Empowering You to Excel in Personal and Business Finances!

Know Your Numbers


One of the main reasons why businesses don’t make it, won’t grow, are stagnant and entrepreneurs fail at their endeavors, is a lack of knowledge of basic business finances. Just because you don’t have an accounting degree or finance degree is no excuse for failing at business! Anyone can be the CFO (Chief Financial Officer) of their business. In fact, entrepreneurs and business owners should be the CFO until they can afford to hire help. You’ll know the ins and outs of how your business’ finances work and be in a better position when time to turn that role over to someone else.

So here are what I believe to be six key financial concepts every entrepreneur and business owner should know:

1  Income

Business income is generated from the sale of products and services. It is the money received received in exchange for the product your business sells or the service provided. A critical point to note is that Income and Net Income (Profit) are two different things. Income is gross sales before any expenses are deducted. Net Income is the profit the business keeps after expenses and other costs to run the business are paid. Understanding the relationship between Income and Net Income is key in being able to keep a business up and running.

2  Expenses

Expenses are the costs to run a business. Every business will have them. The idea that you can effectively and efficiently operate a business without having to spend money is erroneous! A business has to spend money in order to make money. Examples of expenses include (but are not limited to) supplies, advertising, taxes, rent or lease, wages, etc. All these costs are subtracted from the income generated from sales of products and services, and what is left over is Net Income. The goal is to operate a successful business at the least cost possible.

3  Net Income

You want your bottom line to be in the black (positive), not red (negative)! Net Income – income minus expenses, is a representation of how the business performed during a specific period of time. Income, Expenses and Net Income make up one of the common financial statements for a business: Profit and Loss Statement.

4  Assets

Assets are everything a business owns. They are typically categorized as Current, Fixed and Other Current. Current Assets consist of cash and cash equivalents (assets that can be converted to cash fairly quickly). A couple examples are money in bank account and accounts receivable. Fixed Assets include property and equipment: buildings, land, furniture and fixtures, machinery and vehicles. Other Current Asset examples are prepaid expenses and inventory.

5  Liabilities

Liabilities are everything a business owes. Liabilities are categorized as Current, Other Current and Long Term. Current Liabilities are paid within one year. An example is accounts payable, amounts owed to vendors and suppliers. Other Current Liabilities are loans payable, sales tax payable and payroll taxes payable. Long Term liabilities would be amounts paid over a longer period of time, longer than one year.

6  Equity

Equity represents the value of a business. Don’t get Equity and Net Income confused though, they are not the same! Equity is the difference between the accumulation of assets and accumulation of liabilities since inception of the business. You may hear terms like Owners Equity and Retained Earnings to describe Equity. It doesn’t matter how much Net Income is generated during a particular period of time because if it’s not managed properly or invested back into the business effectively, it will have a negative impact on the value of the business. Assets, Liabilities and Equity make up another key financial statement: the Balance Sheet.

So there you have it…the key concepts entrepreneurs and business owners should know about business finances. Now, this was far from Accounting 101 class but you have a general idea of important financial data. Take this knowledge, expand on it and learn how you can boost your business’ profits and ultimately increase its’ value!


Count The Costs

I tell those in the market for purchasing a new car to count up all the costs PRIOR TO making a final decision, and definitely before setting foot into any dealership.  Why?  Knowing how much you’re willing to spend up front, and sticking to that amount, puts you in the drivers seat and in a position to make negotiations that are in your best interest.

The true monthly cost of a vehicle is not just the payment itself.  There are other anciliary costs that must be factored in to get the real picture.  For example, there’s an insurance premium which must be paid monthly, or every six months, etc.  Then you have gas, maintenance and registration fees.  All of these costs should be calculated on a monthly basis, and then added on to the monthly installment payment.  For some of these costs, and depending on what time of year it is, they can be pretty hefty.  The bottom line total would be an accurate monthly payment.

