5 Simple Strategies To Manage Your Money Like A Millionaire
Updated: Oct 19, 2020
It doesn’t matter how much money you make; for some, it never feels like enough. You’re putting in the hours, you’re networking, you’re building up your clientele, you’re working harder than you ever have before and your revenue reflects that, it’s increasing! So why does it seem like it all goes right back out the door to cover taxes, employee expenses, and bills?
You should never feel alone when it comes to managing the financial side of your business. CPA, financial expert, and founder and CEO of About Profit, Wendy Barlin, has over 25 years of experience helping entrepreneurs grow their profits, reduce their taxes, and improve their lifestyles with easy to understand financial strategies. Wendy is also the author of recently released Never Budget Again, a guide on how to keep more and spend less all without budgeting.
If you have no idea where your money goes or why you feel scared, unsure, or frustrated with your finances, check out Wendy’s strategies for managing your money like a millionaire:
1. Create Destination Goals
“For some people, money is about having things. The more money you have, the fancier car you drive, the bigger house you can buy, the more expensive vacation you can take. For other people, money is a sense of security, a sense of having choices and being independent,” says Barlin. “Look in the mirror and decide what money means to you. It’s an extremely personal choice, but before you can go forward and create a system that will help you learn to manage your money and finally achieve your goals and dreams, you must know who you are and what you want money to do for you.”
Is money security? Is it fun? Is it stress? Is it peace? Decide what money means for you, and try to be specific.
2. Select a Money Day
“Pick a day of the week that you can commit to and make that your Money Day every single week. Touching your bills and paying your bills every single week allows you to get very clear on what you’re spending. Your first task on Money Day is opening your mail, and part of that is setting your bills aside so that you can see exactly what it is you have to pay and what categories you’re spending in: banking, credit card, investments, loans, insurance, taxes, etc.,” suggests Barlin. “Income and expense tracking software and apps are relatively inexpensive, and some are even free, so don’t let that stop you. Find a system that is easy to use so that you can make sure that it is one less barrier to actually making it work.”
3. Manage Your Money Correctly
“If I make more, I can spend more! Sound about right? For most of us, we earn money and it lands in a bank account. From that bank account, we spend. We pay our bills. We spend money on the fun stuff. It’s all lumped into this one checking account so when we look at our account, if we have a lot of money in there, we tend to spend more, if we have less, we tend to spend less. Instead, start to separate your money in a systemized way,” notes Barlin. “Set up different bank accounts and use each bank account for a separate purpose. Splitting the money becomes the ‘budget.’ Once the money is designated for certain expenses, then either you have the money, or you don’t.”
4. Get Control of Your Income Tax
“It’s no secret, nobody likes to pay income tax, but it’s so easy to lose control of it and end up in a bad situation. If you have a regular job with a W2, maybe you own your home, you have a spouse and two kids, then that is considered a relatively simple tax return, and you can use an online system. If you have anything a little more complicated, you have rental property, you have a side business, you have a business, you have an investment portfolio, that’s when you want to hire a tax preparer,” says Barlin. “This isn’t because a tax preparer is better than the computer, but they can offer you some strategies to save money and to create that tax return more effectively.”
Don’t work with someone because your neighbor says they’re the best, or you read online that they’re great. You need to like them. Discussing money can be intense. You are going to go deep into your life, how you spend your money, and you need to be completely comfortable having this conversation with the person you choose.
5. Build Your Personalized Success Team
“A successful team working for you has many advantages. Take your health, for example, you likely have a doctor, a dentist, an acupuncturist, even a psychotherapist. We have this huge team taking care of our bodies, but who’s taking care of our money? The bank? Don’t think so. You need to build a team for yourself to help you manage your money and the aspects of your money,” advises Barlin. “Your money team members should consist of a tax advisor, financial planner, banker, lawyer, and insurance agent. Share your path, your goals, and your intended destination with your team so that they can help you get where you want to go. Their role is to support this path that you have chosen to take.”
Manage your money, or it will manage you!
Written by: Stephanie Burns (Forbes Contributor)