One Part of Small Business Financial Planning: Non-Monthly Expenses
- Melissa Mittelstaedt
- Apr 27, 2020
- 3 min read
Updated: Apr 25
Let’s play a little game of never have I ever. Have you played this game before? It’s a get-to-know-each other type of game. Player one starts with a statement.
Never have I ever... had an expense that I am used to seeing every year still come up and bite me in the ass when it came time to pay it.
If you have had this happen, raise your hand.
Me:
Everyone has a good chuckle, and now you know a little something about each other. Yay! Wasn’t that fun? At least that’s supposed to be the vibe of the game–fun.
But it wasn’t fun for me. It was my life story.
An example that happened to me annually for probably 10 years is the professional organization dues for my sign language interpreting certification. I am a proud member of both the Registry of Interpreters for the Deaf (RID, Inc.) and the Minnesota RID (MRID). I am still a certified sign language interpreter, and membership in these organizations is an important part of keeping my credentials. However, I used to want to yell profanities at them every June when they asked for my moolah.
“Now. You want to take my money now?! (I’d roll my eyes.) During this slow time of the year. The audacity!”
The reality is, I turned the finger I was waving around and pointed it at me. How did that happen? How did an expense I “knew about” come out of nowhere?
Here’s how: I was only focused on the expenses that had to be covered for the month – I wasn’t seeing the whole picture. It would be like trying to bake a cake but only having enough ingredients for one piece.
Once I could see that this was all a system failure, I could finally do something about it (other than be irritated with myself). And in my humble opinion, it’s one of the most underrated parts of small business financial planning. Time for the star of the show…
Create a list of expenses that you pay for annually, biannually, or quarterly. I call it my “Recurring Items”.
I do this for both business & personal, but here’s my business list to give you an idea:
January
(nothing)
February
Claude
Tax Appointment (yes, I do my taxes that early!)
March
(nothing)
April
Flodesk
May
Voxer
June
RID Dues
MRID Dues
AFCPE Dues
Domains
July
(nothing)
August
Zoom
September
Dropbox
Grammarly
Loom
SoS LLC Registration
October
Registered Agent Renewal
November
(nothing)
December
Canva
AFCPE Membership
Gmail Workspace
Having the list is step one, but the list alone won’t save you. However, my good buddy Excel just might!
I put all those items into a spreadsheet.
Cell A1 type Month
Cell B1 type Recurring Item
Cell C1 type Amount
At the bottom of Column C, I add all those up.
The cell below that I calculate the average.
Then each month, I have a line in my budget titled "Recurring Items". That amount is transferred to a savings account and can be utilized as needed.
Voilà! Now I know how much money I need to set aside each month to pay for those items that pop up. Even though I love surprises, these were surprises that needed to be squashed, and now they are! This process was a game-changer for me, and I hope it can be for you, too!
If seeing ‘Tax Appointment’ under February made you jump out of your seat and say, “I wanna be that on top of it,” allow me to introduce my three-month financial organization container. If your interest is piqued, I’d love to connect. Book a chemistry call and let’s see if it’s a fit.
Melissa Mittelstaedt
Financial Consultant | Accredited Financial Counselor®
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