How Conducting A Financial Audit Saved Me Over $2,400 In Expenses
Between Netflix, music streaming services, tons of social media scheduling apps and other monthly recurring payments, it's easy to pile on the expenses in both your business and personal life. I get it, "shiny toy" syndrome is real and it is easy to want to opt-in to the new "thing" especially when everyone else around you is singing its praises. While those small payments and charges don't seem like much in the beginning, over the course of a year the price can really begin to add up. And if you're anything like me, you could be using that money for new services or resources that will help you to scale your business or make your life easier.
Last year I sat down to look at my finances and was completely shocked at how much I was spending every month. After an hour of going through my monthly statements, I found that a lot of my money was going to services that I felt were either expensive or not really worth what I was paying. I also found that i was paying for a few resources that I had completely forgotten I had signed up for.
So I took an entire weekend and did an audit on my finances. I dug into my numbers to see where I was spending, where I could cut back and even what areas I could potentially increase my income. The result, I saved myself over $200 per month in expenses alone (Over $2,400 over the course of a year.)
I'm all about building a scrappy business and only spending money on services or resources that will help me to grow my brand or make my life a little easier. The point of conducting an audit on your finances is to decide what you really need, what's worth keeping and what you can do without. These three questions that I asked myself during the audit can easily be used in both your business and personal life.
The point of conducting an audit on your finances is to decide what you really need, what's worth keeping and what you can do without.
WHERE ARE YOU OVER-SPENDING?
Take a look at your monthly checking and credit card statements. Where is the majority of your money going? If the majority of your money is going to things like new office supplies or fancy client dinners, it's time for you to cut back. Instead of over-spending each month, try giving yourself a budget for how much you'll spend on lunches, pretty new ink pens, etc. Remember to ask yourself if you REALLY need these things or if you're just doing it because the money is there.
WHAT SERVICES ARE YOU NOT USING OR DON'T FEEL YOU ARE GETTING ANYTHING OUT OF?
Remember that app you really wanted that was offering a free 30day trial? Well it's easy for those 30days to end and for you to quickly forget that you are now paying monthly for it. Are you still using that app and finding it useful or are you being charged without notice? Go through every monthly subscription you have signed up for and then take a look at each to see if you're actually utilizing their service. Also ask yourself if you are really getting anything out of the resources that you have signed up for. If a tool is not providing the return it promised or if it isn't a good fit for your life or business, CANCEL IT! The money you save will add up in the end!
If a tool is not providing the return it promised or if it isn't a good fit for your life or business, CANCEL IT! The money you save will add up in the end!
WHAT SERVICES OR RESOURCES CAN YOU SUBSTITUTE FOR A CHEAPER OPTION THAT IS JUST AS EFFECTIVE?
After getting rid of the services that I wasn't using or didn't find useful, I did some research on how I could lower the payments on the tools that I actually needed. There are a ton of different resources out on the internet that have very similar features, some that are also often half the price as its competitor. I switched from paying over $35 a month for my accounting software using Wave which offers a free plan. Instead of paying over $50 a month for a social media scheduler that I felt did EVERYTHING that I needed, I found a cheaper $19 option that offered the same features (SmarterQueue for those wondering). For my websites, I took a look to see if I was using all of the features on the plan I was on and downgraded to the plan below it if I wasn't. It took some time to get the newer options up and running but simply switching to a cheaper option didn't hurt my business one bit.
So ask yourself, is there anyway you can find cheaper alternatives to the tools that you use? Is there one app that can do the same tasks as three other apps you may be paying for? Do you really need Netflix, HBO Go, Hulu AND Amazon?
QUICK TIP: If there isn't a cheaper option for the tools you use, try signing up to be an affiliate for the company. Many companies offer discounts or free months in exchange for you getting your friends to sign up for their services!
New resources, streaming services and products pop up everyday but just because people rave over how awesome they are, doesn't mean you should jump in and make the investment. By keeping your expenses in your business low, you save room for tools that will really help you to scale your business or make your life easier and you have more to save for unexpected expenses or emergencies. Yes I 100% believe in investing in your business or life whenever necessary, but frivolous purchases can often be avoided.
If you're looking for a simple system to help you keep your expenses in check, check out The Keep Track System. It's a set of spreadsheets to help you track your income, expenses and growth goals!
written by alisha robertson
Alisha is an author, business coach and founder of Living Over Existing.