A lot of people are intimidated by the state of their finances. After all, we know we should watch what we’re spending, but knowing where to start can be overwhelming. That’s where Ashley Miller comes in. As an executive coach for MAPS with her own residential real estate team, she’s invested a lot of time into helping people to maximize their income. She’s highly knowledgeable about how to set up our businesses and personal worlds in order to maximize our bottom lines. When we spoke, she had some simple, yet highly effective advice for how to start taking better care of your financial health.

1. Take a look at your spending over the past 12 months
   If we want to make a difference in our spending behavior, the first step is to understand what our spending behavior actually looks like. That means getting real about our current relationships with money and spending. Ashley recommends getting started on this process by printing out the last twelve months of bank and credit card statements to see, in detail, what you’re saving and what you’re spending and when.
2. Categorize your spending
   Once you have printed proof of your spending in the form of your bank and credit card statements, categorize your spending into different buckets. Ashley suggests starting with determining what you spend on some of the larger and overarching categories. For instance, break down what you are spending on things like groceries, gas, and dining out. Once you tackle these categories, you can determine where your money is being spent over the course of the year and whether or not this spending is impacting your overall bottom line. When you have the facts laid out in front of you, you can use them to make positive changes in your budget.
3. Determine where to make cuts
   We often say your business is supposed to fund your lifestyle. However, if you find that your expenses are higher than you are comfortable with, changes are necessary. The last thing you want to do, especially in a shifted market, is to cut back on your business when you could be cutting back on your lifestyle. In fact, more often than not Ashley’s clients discover they are overspending in their personal lives rather than their businesses. Restaurants and groceries are two common areas for frivolous spending. If you look at your overall 12-month expenditures on eating out and cringe at the amount of money you’re digesting each month, it’s a budget you can very easily adjust.
   
   However, if your personal finances don’t seem to be out of whack, there are two business areas where overspending is common: cost-of-sale and lead generation. Cost-of-sale can be impacted by a variety of things, including how you compensate the people who work with you. When it comes to spending on lead generation, Ashley recommends taking a deep look. Contrary to what many may think, it’s not always the most expensive things that need to be cut first. Rather, small things can add up to big dollars and you may be inadvertently nickel and diming your budget into a deficit. No matter what you’re spending on lead generation, it’s important to ensure that it gets a favorable return on investment.
4. Put aside money for taxes
   Don’t wait until tax season to get ready to pay your taxes. Proactively plan for it. Work with your tax professional to prepare how much to put aside for taxes every time you make a deposit. Keep this money in a separate bank account so you won’t be tempted to use it for anything else over the course of the year.
5. Repeat
   Things happen. Lives change. New obligations occur. Our spending tends to creep up over time. Counter this occurrence by making a habit of revisiting these steps every year. When we take the time to proactively look at our expenses, we’re better able to make the right choices when it comes to our money.

Once you do the work and know your expense categories, you can start to tell your money what to do so that it works for you. Remember, small changes can add up to big savings over time when it comes to taking care of your finances. Start with fixing your personal spending before you cut your business spending. What are you doing to hold your expenses accountable in your life and business?