Tax season is upon us! For some, that statement brings total anxiety and for others it is just another date on the calendar. April 15th happens every year, yet it always seems to sneak up on us!! However, because of some practices that Katelyn and I put into place, April 15th isn’t a stressful deadline for us. Today I want to share 3 ways that Katelyn and I have helped stabilize our overall financial situation! I am going to be sharing some resources that we use and if you have any other helpful ideas please feel free to share in the comments:
1. TRACK EVERYTHING!
This one is super hard for Creatives. Who wants to sit down and keep track of Mileage, or balance a check book, or sort through receipts? It is more fun to be doing things that grow our business, but if we let these things slip it could mean a huge cost to your business in the end! We love using MINT.COM to keep track of our expenses. We link it with our business checking account and tag each expense with a different category. At the end of the year I print off each category to see how much we spent on “Albums” or “Travel Expenses” etc. This system works really well and our CPA always compliments our record keeping skills! Little does she know that it’s all automated and we hardly do anything at all!
This one is tough because it is hard to spend money on things you feel you can do yourself. I was a history major, not a math major. I literally only took the one math class in college and I only took it because it as required. It is easy for me to hand over payroll or book keeping. One of the best resources you have for this is your local Tuesday Together groups. Ask people in the group who they use for taxes, or book keeping, etc. Because we’re not professional CPA’s, this part of our business would end up stealing hours and hours of our time. We were actually losing more money by NOT hiring a CPA.
As I get older (Guys I’m going to be 30 in 3 months!) I think more and more about retirement. When Katelyn started the business 8 years ago, retirement was the last thing on our mind. Being self employed can make it difficult because you do not work for a company that automatically drafts money to put into retirement. I talk with our friends who work for big corporations who have programs that will match how much they put into retirement and I think about how nice that must be. Setting money aside for retirement has to be a decision that you make each year. About three years ago we met with a financial advisor who sat down and talked with us about SEP Funds (Self Employed Pension Funds). Now I am not a financial planner, so I’m not going to try explaining all of the tax benefits of this account in detail. However, the basic benefits of this account are that it allows our money to grow tax free until we reach retirement age and it reduces the amount of income tax that we owe each year.
It took us a while to feel like our finances were organized and that we were being proactive with our retirement plans. This is definitely a process and so you want to make sure that you take it one step at a time. I hope this was helpful, encouraging and motivates you to go out and tackle some of the areas of your business that may be a struggle. Lets make 2016 the year that April 15th doesn’t scare us! If you have other ideas or advice about some financial decisions that have worked well for you, be sure to leave them in the comments!