Do you absolutely hate budgets? There’s no reason to hate budgets and money! Haters gonna hate, but let’s shake it off! If you hate budgets, use income statements instead. It’s a game-changer.
This is part four of a 4-part financial education series going over the three financial statements. You can catch up here:
- 1: Why I Freakin’ Love Financial Statements
- 2: How to Fill in Your Personal Balance Sheet
- 3: WTF!? Where Did my Money Go? Find Out with Your Statement of Cash Flow
First, what exactly is a monthly income statement?
Your monthly income statement shows your income and expenses for the month. With businesses, this statement can also be referred to a P&L or Profit and Loss statement.
You’ll use your monthly income statement the most. We’re talking every. single. month.
As Chief Financial Officer, running the business of YOU, start having a monthly money meeting (like a boss!). Before you spend a dime project your income and expenses for the month. Then, at the end of the month you’ll enter your actual income and expenses.
The action of projecting income and expenses and then filling in actual expenses will help you be accountable to your financial goals like paying off debt, investing, saving for a home etc.
When you have a plan with money it just means you are in charge and you can do MORE! Instead of feeling restrained by a “budget,” start feeling empowered.
Think of your income statement as your executive life bucket list.
A little secret, managing money isn’t about managing money. It’s about managing your life. Manage your once in a lifetime trip to Asia or dream business on the side.
Most everything on your bucket list and to-do lists also cost money! Filling in your income statement in a nutshell puts a dollar sign to your to-do list for the month. Yes, this includes adulting line-items, like mapping out doctor visits or your plans for throwing an epic baby shower!
Money can be stressful, so go to your happy place, or somewhere you can concentrate.
Think: Adam Sandler on Happy Gilmore. Find a physical place you can go, whether it’s your patio with a killer view, or a coffee shop on the lake. Bring your laptop, listen to some positive jams, and get er’ done.
In the financial (day) planner I designed, I put together all the financial statements with twelve monthly income statements. They’re grouped together by quarters, three months at a time. Q1, Q2, Q3, Q4, fancy pants, right!? Sounds official and legit, doesn’t it!? You can make your own spreadsheet version, or we can work together with a money coaching session and you can use the exact financial (day) planner I use. Here’s the details on how to get money coaching with me.
Hate Budgets? Use income statements instead. Here’s what you’ll enter.
You’ll project your income and expenses. Money can seem completely out of control, but most everything is already known, literally fixed, and 100% in your control! Unless you are an entrepreneur your income is the same each month.
Your fixed expenses don’t change unless you’re hustlin’ to get rid of the cable or negotiate down your insurance. If you HATE budgeting, most of the budgeting decisions are already made. It isn’t rocket science projecting how much your rent, car payment, or insurance is. Those expenses are the same every month!
Here’s the cool part. On the spreadsheet I designed, once you complete your first income statement your income and fixed expenses will automatically be inserted into each month for the year.
You’ll only spend time projecting your flex expenses.
These are expenses that are one-offs and vary from month to month. Again, those are simply attached to what’s going on in your life like birthdays, trips, DIY projects, etc.
I don’t hate remodeling my RV, I freakin’ love it! When I sit down to do my income statement, that’s also the time I start dreaming and planning about my DIY projects. It’s fun! See, there’s no reason to hate doing budgets!
FYI, I now have a CLOSET that I designed in my RV. I’ve never been happier in my life to simply hang clothes than I am now. I converted bunk beds into a closet. The project isn’t done, but here are pics!
If you absolutely hate budgets, fill in your monthly income statement.
Think of it as your executive life bucket list. All the amaze-ball things you want to do are on your income statement with a dollar sign attached to it! You can make your dreams become a reality with your income statement!
That’s a wrap for the series on financial statements. If you freakin’ love financial statements now and want to have a plan with your money then let’s work together! Get the details on one-on-one 1-hour money coaching sessions here. There’s only one spot left for the month.