Am I Overthinking My Finances?
What is Overthinking Your Numbers Anyway?
What?? You might be wondering, if I’m bringing in money and covering my expenses, how is that over thinking them? I think it’s when you find yourself thinking about this or that business number a little too often. (At the expense of looking at your whole picture.)
It might be your monthly booked income goal or the number of new clients you got. Usually, it’s something that keeps surfacing in your mind but when you check yourself, you realize that you’re spending too much time on only a couple of metrics. Knowing your numbers is always my goal for you but obsessing over a few specific numbers can cause damage to your bank account.
When we focus too much only one or two numbers in our business, it can lead to underthinking our money management.
The clients I’ve worked with who’ve found themselves in this situation have actually been losing money. Let me say that again. Losing money because they were focused on the wrong part of their finances. They were surprised when they started to look at what things cost and how money enters their accounts on a regular basis (yep, the bookkeeping side).
Of course it’s good to know your numbers but if you’re not seeing what those numbers are *actually* doing in a spreadsheet or another accounting software you’re underthinking your accounting.
How Many Subscriptions Have You Signed Up For?
Things like your social media dashboard that’s going to save you a ton of posting time, that widget for your website that’s supposed to bring in a lot of leads (hey, you got it for an amazing price), or that monthly membership to an online business forum.
If, after using this kind of subscription (read recurring cost) for about three months, you realize that it wasn’t a good fit, then it’s time to unsubscribe and save your hard-earned money.
Go take a look at your monthly expenses right now and pick three things that should hit the chopping block. If you’re still on the fence about a new one you just tried out, add it to your calendar to re-evaluate it at the three month mark.
Review Your Income
If you’re not looking at exactly how much money is coming in, you can trick yourself into feeling like you have more money than you actually do.
For example, you booked four clients last month so you know you have $XYZ coming in, right? Look closer.
Did any of those clients receive a discounted rate for your services?
Did you remember to invoice them? Did they pay that invoice or are they running late?
Did any of them back out at the last minute?
These are easy things to not take into consideration when you’re looking at your numbers and have a significant impact on your bottom line. As we’ve discussed, the sooner you get paid, the sooner you can buy that new computer or pay off your credit card balance.
Thinking about your wins is great but you’ve got to also look at and track your actual results regularly to make sure you’re not leaving money on the table. And looking at little closer can help get your business really humming!
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