The Foundation of Financial Growth
First off, if you’re not seeing the growth you want in your bank account, there’s a good chance you’re not paying enough attention to your finances. It’s a simple truth that “what gets measured gets managed.” Setting up systems and checks for your financial health can radically change how you manage your money and help you grow your bank account.
Strategy 1: Weekly Finance Meetings
One of the most impactful habits I developed is holding a weekly finance meeting. This routine, inspired by the principles from the book Profit First, has been crucial for keeping my finances in check. During these meetings, I:
- Pay off credit cards weekly to stay on top of expenses.
- Transfer funds to appropriate accounts for taxes, savings, and investments.
- Get a real-time pulse of my financial health, making adjustments as needed.
This frequent review helps me address issues promptly, ensuring small problems don’t turn into big ones.
Strategy 2: Tracking Your Net Worth
Many people focus on monthly budgets or cash flow but overlook their net worth. Your net worth — the total of your assets minus your liabilities — gives a more comprehensive view of your financial health. By making decisions based on how they will affect your net worth, you shift from short-term gain to long-term wealth building. For instance, refinancing a mortgage might save you monthly, but what does it do to your overall debt and assets?
Strategy 3: Monitoring Personal Profit from Your Business
As entrepreneurs, it’s vital to distinguish between business profitability and personal income. Tracking what you actually pay yourself versus what is reinvested into the business can illuminate whether your business is truly serving your personal financial goals. This perspective helps guide decisions on reinvestment and ensures that your business profits are indeed improving your personal financial situation.
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Time-Stamped Show Notes
- [00:00:30] Introduction to financial growth strategies.
- [00:01:30] Importance of paying attention to finances.
- [00:02:30] Benefits of a weekly finance meeting.
- [00:03:30] How tracking net worth can influence financial decisions.
- [00:04:30] The impact of monitoring personal profit from business activities.
- [00:05:30] Summary of key strategies to grow your bank account.