains affiliate links. But I am hardheaded and only share about tools I use and love in my own business or with my clients!**
Alright - so let’s hit the important pieces I want to keep in my back pocket for easy access!
1. Financial Goals:
I’m a big proponent of setting financial goals. It's motivating to see your debt decreasing, saving for a down payment on a house, maximizing retirement accounts, and working towards the next steps in our financial freedom journey. Basically, I use these to think through anything my heart desires that has a pretty defined price point attached to it! These might even have annual commitments or end dates if you do nothing more than pay the minimum.
2. Life Goals:
Let’s be honest, life goals are way more fun. These can be big dreams or truly something small! These are going to range from person to person pretty significantly, but I like to think of them as our bucket list goodies! That might include travel, starting a business, giving back to your community, FIRE (financially independent, retired early) and so many other options -> they don’t even need to be financially tangible, but maybe there’s a financial component that needs to be considered.
Do you want to do mission work or volunteer for a year? Well, then you probably need to make sure your mortgage is covered, you can eat, and more! These can have a number attached, but might be a but more nebulous on an exact date and dollar amount to make it happen!
3. Budget System:
I love a solid budgeting system. It’s life giving in our household because it removes any blame around spending and empowers us to recognize there is no such thing as a perfect month (and there never will be). I won’t lie -> it took some time to find what worked (and didn’t work) for us and for both parties to get on board, but after using one system for many years, I promise we’ve found our flow about 3-4 months into using a system pretty regularly!
If you’re looking for a philosophy to along with your system then YNAB** and EveryDollar are two well-loved choices, but if you just need the facts then Mint or plain old Excel (with some pivot tables) can do the trick for you!
4. Income Sources:
If you use a budget system, then the income sources will show up for you on that platform, but overall the job or pension (if retired) and the income sources are just helpful to know! If you know what’s coming in overall, you can quickly anticipate and look ahead to the possibilities in your financial and life goals to make sure they’re mapping correctly (i.e. - are you going to meet that goal of paying for your vacation with ease or are you overshooting and overestimating how much $$ you can put away for your trip)!
5. Expense Averages:
Expense averages are so helpful in mapping out your needs, wants and wishes in your personal finances and business finances. Obviously, more income than expense is key to financial health, but the buckets needs to be filled in this order to keep our household and business lives running smoothly!
Anything else that lives in your business financial toolkit or personal financial toolkit that you can’t live without?
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