Keep in mind that salesmen are not interested in all the anciliary costs or other necessities or luxuries that you spend your money on (i.e. dining out, manicures/pedicures, salon, tuition, etc.) their primary concern is closing the deal, regardless of whether you have money left over at the end of the month or not.  Don’t let over-extending your budget put you in a position where you have to scale back on your lifestyle.  If they aren’t willing to accept your offer, move on to the next one.  I believe that when you prepare yourself financially, the right car for what you want to pay is out there for you too have.  It may not be at the first, or second place you go…but I believe it’s out there waiting for you.  Count the costs!

With the new year just around the corner, now is an excellent time to begin planning your financial strategy for 2015. The earlier you start planning the better, as time will slowly start to slip away as the busy Holiday season is fast approaching. Make next year your best year to effectively manage your finances. The following tips will help you to strategically put systems in place, causing your money-management skills to excel to the next level:

1. Organize your financial documents. Have you ever needed to refer back to a bill that you paid, but couldn’t find it? Or maybe you accidentally threw away a bank statement with the junk mail? Well developing an organized record-keeping system to maintain your financial documents will eliminate this problem all together. Records you’ll want to keep filed in a systematic manner include, but not limited to, utility and other household bills along with paid receipts, tax information, medical bills and bank statements, just to name a few. Be sure to include any other important documents that are financial in nature. There are different ways you can maintain your records: file folders, 3-ring binders, or expandable folders. File your documents as soon as you receive them and don’t let them pile up!

2. Set financial goals. You can achieve any financial goal you want to accomplish by setting goals that are SMART: Specific, Measurable, Attainable, Realistic, Time-Bound. ‘I want to save money this year’, unfortunately, is not a goal, this is merely just a wish. ‘I will save X amount of dollars each week for six months’ is a goal you’re more likely to achieve. This is just an illustration of a savings goal, but whatever your financial needs are remember the acronym SMART and start setting goals that will produce results.

3. Create a spending plan. A spending plan (also known as a budget) is simply a plan for how you will use your income. If you don’t plan how to spend your money, it will make its own plans! So to help you get started creating a plan that works specifically for you, follow these steps:
1) Develop a System – What I mean by system is a method you’ll use to track your income and expenses. This can be traditional pen and paper, spreadsheet, online tools, or if you have a smartphone, a budgeting App.
2) Don’t Restrict Yourself – Many people don’t like budgets because they’ve been stereotyped as restrictive. A spending plan should control your spending, not put restrictions on what you buy. If there are certain things that you like to do – go to the movies, dine out, get a manicure, etc., by all means put those items in your plan, as long as they’re a reasonable amount and still allow you to meet your financial goals.
3) Make Changes As Needed – If you carve your spending plan in stone you’re setting yourself up for failure. Expenses (and maybe income) will change from month to month, but hopefully not drastically. Knowing this, you should expect to make adjustments to your plan as needed.

4. Develop a routine saving schedule. The key to setting a routine saving schedule, and sticking to it, is to set a purpose for why you’re saving. Saving money just to be saving money is no fun. Is there a major purchase you’ve been wanting to make, a dream vacation you’ve only been dreaming about, or maybe you just want an emergency fund? If so, determine what that new purchase will cost, how much your dream vacation will be, or how much you’d like to stash away to build up your emergency fund. Determine a reasonable amount that you can set aside regularly, and start saving!

5. Make time for your finances. Just like anything else that you make time for that’s worthwhile to you, you must set aside time to manage your finances. I know you probably already feel as though time is limited and can’t possibly find any more time to squeeze in another task. If you diligently follow the steps above, managing your finances will be a piece of cake and time will no longer be an issue. Making an on-purpose effort to give attention to your finances is the difference between financial success and financial failure.

It’s never too early to plan. Get a head start on being your CFO and start creating the dream financial life you desire!

I could tell I had not opened a bank account in quite a while when I went into a Credit Union to open a new account and was told that credit checks were required in order to set up a new account. What? Credit Check? When did this come about? I had no idea this was the new norm! No way was I expecting this when I walked through those doors. Needless to say, it all worked out in the end. I was approved for the account, which meant my credit was in pretty good shape so I was happy about that. On top of that, the Credit Union was running a promotion giving new members $100 just for opening a new account. Now that made the switch even better!

I decided to part ways with my long-time Credit Union of 20 years, for a couple different reasons (which I won’t go into). Having been connected to one financial institution for that amount of time and making a choice to leave was not as easy as it had seemed.

