Welcome to Day 28 of 30 Days To Your Financial Freedom Challenge!
The only real way to weather any financial crisis is to be 100 percent honest, and the only way to do that is to know exactly what is happening. You need to be aware of all your numbers in business and at home if you truly want to be successful in the good times and also weather the bad.
When it comes to financial hardships, it’s important to know where you stand at any given moment. The truth is, if I asked you right now what the balance is in your checking account, either business or personal, you should know pretty close to the exact number what it is. If you don’t know, you may not be paying close enough attention, which can lead to losses.
There are different break-even numbers you need to know to weather a financial crunch: The amount you need to keep your household running and the amount you need to keep your business running.
Your Home Life Break Even Number
As a business owner, sometimes it’s hard to remember that you need to think about your expenses at home too. The main reason is that if you’re experiencing a shortfall at work, it’s eventually going to rub off to your home life. Plus, if you’re paying attention, you can avoid a worse situation taking hold if you know when and how to cut back fast.
You’ll really need to create two different budgets and break-even numbers for your home life.
One is the budget you have when everything is going well and successful, and one is the budget you need when things aren’t going well, and you need to take it down to the bare bones survival budget.
The general idea is you don’t want to spend more than is coming in. How much do you need to come in to keep things the way they are, and then how much do you need to keep bringing in when you go to the bare-bones budget? This is your break-even point for your home life.
Personally I found it very helpful to make the distinction of what I wanted and what I truly needed. Then I created a doable financial plan. Finally, I gained some wisdom by not being so stuck in being so obsessed with money. Sounds silly but there is freedom in know that you can have anything you desire if you simply plan for it. Check out the workbook here.
Your Business Life Break Even Number
For your business, the breakeven point is similar in that you need to know what it cost you to run your business and how much you need to generate to stay in business. Since you’re a small business owner who is self-supporting, you need two numbers from this too.
You need to know how much you need to earn to keep the business going without paying yourself and how much you need to generate to pay yourself based on the figures you created above. Knowing the smallest amount of income that you need to simply maintain is an important figure to know because it’ll inform where to add and where to cut back.
Depending on where you are at in business choose one of the following:
If you have not yet launched your side hustle then you are going to want to check out this workbook. If you want your business to be successful with just minimal planning you could earn way more with your side hustle than you initially planned. Check it out here.
If you have already launched a business then you know that it can easily become a money pit. You are constantly being sold to whether its expensive courses or unnecessary software that is hard to use, Get your business finances right with proper expense tracking, sensible business growth goals, and creating your own decision make system so you don’t waste money with unnecessary purchases anymore! Check it out here.
Experienced entrepreneurs know that keep track of your finances throughout the year gets chaotic fast! What you need effective method to track your business finances so that it basically works on its own. Simply fill-in-the-blank and done. Set your budget, track your sales, affiliate marketing, customer tracking, ads revenue, and MORE! This is a must have for every business toolkit. Check it out here.
Have you crunched your numbers? Don’t fall into a trap of insufficient planning because you never know when a personal financial crisis may occur.
Please leave any comments or questions below.
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