That Girl On Fire
  • Instagram
  • Facebook
  • Pinterest
  • Linkedin
  • Mail
  • Home
  • About
  • Blog
  • Contact
  • Search
  • Menu

Posts

Minimalism

Managing Business Financials As A Minimalist

It’s so easy to get wrapped up in the fallacy that acclaim and success are direct outcomes of how much we earn, or how complicated our affairs are.

Accomplishment isn’t linked with complexity. We can merely “work to live” and still make major bank with the simplest of systems, workflows and personal productivity ethos. I do every month.

It’s almost comical how simply I manage my business financials as a minimalist. People often think I run an action-packed show, full to the brim of backend sorcery and financial formulas that keep the FIRE journey ablaze.

Does that mean I don’t work hard? No. Does it mean I’m not ambitious? No.

It simply means that my startup phase of working consecutive 80-hour weeks are behind me, because I know how very possible it is to achieve low-touch profits.

My four simple hacks for managing business financials as a minimalist, all yours.

Uncomplicated profit statements.

There’s nought more important in a small business than the ability to make money. And in the absence of a regular paycheck, this amount can fluctuate dramatically between seasons, recession periods, and even month-to-month.

So, keeping track of it all helps with forecasting – think basic budgeting, but also measuring periodical trends for dips in cash flow (so you can squirrel cash away for those times), and an idea of your tax liability so you can save (or invest more in the business) ahead of time.

Cue simplicity. I use a basic Excel formula that contains:

  • Who the client was;
  • The payment gateway used;
  • The full amount earned for that client in the calendar month;
  • Whether they’ve been invoiced;
  • Whether I’ve been paid;
  • How much I’ve sidled aside for tax, super, important insurances and HECS for the month.

I try and always send final invoices at least a week before the end of the month so that my payment terms (7-days) are honoured within the month, but if they go over, I move it into next.

I track my financials by when I get paid, not when the work was done. Why?

Because labour is fluid, but income is concrete.

Income from my shares doesn’t get logged here because we reinvest them (although tax needs to be paid on the dividends – I organise that with my accountant separately), however I do include side hustle income on this spreadsheet.

Tax time made easy-as-pie.

Very little strikes fear in the heart of the free agent as June 30.

Tax time, for many, is a frantic hurdle race to collate receipts, measure up profit vs loss, calculate GST and cry a lot over a mentally prepared potential tax bill.

But it can be a lot simpler than this.

Firstly, I know what’s tax-deductible and what isn’t, because I’ve asked a lot of questions. Thanks to my countless hours on the phone to the ATO, or running things past my accountant, I’ve kept a simple Google Doc dot-point run sheet* and refer back to it whenever I’m iffy on a business purchase.

I use that clarity to make decisions on what and how to spend on and in my business, and I track every expense as-I-go using an accounting software that has a screenshot uploading feature.

Digital receipts are perfectly legal, according to the ATO, and it means that I can recycle the paper version straightaway, instead of letting them clutter up (and fade anyway, as they always do).

I categorise expenses really specifically (payroll, marketing, administration, travel, rental overheads etc), which helps me gauge a monthly breakdown of where I invest most in the business, and at the end of the financial year, I pull a report and reconcile it against what I earned. It takes all of ten minutes.

*On the note of “tax hacks”, I also leave hints on things I’m likely to forget over the year, like how I treat international clients for tax purposes, how to easily report on my share or property earnings or how many cents per kilometre I can claim on my car.

I forget every year, and it saves me from annoying my accountant with an annual Groundhog Day series of questions.

Work with a small business-focused accountant.

I’ve always been my own book-keeper, so that I can maintain total oversight into the day-to-day money management, but when dealing with Uncle Sam, I defer to an accountant who has both a small business background (owning their own) and managing the financial affairs of others like mine.

I think staying away from mainstream accounting firms is a smart move.

Working with someone who has a deep knowledge of specific SMB taxation policies and laws (including how they change) can help avoid costly mistakes if randomly audited.

For me, it’s a tax-deductible expense and as it’s a person who I have a relationship with, I can ask questions any time via email or phone and she gets back to me quickly with everything I need. 

Keep subscriptions to a minimum.

There’s no award for spending the most on exxy softwares, no matter how flashy they seem. That’s not to say that some aren’t worth paying for (even at a premium), just that they aren’t all.

I have the basics – obviously email, my website hosting, a robust accounting software… but in any case, it’s not that expensive software keeps me organised and minimalist.

