Madelin Woods – January 1, 2019
tldr; Track your expenses, set up some (realistic!) goals, feel confident that you can answer the questions you need to make big important life decisions, and live your best creative life.
I’ve been going through my personal & business finances this week (an actual joy that I indulge in every year— piles of spreadsheets! See my cool hat below.) and thinking about the goals our customers have set for themselves in 2019. I am not a certified financial planner, but I do have a trick or two up my sleeve. Finding a financial planner can be transformational, but remember: you are in control, and nobody will care about your finances as much as you do. Starting with these steps help you get started, so you can set your creative & business goals for 2019 with confidence.
ALL of your expenses. This is often the first thing a financial planner will do with you. It can take many hours, so it’s most cost-effective to do this on your own time. I don’t really like most online tools, and prefer the flexibility & control that spreadsheets give you. That said, downloading CSVs from your banks every year is painful (though I have been doing this manually for years).
This year, I started using Tiller, which automates the downloading CSV part. When you’re first starting out, you only get the last 3 months of bank data, so you will need to grab those CSVs one last time. But moving forward, Tiller will import your transactions automatically for you. I’ve also heard good things about YNAB. I personally feel more in control with basic spreadsheets. Whether you use Tiller or not, it’s essentially the same process:
Using the data you just so neatly categorized, you now have a complete snapshot of how you accurately spend your money. You can use this data to: build a realistic budget, define your 2019 goals (ie. spend less money on Uber, and more time on creative hobbies), look at your monthly P&Ls, summarize your tax deductions, start planning for next year based on your goals & spending.
There are a few spreadsheets you’ll want to have set up for every year (and in parentheses, which sheet to look at on Tiller):
If you’re running a business (freelance, ecommerce, Airbnb, etc), it’s a good idea to get a separate credit card and/or bank account. This will help you group your income & expenses and more easily separate your personal and business expenses for taxes & budgeting. You can set up additional P&L sheets for each of your businesses.
I look at my finance spreadsheets at least quarterly, if not monthly, throughout the year. This is helpful if you have freelance income and need to start paying quarterly taxes, if you’re making large financial decisions, or if you generally want more control over your spending. Either way, you’ll likely need to reference these sheets when doing your taxes.
Your accountant (or yourself) will need to know:
For example, last year I noticed I spent way too much eating out. I made myself a meal plan and started grocery shopping every week. This year, I’m happily surprised to find out I cut my eating out spending by 70%!
By setting up these simple budgets and financial processes, you’ll have more control over your time and money. Work with a project coach in 2019 to get organized & stay accountable to your creative goals. Visit hellowalden.com to get started.