Monday, April 17, 2006

Manage your money

I'm posting this information two ways. This condensed post is for folks who trust my advice and/or already understand spreadsheets. For the folks who want to understand the minutia of this advice, please read the extended version of this post.

Balance your checking account. Create a new spreadsheet with the following column headers:   Date, Check number, Amount, Transaction, Balance, one titled "B," Cleared and Category. Use this formula in the Balance column:   =E1-C2. Fill Down the formula for two screens.

Create a template below this area (at the bottom of the spreadsheet) for fixed and variable expenses arranged by due date. Add all predictable income without dates (use negative numbers).

Copy and Paste three or more copies of the template into the active portion of the spreadsheet. Adjust entries by real dates. Insert other anticipated income and expenses by date. Use real numbers for expenses and bracket income behind Transactions until actually received.

Group expenses under each predictable income. Insert two rows between each grouping. This is your three month financial projection.

Add all real expenses and incomes (as received) along with supporting data. A copy of this information can be Saved As a new name for your annual tax preparation spreadsheet.

Look for the first negative number. Note the date and amount. This amount of money must be earned by the date notated. Otherwise, it's time to find a new biz.

Enough for now,


Unknown said...

Mark -

You've had some incredible posts on your blog lately. Truly real-world knowledge that you are passing along in a very generous manner. Thank you.

Especially your posts recently on the topic of money, finances, budgets, expenses, etc. They are priceless. These are topics that I am very familiar with coming from a career as a stock broker. I cannot agree with you more about tending to these matters. Typically, creative people do not and refuse to look at this side of the industry or their career.

I know of a freelance photgrapher right here in Fresno, CA who is a college graduate. Refuses to work for a newspaper as a staff photographer and insists on the freelance lifestyle. I see nothing wrong with that per se and I am not criticizing any freelancer.

However, in shunning the salary offered by a newspaper and opting for the freelance route, this gentleman has put more time and attnetion into equipment knowledge than R.O.I. (return on investment) knowledge. He made approximately $9,000 last year. Not $9,000 in profit above all expenses, but made $9,000 in revs. I contend that a staff photog position at a newspaper would have been much more profitable for him regardless of the salary the newspaper would've paid. Minimum wage at a fast food restaurant would've netted him more the $9,000 in income for the year.

My point is not to attack this individual. My point is: He refuses to look at himself as a business.

Is he a talented photog? Perhaps. Doesn't matter at all how talented he is if he isn't able to support himself financially and is forced to look for a new line of work.

I dealt with other people's money for nine years, for a living, and I've read your posts twice. If nothing else as a serious reminder.

I'd like to link to your posts on my blog to draw even more attention to them if I may. This is important stuff. You can't do what you love for a living (i.e. photog) if you aren't making a living at it.

Again, thank you for looking at the other side of the business/industry.

Mark M. Hancock said...


Thanks for the comment. I'm glad this information is useful. Links are always welcome. :-)