ANALYZE – BUDGET – GROW

Let’s talk about a very important subject: money.

Of course, money isn’t the most important thing in the world, but if you think about it the most important things in life take a lot of money. So if one can learn to be better with their money and let their money work for them, they can create more provision for whatever their vision is in life. Having a positive cash flow and learning how to be on a budget can bring much-needed security, peace of mind, and more choices in life. So why is it that month after month, many individuals look at their bank and credit card statements and are surprised to see that they spent more than they thought they did? Many times it’s not really a lack of money, but a lack of being on a budget.

We are excited to offer some simple proven strategies and helpful tips that can help anyone save money, manage money better, and increase cash flow. We have seen so many people over the years (including us) in tough financial situations follow these simple steps to get debt-free, increase their savings, and become financially free!

ANALYZE

Let’s start by doing a Cash Flow Analysis and see how you are using your money.

Doing a Cash Flow Analysis can be very eye-opening and give you the information you need to make changes and get on track. In order to invest in the growth of your life, you first need to take a close look at how you are spending and see if you can find any money wasters.

Follow the steps * below and be as honest and accurate as possible.

*Print bank and credit card statements for the most recent 2 or 3 full months.

*Use or create a cash flow analysis worksheet. 

*Write down your Net Income at the top and your spending in each category below.

  • Fixed Expenses = Bills you must pay on a monthly basis (Rent, Cell Phone, Internet, Insurance, Etc.)
  • Variable Expenses = Things you choose to buy or things that fluctuate monthly. (Going out to eat, groceries, fuel, entertainment, etc.)
  • Debt = Write down each of your debts. (Write the total and the monthly minimum payment for each)
  • Savings = Write down all of the savings that you have in savings, checking, 401K, or other accounts.

*Now do the math.

  • Start with your Net Monthly Income.
  • Subtract – Fixed Expenses.
  • Subtract – Variable Expenses.
  • Subtract – Monthly Debt Payments
  • = Total Monthly Positive or Negative Cash Flow.

*Ok, now it’s time to analyze and make some changes if needed. If you need to free up cash flow to get out of debt or invest in the growth of your business, think about where you can shop around for better deals on your fixed expenses and save some money. $5 here or $10 there can really add up to a lot of monthly savings. Also, ask yourself if all of your expenses are really necessary (like memberships you might choose to have). Next look to see if you are overspending in any of the variable expense categories (going out to eat, entertainment, etc.) and make the decision to get your spending under control. There can be a ton of Money Wasters hidden in your variable expenses.

*Get outside perspective. Remember you can’t solve your problems with the same thinking that created them, so getting perspective and advice from your mentor can be very helpful. If you have debt, make sure to work with your mentor on a clear strategy you can commit to in order to snowball your debt and get it paid off. Debt-free is the way to be and you can make it happen!

Most people have made mistakes when it comes to spending. If that happens to be you, it’s time to learn from your mistakes and make some necessary changes. Small steps like getting rid of unnecessary subscriptions and not eating out as much can lead to big change. Getting on a budget and sticking to it is the next step in accomplishing your financial goals.

BUDGET

WHAT IS A BUDGET? Being on a budget is simply telling your money where to go instead of wondering where it went. We have found that most people would like to be better with their money, but unfortunately, many people have never been taught how to. Many people allow their emotional spending to get in the way of their financial security. Impulse buys, bad spending habits, and/or an “I deserve it” mindset is very common and can also be very dangerous. In order to get in control of your budget, you need to get organized, be stronger than your feelings, and learn to let your money work for you.

There are many ways to create a budget and track your spending. The Cash Flow Analysis worksheet that you used to analyze your spending can also be used to create a budget. You can write down in each category the maximum you can spend. Then it will be up to you to stay disciplined and not overspend.  

Another way to stay on track with your spending is to write down every penny you spend in a budget notebook. Look at it daily to see if you are overspending and make changes as needed. If you need more ideas on how to keep your budget on track, check with your mentor.

GROW

If you want to increase your cash flow, you might need to change what you do to make money and/or change your mindset towards money. WHAT DOES THIS MEAN? Let’s take a look at 4 different ways of making money.

Employee, Self-employed, Big Business Owner, or Investor as referenced in the book Cashflow Quadrant.

The E and the S stand for Employee and traditionally Self-Employed small businesses. In these quadrants, people get stuck trading hours for dollars and can be very limited in what they can earn. Let’s be honest, most people’s wildest dreams aren’t coming true by working in the E and S quadrant. Jobs weren’t meant to get you way ahead, they were meant to get you by. Therefore, many people struggle in the E and S living paycheck to paycheck. It is almost impossible to become financially free in the E or S quadrant because you are constantly having to put in more time to make said paycheck.

B and I stand for Big Business Owner and Investor. B and I are a different way of creating income because it’s a different way of thinking. Let’s dive a little deeper into the B and I mindset.

B – Big Business Owner Mindset = If you own a business, you have to support what is going to support you. You have to treat your business like the multi-million dollar business that it’s going to be, even when it’s the multi-hundred dollar business it is now. You must also understand the power of duplication because no matter how good you are at what you do, there is only one of you and only 24 hours in a day. If you do not duplicate yourself in your business it will stay small and you will always be limited on what you can accomplish. But when you unlock the power of duplication, you unlock the potential of your business and can turn it from a small business into a BIG business much quicker than you may think!

I – Investor Mindset = Investors want to use their money in a way that will make them more money! Investing your money into your business instead of a competitor is a great start. When you choose your business instead of someone else’s you are choosing to let your money work for you. Ultimately, you are investing in the future growth of your life.

So put simply, if you want to GROW your income without limits, you need to be in the correct quadrants. Thankfully if you are reading this blog you have access to people that may be willing to help you make moves towards the results you want. Having a growth mindset combined with a B and I mindset can be a game-changer. Our encouragement is to seek coaching and mentorship from people that have the results you want and are willing to help you accomplish your goals. Building a successful life doesn’t happen by accident. You have to be intentional and you have to go for it. Your future is so bright!

ANALYZE – BUDGET – GROW

6 comments

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  • Barbie Miller - June 25, 2021 reply

    Absolutely incredible information for everyone to learn and use. It helped us to become debt free after some years of bucking the system before activating these great words of wisdom.
    Thank you for helping to us to overcome the debt issues and for providing these outstanding tools to move forward and help others as well!

  • Mike Condensa - June 25, 2021 reply

    David and Jamiee put an incredible lesson together for people to take hold of and truly live without the fear of lack of money. So many people suffer from money issues and these lessons teach you how to control that fear and take control back. Wow, amazing lesson! I am so glad I applied this for our family and now I don’t fear the “lack of” anymore!

  • Adrienne Stokley - June 28, 2021 reply

    Awesome blog. I just shared it with three people! Hitting that RESET button on our budget has to happen every once in a while, and this was a great reminder for today.

  • John & Polly Lingnofski - June 29, 2021 reply

    Great and timeless advice. We did this 25 years ago and it’s made all the difference in our lives.

  • Tony Driscoll - June 30, 2021 reply

    Thank you so much David and Jaimee for your focus on timeless principles that WORK, and your willingness to invest your time into helping us grow and improve our financial education! Living debt-free is just one step closer to living a life of complete freedom that you both model so well.

  • Team Action Jackson - July 22, 2021 reply

    Thank you for the reminder to stay on track and have a millionaire mindset!

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