It’s almost that time again. The dreaded tax deadline is less than thirty days away.
With the April 15th tax deadline looming, money is on everyone’s mind. But for some people, money is stressful enough that every day feels like tax day.
The truth is, it doesn’t have to be that way. Managing money shouldn’t be a giant weight on your shoulders. By adopting a stronger and healthier outlook on money, we can avoid the struggle of money management.
There are three actions I suggest that everyone take to develop a new, positive outlook – while allowing you to take control of your money. If you consistently take these three actions, your anxiety around money will diminish.
Tax Action #1: Look at the “big picture”.
I’ve noticed that agents usually give too much focus to either:
a) income, or b) expenses.
By focusing too heavily on either of these, you end up shooting yourself in the foot. It is much better to keep your eye on the “big picture” when it comes to your money.
One of the key tasks I give to agents is to face the facts. Really get to know your numbers—ALL of your numbers, not just what you want to make.
I hear agents say all the time, “I want to make $100,000 a year.”
I reply by asking them, “Do you actually know what $100,000 really looks like at the end of the day in terms of what you can spend?” When they figure it out, the reality is a lot different than what they had originally expected.
What they really meant was, “I need a $100,000 to cover my bills.” If that’s really the case, then you need to earn a lot more than $100,000.
Sit down, take your time, and really get to know all of your numbers. Don’t hide from them. Don’t be scared of them. If you face them you will be fully prepared to deal with them at tax time.
Tax Action #2: Perform a net worth analysis each and every month.
If you are in debt and you are not performing a monthly net worth analysis, then all you’re ever going to see is a negative picture. It’s time that you begin to see the positive picture your money can paint.
Even if all you do is pay your existing bills, you will be rewarded at the end of every month when you see your net worth go up—even if it’s just a little bit. You need to see and experience that tiny jolt to your bank account to feel that you are making financial headway.
Tax Action #3: Get somebody to take a look at your expenses.
Ask somebody you admire – a mentor, a broker, or someone you know who is financially secure – to take a look at your expenses. You may be surprised at what they tell you.
Every time I have been asked by an agent to look at expenses, I have always been able to make some kind of a recommendation to help them improve their financial picture.
Maybe you’re spending too much on advertising. Yes, advertising is important and necessary. But if it’s not providing returns on your investment, then you need to step back and take a cold hard look at how you’re using it. Advertising should not be breaking your bank—it should be growing your bank.
The key to advertising—as in so many areas of being a successful real estate agent—is to be a contrarian. This means to do the opposite of what everybody else is doing. That’s how you’ll get your message noticed, and maximize the money you’re spending on advertising.
Too many times I’ve witnessed an agent spending tons of money on advertising—but for ads that look just like everyone else’s. This is a huge waste of money.
Maybe you’re spending too much on travel. How can this be? An agent needs travel expenses, right? Yes, but I know agents who have reduced their travel bill by almost 50%.
For example, how about previewing with another agent? You probably don’t need to be the solo agent in the car during tour time. Spread the expense of gas and the wear and tear on your vehicle with one, two, or three other agents – and you’ll all benefit!
Starting today, make a commitment to your money. Get to know it and to understand where it flows and where it’s getting bottled up. Once you’ve identified the problems, work on solutions!
Next, incorporate the monthly net worth analysis into your business. I think you’ll find it to be the single greatest inspirational tool for money management. You will LOVE to see that net worth number increase every month.
When you get to know your money, you will help it to grow—and tax day will be just another day.
By Denise Lones CSP, M.I.R.M., CDEI