You know your business money management plan should include a retirement savings plan for your financial security. Here’s how to start one FAST!

The old saying, Pay Yourself First, is some of the best business money management advice you will ever get. If you don’t pay you into a retirement savings plan, who will? How do you do that? Here’s how.

Your Business Money Management Planning Should Include A Savings Plan

Out of every bit of income that comes in the door, immediately carve off 10% and put it in a savings account that you have designated for your long-term wealth building plan. I know that is a scary idea for a lot of business owners who have debt and past due bills to pay. My advice? JUST DO IT! As the weeks and months go by you’ll find you have adjusted to operating on 90% of your income.

The biggest benefit of this self imposed retirement savings plan is the financial security and peace of mind it gives you just knowing that cash is there. You will find that you actually stop worrying about money.

Think you cannot possibly put away the whole 10% to start with? Then take a look at your business money management plan from this point of view. Look at all of the suppliers you pay out of your income every month and get the idea that these suppliers are all on your personal payroll. Is there anyone you can fire and not really miss? Is there anyone you can cut back from full time to part time status? Just look at the bills that come in every month, or those checks, debits and automatic fees deducted from your accounts and you’ll see exactly who is on your “payroll”.

Here is an example. I was working with a business owner who was having a hard time cutting expenses 10% to put away in his retirement savings plan. We looked at every expense from the viewpoint that the supplier was on his business“ payroll”.

Playing The Business Money Management Wealth Building Game

Suddenly we were playing a game of shopping for alternative suppliers for things like telephone services, internet services, web hosting services, and credit card merchant services. We reduced the “pay” of some of the local service providers. We “fired” others and replaced them with less expensive, high quality services that didn’t hold him hostage with lengthy, punitive contracts. That saved a lot of money every month. He cut the phone company’s pay by getting rid of his dedicated fax line and got him a very low cost internet based fax service. We even fired his bank and got a new one with no monthly account charges and got the old bank off his payroll to the tune of $25 a month.

You can make this a fun wealth building game with your business cash flow and with your personal finances just by changing your viewpoint. Be the Donald Trump of your own organization. Take a hard look at who you are paying out of your hard earned income. Don’t be afraid to say “You’re Fired!” and change your business money management plan to pay yourself first by putting that money in your own retirement savings plan.

Leave a comment and tell us where you discovered you could save some money to put towards gaining your financial freedom.

P.S. Don’t forget to claim your FREE Formula To Increased Business Profits Report

In pursuing financial freedom, typically at least 10% of a person’s income is wasted on things that would never be missed if they were never purchased. The question then is, “How could that 10% best be redirected to help you gain your financial freedom”?

Gaining Financial Freedom – Step 1

The first step on the road out to financial freedom starts with discovering your true purpose; finding the thing you would be glad to hop out of bed in the morning to get working on, or to stay up late for to get one more thing done.

Gaining Financial Freedom – Step 2

The next step is finding out exactly how much income you need to meet your Income Planning Target on a weekly basis. That’s the missing ingredient: How much did you spend, exactly, on each type of expense over the past year? Include the expenditures you put on credit cards by expense type. Add in what you need to handle emergencies, expand your business and the cash set asides for long-term wealth building. Divide that by 52 weeks and you have the weekly Income Planning Target.

Gaining Financial Freedom – Step 3

The third step is looking through those expenditures and carving out the waste: that 10% – 20% that you’d never miss if you didn’t buy those items. It can be one type of expense (ex: meals & entertainment), or a combination of expenses. Work it out so you have that 10% – 20% separated out.
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Your resources to fund your financial freedom are disappearing minute by minute. FACT: You spend a portion of our income every minute of every day. Even when you are at home sleeping, you are spending on the office  and the utilities to make that office comfortable. If we have debt, then we are spending on one more minute of interest to carry that debt. The question then becomes “How much income do you REALLY need”?

Finding the EXACT answer to that question is the missing ingredient to achieving your financial freedom. UNDER-estimating the amount of cash flow you need can be fatal to achieving your financial freedom goals. It’s easy to forget the small bits of money that constantly leave your hands and is never added up. A mis-estimation of how much you need to make is the amount that usually ends up on credit cards or lines of credit as debt.

The way to discover the exact level of income you need is best done by figuring out what you are actually spending on a weekly basis, and exactly where that money is going. Take out your Profit & Loss and credit card statements and start reviewing the list, by type of expense, how you spent each dollar during the past 12 months. The more detailed the information, the better. I’ll talk about why in part 3 of this series. (more…)

We spend a huge percentage of our lives working and earning income – all in pursuit of financial freedom. The question that begs to be asked is “What are you financing with that income”?

A typical individual today works an average of 52 years during their lifetime to have the money to pay the bills each month and to accumulate enough for retirement so they can pay the bills until the end of their days. That is a form of slavery to the current, agreed upon economic system.

A person working just to pay the bills is, to a large degree, financing the purposes of others. Doesn’t it make sense, then, to figure out what YOUR real purpose is and finance that? If you had the financial freedom to do anything you wanted, what would you be doing? Figure that out, and you are right on top of your PURPOSE.

Be true to your own goals in pursuing financial freedom

In pursuing your financial freedom,

be true to your own goals…

not driven by someone else’s.

That’s the first step on the road to financial freedom — discovering your own true purpose. What could you be doing that would make you eager to jump out of bed in the morning, and be so excited that you could hardly go to sleep at night? What is it that you have always wanted to do with your life to make a difference? (You know you can make a difference, right?)

The bigger game is to break the chains of economic slavery, and accumulate the wealth to pursue YOUR true purpose. The most important rule of the game requires that income be substantial enough to set aside funds every week to finance YOUR freedom. (more…)