I love coloring, anyone with me on that? It’s so relaxing to get my colored pencils or markers out and turn something boring into something beautiful.

I know people think looking at bank statements is a boring task, but I love turning them into something beautiful too. Not only is it equally as relaxing for me, it’s actually crazy eye-opening to my spending habits! Every time I do this, I manage to find those little leaks in my money and I stop spending on things that don’t get me where I’m trying to go.

At the end of the day, in both personal and business finances, if you want to grow your bottom line, you have to make sure that there aren’t leaks in the boat. No matter how much you make, if it’s being spent on dumb things that don’t add value to your business or your life then you’re not going to get where you want to be. All the money you spend should add some value – even if it’s just because it makes you and your employees happy, that’s still valuable. However, everyone has these little tiny expenses that you aren’t even sure why they’re being paid because nobody even uses them. So let’s talk about how to go through them at least once a quarter and how to make sure you’re getting the most value for your business.

So how do you do it?

1. Pull out your bank statements/books & records for the last 3 months and grab 3 different colors of highlighter

 

2. In color #1, highlight all those purchases in your statements that are not adding value. These are those things that you spend money on and you wonder “I’m paying HOW MUCH much for this? Why are we even paying for this at all?” A lot of times, these are subscription services that maybe seemed like a great idea at first but ended up being something you don’t use very often.

3. Trust your gut. If you immediately feel blah about a charge, but you have to have this service in your business, highlight it in color #2. These are the things that are necessary but only provide “meh” value for your business. For example, I had a client paying $120/month for Hootesuite when they had an employee posting on social media only once per week. That’s a huge amount to be paying for that service, but maybe having a scheduling service could allow that employee to add more value elsewhere. Good service, meh value.


4. In color #3, these are the things that add top value to your business. Maybe it’s payroll for your *ah-mazing* employees or maybe it’s the hosting for your gorgeous, high converting website. These items add value and are lovely to have and they make your business great.

5. Once your statements are all colorful, go back to color #1 items. Right now, figure out which items can be cut right away. Call those companies, pull your cards, dump those services.

Then I want you to write the monthly charges for each of those as soon as they’re cut. Please keep in mind this may seem like a hassle and something you’ll “do later”, but I’d be willing to bet the money you’re about to save that you’ve told yourself that sentence before. Don’t do it later, take the time and do it now. Then calculate the monthly savings and multiply it by 12. How much money have you added back to your business for this year?

6. Now it’s time for color #2 items. Go item by item and first, ask yourself honestly, can this be cut too? Do you really need this item? If it’s ready to be cut, repeat step #5.

If you’re keeping it, can you find an alternative? Is there a cheaper plan or a cheaper alternative you could be using to get the same result for what you actually need? Do some research to see if what you need is out there. It’s even better to pay more to get exactly what you need than it is to pay less for a meh-level product. Then, do it right now, cancel what you have and purchase the alternative. Write down the monthly savings (or extra expense) on your list, add it up and multiply it by 12.

7. Now switch it up. Do you have a list of goal items that would help you to grow your business? Do you want to hire a new person? Do you want to expand a product line? Do you want to redo your website? Do you want to start taking a salary? Look at the investments you’ve been wanting to make. Now look at the list of money you just saved. How can you best use this newfound money to knock some of those goal items off your list and continue to grow your business?

8. Rinse and repeat every 3-6 months to keep the momentum!

This same strategy can be applied to your personal dollars as well! It shouldn’t take you more than an hour for either one, but you’ll feel so relaxed and refreshed with this new money in your pocket.

So tell me, how much money were you able to re-invest into yourself after this exercise? What are you going to do with that new money so we can cheer you on?

Now go, be badass

Ary