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A Look in My Tool Box at the Tool I Use to Save Money

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Having the Right Tool and Knowing How to Use It Can Make Life Much Better

Over the last couple of weeks, we have discussed why it’s critical to save money for those big irregular expenses and unexpected emergencies. Next, we began the process needed to start building a “Rainy Day” fund by determining how much and for what. The Savings Transfer Sheet is like any other tool, it doesn’t do you any good if you don’t use it.

As is the case with everything that’s worth doing, starting is the hard part. Saving money is no different. It’s like digging a hole.

What if there’s an underground water line leaking in your back yard. You can see that spot where the grass is green in an otherwise brown lawn. The water bill is more than ever before and getting bigger each month. That doesn’t matter, the prospect of getting your shovel out of the tool shed and digging is more than you can bear to think about. So, you put it off and pretend that it’s not a problem.

The green spot in the yard keeps getting bigger and greener. The water bill keeps getting bigger too. You decide to cover the spot in the back yard with an above ground swimming pool. That took care of it…no more green spot. You know what they say. Out of sight out of mind.

Then one day you get a water bill that is so big you decide that you’ve got to do something. So, you drain the pool, get a shovel and start digging. Then before you know it, you’ve uncovered the pipe, found the leak, made the repair and filled the hole.

That wasn’t near as bad as you thought it was going to be. Once again you are aware that this is one of those times when the overwhelming dread was way worse than the actual process. The next water bill is back where it used to be, and you wonder why you weren’t more proactive.

A shovel is a simple tool that’s easy to use. It can fix a problem before it gets too big, but only if you use it. If you don’t the outcome can be devastating.

The same thing is true about the Savings Transfer Sheet. If you will take the time to get it out of the tool box, spend some time learning how to use it and use it regularly, it will make a significant difference in stopping your financial leaks.

Wouldn’t you like to have your money filling up the pool rather than leak under it.

 

Here are links to the Savings Transfer Sheet template and the Savings Transfer Procedure, free for your use. (expected to be active week of 5/21/18)

Why It’s Critical to Save Money in Business and How to Do It

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Setting Up a “Rainy Day Fund” for Your Business

 

Currently it is common for people to spend everything they earn and not save anything for future investments or emergencies. For the most part, as a society here in America we have become comfortable. We have forgotten how important it is to save money.

There have been times through out history when things weren’t good financially, i.e. the Great Depression of the 1930’s. Enough time has passed since then, that for most people it’s become a distant memory. If you have ever talked with someone who went through the depression or a similar experience, saving money was more than something that needed to be done, it often was the difference between life and death.

As reported in a Market Watch post* from December 2015, approximately 62% of Americans personally have less than $1000 saved and 21% don’t have any savings. Businesses aren’t doing any better and it’s every bit as important. Part of a good business financial plan includes saving money for those irregular and unexpected expenses.

Just like in our personal lives, in business we get busy with the process of daily living. We work hard at the normal operation of the business and we neglect to intentionally plan for those “rainy days”. Things like; equipment maintenance and repairs, building maintenance and repairs, quarterly and annual taxes, irregular payments, etc.

When I started doing construction work I learned the skill of building from some of the best craftsmen. When later I went into business for myself I thought I knew everything that I needed to be successful. The problem is that while they taught me how to build a solid, well built structure, they neglected to teach me how to build a business that way.

Early on in my business career one of those business building lessons learned the hard way, was the importance of saving money.

I was working hard to keep construction moving forward. The material figured, ordered, and suppliers paid. The subcontractors and employees organized, having what they needed and paid. Things were going well and there was even some money left over. So, naturally I spent it. Then it happened…the accountant showed me how good my year was by telling me how much I owed in taxes. How was I going to pay them? I didn’t have that kind of money. What was I going to do? I was going to have to make payments. Just so you know, tuition to Hard Knocks University is high.

That’s why over the last 35 years of learning lessons the hard way I designed and developed a system to help me avoid pitfalls. I needed to find a way to separate money that would be needed later. How was I going to do it? Several years ago, my wife and I found out about Dave Ramsey and his Financial Peace Program**. It is a program that teaches you to, “Live like no one else, so that later you can live like no one else.” The very first lesson he teaches is “Super Saving”. It is a common-sense approach to saving money and the reasons it is important to do so. This was great for my personal finances but wasn’t an exact fit for my business.

So, using the basic principles of Dave’s plan for personal savings I began working on a way to do the same thing in my business. The “Savings Transfer Sheet” is the result and a small piece of the bigger Business Blueprint puzzle. The “Savings Transfer Sheet” is a simple spreadsheet that with a few basic entries will give you the dollar amount that needs to be separated from any received gross dollar amount. That separated money can then be put into a different account or turned into cash and put in a safe. This way that saved money won’t accidentally be spent on the wrong thing.

After talking with a lot of different business owners I realized that every business could use a solution like this. That’s why in the next few weeks we will be making available a free downloadable “Savings Transfer Sheet” including instructions.

 

Next week I will go into more detail about the “Savings Transfer Sheet” and how it can help you solve your business money problems.

 

*https://www.marketwatch.com/story/most-americans-have-less-than-1000-in-savings-2015-10-06

**https://www.daveramsey.com/