How many of us like the word “audit”? I bet if we were all in the same room together right now, not a single hand would go up. Let me bring down the “yuck” factor out of the word “audit”, or in this case “Expense Audit”. Come to think of it, most people don’t like the word expense either. An expense audit is just a fancy way of saying, “check over your expenses”. Seriously, that’s it.
Expenses in our business can add up quickly. Sometimes in really sneaky ways. Only $9.00 per month here, another $3.95 per month there. Sometimes we take on these smaller monthly expenses because we think we need whatever they’re for and “It’s only a few dollars” right? Often these “few dollar” expenses are the ones that weigh us down the most because they add up so fast. It’s like when we go grocery shopping. As we’re putting items in the cart, the individual prices seem so reasonable. Then we get to the checkout, and suddenly, we’re trying to figure out how the bill got so high!
Here’s a step-by-step way of keeping an eye on YOUR money before it becomes $omeone else’s money!
What you’ll need:
- Three sheets of paper (or you can sign up for my newsletter below and get the workbook that goes with this blog post.)
- A pencil.
- Your calendar or reminder system of choice.
- Your bank statement(s) or expense reports from your bookkeeper. Do not go by memory! You need real documentation so expenses don’t get left out.
The Steps
$tep 1 – Don’t procrastinate, do this now!
$tep 2 – Take your 3 sheets of paper (or use the downloaded worksheet) and label each one at the top as follows: Title sheet 1 as “Calculate Your Expenses”. Title sheet 2 as “Calculate Your Savings”. Title sheet 3 as “My Money My Way”
Keep it or Dump it?
$tep 3 – Step 3 is the most important because this is where we justify expenses by deciding what we get out of them, or we see expenses we’ve outgrown, aren’t being used, or maybe even forgot about, but yet we’re still paying for!
On the “Calculate Your Expenses” page, put a check mark by expenses you’re keeping and an X by the expenses you’re dumping. While there will be monthly costs that you need to keep, mixed in with it all may be monthly fees and expenses you’re no longer benefiting from.
Calculating Your Savings Numbers
$tep 4 – Now that you’ve looked over all of your monthly expenses and noted which ones you’re ready to depart with, use the “Calculating Your Monthly Savings” number sheet to list and calculate your savings.
Write down each expense you’ve decided you no longer need. Beside each one, list what the monthly cost was. Then, add up all those monthly expenses into one total. Take that total, and times it by 12. That is the amount you are now saving every year! Cha-ching!
My Money My Way
$tep 5 – This is the fun part. You get to decide how you’re going to use the money you’re saving. Will it flow down into your paycheck for you, or will you reinvest it (or part of it) back into your business in a way that helps you move forward instead of it being the empty expense it was before? Use your “My Money Now” worksheet to brainstorm the different ways you could use this money. Here are a few ideas to get you started:
Take a course?
Is there a course you’ve been wanting to take that will help you with your business (landing clients, a new skill related to your industry, etc.)
Website tweak or make-over?
Does your website need a tweak or make-over? Hire someone to do that. First impressions make a big impact on potential clients. Your website may be their first impression of your professionalism.
Hire a Content Manager?
Okay, you know I had to throw this one in right? If you’ve reached the Boss Lady tipping point in your business, maybe it’s time for you to think about some strategic delegation to help maximize your content (and create more time in your day too.)
The Final and Most Important Step
$tep 6 – Now that you’ve reviewed your expenses and given a few the heave-ho, the best way to keep an eye on your money, before it becomes someone else’s money, is to set a recurring reminder on your calendar to review your expenses on a regular basis. This will make sure you have control, awareness, and the ability to leverage your Boss Lady numbers the way you want to.
You can schedule the expense review monthly or maybe quarterly, whatever works best for you. Remember, It’s your money. You’re in charge of it, don’t be afraid of it. You can use your extra money to cut yourself a bigger paycheck or leverage part of that money to move you forward in the business you’ve been working so hard on.
Have a great day,
Stephanie