Money Musings 💭 Become your own CFO 👏
There are many similarities between our personal finances and the finances of running a business.
Important note: If you are a freelancer, have a side hustle, work in the gig-economy or make money via a hobby, you run a business.
Just like we want to be the CFO (Chief Financial Officer) of our personal finances, we want to do the same for our business.
I know, I know. It’s probably not the reason you started your business and it's also probably not even a job you want BUT typically before you can hire a CFO, you have to be one yourself.
HERE'S HOW:
Create a financial plan for your business (a lot like a happiness allocation). I have a template for you here!
Pay yourself (sooner than you think). It's okay to start small. You can work your way up from there
Build a business rainy-day fund
Understand how business taxes work (and set money aside year-round)
Have money parties for your business to check in on your financial plan. Update your “actuals” (what actually happened) and “projections” (what you expect to happen going forward)
Continue to put money aside for retirement if you can. There are some special options available to entrepreneurs
When I initially wrote Financial Adulting there was an entire chapter on “Becoming Your Own CFO” where I cover the above points in detail. There are also action items, charts and exercises for you to go through step by step.
You may remember, my initial manuscript was (way) too long (oops!) so I had to remove this chapter from the final. BUT if you’d like to read it, I’m very excited to share the bonus chapter with you here.
MONEY MOVE OF THE WEEK
MAKE A TRAVEL BUDGET - PART #3 - WORK BACKWARDS.
ICYMI - here are steps #1 and #2. Now it’s time to start saving!
I use a separate online savings account to set aside money for travel. If you want some extra motivation and excitement, nickname the account with the name of the trip you are most excited about.
Then, work backwards. I start with the total. If I want to have $5,000 saved for travel in the next 12 months, I want to set aside $192 per paycheck (if I’m paid every 2 weeks). You can do this weekly or monthly as well!
Double check the numbers work out. Because the timing of travel can vary, I like to check that I’d have enough for the first trip (and each remaining trip) if I stuck with the above savings schedule. Sometimes, we’ll have to front load some of our savings (i.e. save more in the beginning) depending on when we need the funds.
Make the transfer automatic. Believe me (I know from experience), it’s easy to forget to make the transfers to your travel fund. Or by the time you do, there’s not enough money left to transfer over. Setting up a transfer to your travel fund that’s automatic ensures it’s going to happen. Plus, you’re paying yourself first!
Use the funds and check-in. When it’s time to book the flight or use the funds, you transfer the money over from your travel fund to your checking account. I also recommend revisiting your budget as you travel. Do you need to add more to your fund? Do you have extra left over? This is something you can adjust and update as the year goes on.
YOU GOTTA SEE THIS
OUR FAVORITE TRAVEL CREATORS.
With travel AND inflation on my mind and impacting my wallet, I turn to travel creators with a personal finance bend for inspiration.
These are the ones who are traveling, sharing their adventures, AND talking about the money side of things. Like how much their trips cost, tips for making it work and how it’s affecting their financial goals.
Here are some of the creators I turn to for inspo:
I’d love to hear who inspires you! Hit reply and let me know.