It was time for a change, though, and eventually I came to grips with it. Change is not always comfortable, however, it’s not always a bad thing either. Sometimes we can get so comfortable and familiar with ways of doing things that because of our tunnel vision we miss divine opportunities that are available for us.

What change can you make to improve your financial well-being? Do something outside your comfort zone that will move you closer to achieving your Dream Financial Life!


Saving money can be a very rewarding experience if you have the right mind-set about it. I made up my mind a while ago that I would commit to saving money and reward myself for doing so. This is my second year following the 52-Week Money Challenge from January to December. I even started a Facebook group. If you’ve never heard about the challenge, how it works is for a year (52 weeks) you save a certain amount of money corresponding with each week of the plan. For example, the first week you save $1, the second $2, the last week $52. At the end of the year you will have saved $1,378! The beauty of this plan is that you start off saving very small amounts (less than $10 per week for the first couple months). While you’re stashing away these minimal amounts what this does for you is help develop a habit of saving. If you persevere long enough, when it’s time to put away $40/$50 a week it will be a piece of cake and finding the money should come natural. I recommend this savings plan for anyone who is not accustomed to saving money and wants to start a routine savings plan. But you can’t let the small amounts in the beginning be discouraging. The first couple months of saving less than $10 a week doesn’t add up very fast. But the key to this plan is persistence and patience. Saturday ended Week $39 and I have over $800 in the bank and I’m on track to complete the challenge, once again at the end of this year! The thing that has kept me on track is my commitment to making saving money a lifestyle, and I also set a purpose for my savings. At the beginning of the year I decided that I would save to purchase something I’ve been wanting for several years now. Knowing that when I’ve completed the challenge, I can go out and pay cash, without having to use current household resources or sacrificing patience and discipline for instant gratification. I love saving money!

Saving Made Simple!

Does saving money always seem to be a struggle? Is it easy to say you want to save but difficult to follow through? Do you feel you don’t make enough to save? Well you’re not alone, the answer to these questions are “yes” for many of us. It’s important though to develop a system for saving, and one that fits your individual financial needs. There’s no right or wrong amount of money to save, and it doesn’t matter how much you save. Saving a little over time will eventually add up to a lot! So if saving has been a challenge for you, the good news is that there are simple steps you can follow to get you on track to building a savings fund.

1. Decide To Save. The ability to save money begins with first making a decision to do so. It doesn’t just automatically happen.
2. Budget For It. If you don’t plan to save, it will never happen! Treat your savings like a bill, only you’re paying yourself. Give it the same level of importance as your cable bill, car payment, or any other bill you pay.
3. Have a Purpose. Whether you want to buy a new wardrobe, make a down payment on a car, purchase the latest and greatest technology gadget, or just have an emergency fund, set a purpose for your savings. Setting a goal to strive for will give you that boost of motivation to stay on track.
4. Set a Routine Saving Schedule. This can be weekly, bi-weekly, monthly, or whatever works for you. Following a consistent schedule will help you develop a habit of saving. For convenience, automating your savings via payroll deduction is another great way to routinely put away your cash.
5. Hands off! Resist the temptation to spend your savings by keeping a visual of what it is you’ve already purposed to save for.  This will keep you accountable. When the temptation comes to dip into your stash, you’ll be more prepared to resist that urge.

So follow these simple tips and soon you’ll be watching your savings grow!  Happy Saving!

Be Your CFO!

So what does the acronym CFO mean? Mainly used in the corporate world, it stands for Chief Financial Officer. The role of the individual who holds this title is responsible for managing the financial matters of a company or business. In a nutshell, this entails allocating revenues appropriately, minimizing expenses and utilizing resources effectively, amongst other tasks, with an ultimate goal of maximizing profits. Although the use of CFO has been limited to corporate America, it is a universal term that can be applied to personal money management as well. Your goal as manager of your finances is to have a positive cash flow at the end of the month, by managing your earnings wisely.

My passion for personal financial education coupled with almost 20 years working for state government inspired the name of my blog. Today I challenge you to take a new approach to your finances…Be Your CFO!