On the contrary, keeping things simple and efficient is what gets me away with using the free version of the software. So it’s cheaper. And as a digital business, I need a good tech stack – I have lots of things going in and out all the time, but I don’t need to make it overwhelming with toolkit clutter (I natter on about my tech stack more via that link).

The most complicated part of running your business should be anything and everything external. Like clients, or customers… the weather, even. Nothing you can control, like money and expenses and tax. That’s all well within your hands.

January 22, 2020/2 Comments/by Michelle
https://thatgirlonfire.com/wp-content/uploads/2020/01/Chairs.jpeg 1500 2321 Michelle https://thatgirlonfire.com/wp-content/uploads/2019/02/That-Girl-On-Fire-Web-Logo-Header.png Michelle2020-01-22 10:08:132020-01-22 10:25:47Managing Business Financials As A Minimalist
Minimalism

Minimalism And Money: Peas And Carrots

Minimalism and money are two things that go hand-in-hand.

And while you might think that the notion of having fewer things, or maintaining more simplicity in your life has little to do with the way you manage your cash – you’d be wrong.

In fact, minimalism has everything to do with money. Minimalism is about the re-evaluation of priorities.

It’s about understanding our internal motivators, what brings us joy – and of course, what doesn’t – and cultivating spaces around us (physical, digital and psychological) that are conducive to a life more full of shiny feelings instead of shiny things.

As humans, we have very precious and finite energy stores, yet we spend so much of it on keeping up appearances. We reach for conveniences because we’re too time-poor to even have time to think about how time-poor we are, and we’re so used to being bombarded with products, subscriptions and offers that oftentimes we don’t even notice we’re being lured in until we’re within the predatory grasp of the sale.

This all comes at a major cost. Not just to our health and ability for self-awareness, which I truly believe erodes over time with too much clutter and overwhelm – but to our financial wellbeing. People think it’s expensive to be a minimalist. I think it’s expensive not to be one.

For many years, I have lived a life that is fundamentally minimalist, both in how I keep “earthly possessions” in the physical world around me, but also how I view situations and problems, treat others and prioritise things that matter to me. The benefit of this on my wallet has been enormous, so here’s how I apply minimalism to my everyday:

I don’t buy what I don’t need. Genuinely.

As in, I rarely buy material things ever – and when I do, I go through a rigorous thought process beforehand. Do I need this? Will it solve a long-term need? Is there something I already own that could do the job? Could I rent, or borrow this instead? Will it hold, or even grow in value (should I choose to sell it later on)? Rarely do things I want to purchase tick all of those boxes, and so I can filter through a lot of ‘nice-to-haves’ in order to find what I really do need.

Intentional spending gives you breathing room to properly, and fully, evaluate. It exercises your brain to think critically about things it is programmed through predatory advertising to normally have no say in, and affords you the benefit of time and purpose to help you conserve your money for things that are worth the exchange. That makes them all the more worthwhile when they come around.

I reuse and find other uses for the same item.

Many items are, by design, multipurpose. We just often don’t believe, or see it.

Certain oils are great for the hair, skin and for cooking. A myriad of cleaning products and laundry detergent can be created from simple soap bars and white vinegar. Jars can be used as storage and then pulled out for decoration later on. Toothpaste is good for everything from dental hygiene to burns to jewellery cleaners.

When you see the potential for second lives for your items, you negate the need to have something specialised for every purpose.

This clears space but also keeps your bank account looking pretty full, especially when you consider how brands typically markup niche product ranges. And when you couple this with being less wasteful, like bringing your own jars, bags and pouches when shopping, you’ll see just how damn expensive, and limiting, packaging can be.

I keep things simple online as much as offline.

My digital life is as simple as my physical one. Everything is neatly collated and categorised, and the second I’m finished with something, there’s no archive or memory bank – into the bin it goes. I love holding onto memories, but if I’m honest with myself, I find more solace in feelings instead of things.

I’ve realised that if my nature is to archive something away, then the likelihood of seeing it again before at least another year or two is very low. And besides the fleeting chuckle of looking at a physical photo of a day in my life I cherish, there’s not much else that happens other than I put it back away. So, for files I really love, I keep them in a single cloud folder on my Drive, but mostly, I don’t keep a hold of anything but money.

