Struggling with the financial whirlwind of family expenses, especially those never-ending sports activities for your kids?

Or maybe you’re an entrepreneur drowning in the complexities of business finances, wondering how to keep your head above water without relying on the deceptive ease of credit cards.

We’ve been there, and we’ve coached countless individuals through these very waters. Today, we’re excited to share four powerful lessons from our coaching sessions—real stories, real challenges, and real triumphs that you can apply to your life, today.

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Lesson 1: Mastering Youth Sports Budgeting

The Story: A family deeply passionate about their children’s involvement in travel sports found themselves grappling with the financial strain of keeping up. Wrestling meets, cheerleading camps, and the associated travel costs were quickly depleting their budget. Through our coaching, they learned the importance of a dedicated sports budget, meticulous tracking, and strategic saving, transforming their financial management and their ability to support their children’s passions without compromising their budget.

The Challenge:
You love that your kids are active and engaged in sports, but the expenses—from equipment to travel—can quickly spiral out of control, straining your family budget.

The Strategy:
Implement a dedicated sports savings bucket that encompasses all costs associated with your child’s sports activities. This approach involves meticulous tracking of every expense, from uniforms to tournament fees, and planning ahead to spread out costs over time.

Action Items:

1. Create a Dedicated Sports Savings Account: Open a savings account specifically for sports-related expenses. This fund will be your go-to for all sports costs, keeping them separate from your regular budget.
2. Track and Project Expenses: For one season, diligently record every penny spent on sports. Use this data to project future expenses for the year.
3. Monthly Contributions: Based on your projections, determine a monthly amount to set aside in the sports savings account. Treat this like a fixed expense in your budget.
4. Plan for Big Expenses: Identify the most significant costs (e.g., travel tournaments) and start saving for them well in advance.
5. Involve Your Kids: Use this as an educational opportunity to discuss budgeting and financial planning with your children.

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Lesson 2: Untangling Business and Personal Finances

The Story: An entrepreneur, running a bustling veterinary practice, was overwhelmed by her intertwined business and personal finances. Initially, her money was all in one pot, leading to confusion and a lack of clarity about her financial health. Our intervention helped her segregate her finances, automate her salary, and establish a system that not only provided clear visibility into her financial status but also bolstered her confidence in financial decision-making.

The Challenge:
As an entrepreneur, it’s easy to let business and personal finances mingle, leading to confusion and potential financial strain on both fronts.

The Strategy:
Clearly separate your business and personal finances. This involves setting up separate banking accounts for each and automating your salary to maintain a consistent income.

Action Items:

1. Separate Banking Accounts: If you haven’t already, open distinct checking and savings accounts for your business. Use these exclusively for business transactions. We advocate for Mike Michalowicz’s Profit First strategy and suggest having at least two checking accounts (Income and OPEX) and three savings accounts (Annual Bills, Taxes and Profit).
2. Automate Your Salary: Determine a reasonable salary for yourself and set up automatic transfers from your business account to your personal account. This regular income stream will help with personal budgeting.
3. Regular Financial Reviews: Schedule monthly reviews of both your business and personal finances to ensure expenses are in line and savings goals are being met.
4. Invest in Accounting Software: Utilize accounting software to streamline the tracking of business expenses and income.

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Lesson 3: Saying No to Business Credit Cards

The Story: Credit cards had become a crutch for a business owner, obscuring the true cost of business expenses and fostering a cycle of debt. By adopting a cash-based approach and implementing a rigorous cash flow plan, she gained control over her finances. The discipline of feeling the immediate impact of every transaction led to more mindful spending and a healthier business operation.

The Challenge:
Credit cards can mask the true cost of business expenses, leading to a cycle of debt and financial stress.

The Strategy:
Shift to a cash-based system for your business expenses to feel the impact of each transaction and avoid accruing debt. Let your business grow at the speed of cash. Don’t add expenses unless you add income.

Action Items:

1. Create a Cash Flow Plan: Outline your business’s monthly income and expenses to ensure you understand your cash flow.
2. Establish an Emergency Fund: Start building a business emergency fund to cover unexpected expenses without resorting to credit.
3. Use Debit Instead of Credit: For daily transactions, use a debit card linked to your business checking account to keep spending in check.
4. Review and Cut Unnecessary Expenses: Regularly audit your business expenses to identify areas where you can cut back.

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Lesson 4: Financial Planning for Your Kids

The Story: Unanticipated expenses for children can throw even the most carefully crafted family budget off balance. One family learned to mitigate this by establishing separate savings accounts for each child, covering everything from school supplies to sudden growth spurts requiring new shoes. This proactive approach not only streamlined their finances but also introduced their children to the principles of budgeting and financial responsibility.

The Challenge:
Unexpected expenses related to your children can disrupt even the best-planned budgets.

The Strategy:
Create specific savings accounts or “buckets” for each child or category of expenses, ensuring funds are allocated and available when needed.

Action Items:

1. Open Savings Accounts for Each Child: These accounts will cover their specific needs, from clothing to school activities.
2. Monthly Budget Contributions: Decide on a monthly contribution amount for each account, factoring it into your family budget.
3. Teach Your Kids About Budgeting: Involve them in financial discussions about their needs and wants, helping them understand the value of money.
4. Set Spending Limits: For older children, establish spending limits for certain categories (e.g., clothing) to encourage responsible decision-making.

Implementing these strategies and following through with the action items can transform your financial landscape, providing stability and peace of mind in both your family and business finances. Each step forward is a step towards mastery over your financial future.

Book Your Free Call Now!

We are excited to create the time & space to talk to you about your current money situation. This is a free, no-obligation call where we can answer questions you may have and maybe find some quick wins for your budget.

What do you have to lose?