In the hustle and bustle of everyday life, it is very easy to let one day spill over into the next. It can be difficult keeping everything on track when you are trying to juggle multiple deals, family and anything that resembles a social life. Every now and then, you need to take a step back and gauge where you are in every phase of your finances. Review your budgets, interest rates, cash on hand, cash flow and more to see where you can improve and where your money is really being spent. If you don’t do this, you can be wasting or spending money foolishly for years without doing anything about it. Ultimately, getting your finances in order is a priority.
Take one day every quarter of the year to see where you stand on your finances. It is important to note that this will require self motivation. You should never co-mingle your personal and business accounts, but take the time and review both. Break down every dollar that went in and out of your accounts over the last 90 days. Expenses ranging from marketing to rehab costs should be reviewed to see if there is a better way they can be carried out. Too often we get into habits of spending that will never change unless we make a commitment to change them. Even personal items such as coffee or eating out should be looked at and reviewed to see if there is a better alternative.
If you have used the same marketing company or same realtor, you may be using them simply because you don’t want to make a change. Change is never easy, especially if you have been spending the same way for years, but it is necessary in business. If you aren’t getting the production needed from your marketing, you need to take the time to research alternatives and pull the trigger if you find a better one. Yes, this will take some time and effort, but if you look at the big picture of your business it is very necessary.
In this exercise, break down everything about your expenses from interest rates and payment options. Transferring money from a high interest credit card to one with a zero percent interest rate even for the next 6 months can save you hundreds of dollars. The same can be said about any mortgages you may have. Things can change quite a bit over 90 days. A loan program that you may not have been eligible for last year may be a good fit for you now. If you don’t take the time to find out all of your options you may be missing out.
It is easy to get caught up in the way you have always paid for things or the way they have always been. This is why it is so important to take the time out of your busy schedule and make reviewing your finances every quarter a priority. Many investors often forget that they are actually running a business and that business relies on debits and credits and maximizing your capitol. If you are not sure of the best way to do this, call your accountant and they will give you tips throughout the year. The longer you let your finances go the harder it is to get them in order. Take the time and make the commitment to take your financial temperature every couple of months.