- Episode 27 -
So now that you have your files cleaned out and your database sorted, it’s time to tackle the elephant in the room – putting your finances in order for the new year.
Like most new agents, when I got my first few checks I was jumping around spending them like I was a Kardashian sister. A few months in, my savings dwindling and no money in the bank, I soon realized I had to actually take money out of each of those checks to pay for things like dues, educational seminars, broker fees, future marketing…and oh yes, taxes.
The first step I took to getting my financial house in order was to find a good accountant. While Uncle Bob knows the difference between income and expenses and could do your taxes when they were “simple”, he might not be able to secure you all the benefits that come with tracking all the money that is going out of your check and back in to your business each month. Finding someone who is reliable yet knows real estate is key – and setting it up so that you can pay those taxes quarterly is definitely better than waiting for that big invoice come April 15th.
While most accountants try to put you in some sort of order with keeping receipts and tracking mileage, it’s always best to keep yourself accountable as well throughout the year. I developed a spreadsheet for each month that outlines expense for business tools, fees and classes, as well as all my marketing, including taking clients to lunch or doing the famous pop by gifts. Know your limits for spending since each state is different and use those to your advantage to not only increase your deductions but also your visibility in front of your buyers and sellers throughout the months.
Another thing I was soon to realize was that shoe boxes are great for shoes but not the best for receipt keeping. While I admit I was guilty of a box or two of unorganized slips of papers, I was recently put in touch with an online tool that has changed my financial world for the better – Mint.com
They had me at “effortlessly manage your cash flow, budgets and bills all from one place”. This is a free tool (you can upgrade for a fee) that helps you connect your bank account information and credit cards to the application that categorizes all your purchases, sets up your billing dates so that you don’t miss any, and shows you weekly where you are spending the most. This way you can reel yourself in from that second cup of coffee and put that money towards another educational class. It gives you a clear view of your financial state at any given time through the web or directly to your phone.
Getting set up from the start helps when tax time rolls around – but more importantly, it shows you where you stand in the expense vs income game at a glance. This type of structure also helps show you what is working and what isn’t and it gives you the opportunity to make a change in order to reach those financial goals by year’s end.
Everyone always says you have to “spend money to make money” – that’s true, but it is also nice to know how those expenses played into those big commission checks.
Kay Conageski is a professional Realtor® with The Keyes Company based in Plantation, Florida. Check out her RESAAS profile ›