Because I used to work in the media, I like to stay informed and aware. But when there are hundreds of companies vying for my attention with their updates, I’ve learnt not to feel guilty about subscribing only to a select few media platforms I know and trust. This is the same with entertainment.

There’s something very satisfying about having clarity and direction in what you allow to burn through brain cells every day. It’s kind of like sitting on a bridge on a highway, watching the clouds move when all the cars are frantically speeding on the lanes underneath and around you.

And while some of these things cost, because we absolutely should be paying for ethical, impartial journalism, and really good entertainment, what I get is way more valuable than any subscription fee. I’m afforded the luxury of staying present and in-the-know without the constant, mind-numbing noise of literally everything else I don’t care about, but that I’d undoubtedly be ground down to spend on.

I throw complexity out the window when managing money.

People sometimes say to me a little sheepishly “I only have a few bank accounts where I store my money.”

Well, that’s a couple more than I have. I don’t believe that there’s a complex formula to saving your money as a minimalist; at least not one I know anything about. I have a personal banking account for everyday transactions, a business account for anything related to my business (which makes tax time a dream), a bonus interest rate savings account for anything that’s not applied to the portion of our primary home loan that’s set up as an offset, and a credit card.

Managing my money day-to-day is simple, because why make it hard – and hard to remember? I pay my regular cost of living, business and maintenance bills, I shelve 70% into savings and investments (through separate investment accounts) and I live on the rest. I carry cash very infrequently, because I like having my money where I can see it, and I don’t have complicated insurance structures set up. They’re simple, run-of-the-mill things because that’s all I need.

Money management should be habitual and repeatable; with the same actions happening over and over every month. It’s the only place mundanity will help you thrive, whether it’s saving up or paying debt down. Make it muscle memory.

I keep a simple investment portfolio.

Much like my daily money management processes, my investments tick along just as simply. I pick investments that I understand and don’t require me to be very hands on – because at this stage in my life, I can’t be.

Property is one that requires a lot of upfront work, but significantly evens out, minus the occasional maintenance job, and shares – particularly the kind we like, ETF’s and LIC’s – are all bought, traded and managed online, with easy reporting when we want a clear overview of how our holdings are performing. We set up reinvesting automatically upon purchasing new shares because that’s extra work we can take off of our shoulders, and we don’t need to draw our investments as income right now.

Superannuation is managed from the one account (if you’ve got multiple accounts – combine, combine!) and I contribute concessionally to the tax-deductible cap (which is $25,000 for people who are self-employed). This is a regular part of my savings schedule every month.

Because we are long-term investors interested in growth (two-dimensional investments that grow in value and pay out income), rather than defensive assets (just paying out income, like the high-interest savings account above, which earns interest on the base amount deposited), the simplicity around our investments helps us to stay on top of it and make contributing habitual.

Maybe later, I’ll look into seed investing in startups and real estate investment trusts (REITS), but right now, we’re only interested in things we can easily manage and keep an eye on. Applying minimalism to the stage of life we’re at when it comes to our investments helps us to stay focused and make it a priority.

If it all became a bit too overwhelming, we’d probably sit back and stop, which would mean we’d be missing out on our investment’s most important moneymaker: time.

Ultimately, we’re hardwired to feel a lot of guilt and fear for missing out. We want all the things. All the content. Knowledge. Experiences. But what we forget is that a lot of that stuff doesn’t even apply to us, and it certainly doesn’t fulfil us. It drains our energy as much as our wallet. In a way, this makes us compliant and easier to persuade – moving us further away from what we really want.

Minimalism and money just makes cents. Going through the process of streamlining and cutting out crap is one of the most powerful things you can do for your finances. Looking after your money by looking after your time, and guarding your surroundings, is so easily forgotten – but so easy to put back in place.

February 28, 2019/0 Comments/by Michelle
https://thatgirlonfire.com/wp-content/uploads/2019/02/TGOF-Pink-Background-And-Keyboard.jpg 4000 6000 Michelle https://thatgirlonfire.com/wp-content/uploads/2019/02/That-Girl-On-Fire-Web-Logo-Header.png Michelle2019-02-28 16:54:372019-07-24 21:01:24Minimalism And Money: Peas And Carrots

Recent Posts

  • Beating The Cash Crunch: 5 Ways To Survive and Thrive During Recession
  • What We Absolutely, No Way In Hell, Do Not Spend On
  • The Top 5 Financial Lessons For Kids To Learn Early
  • That’s Bloody Super: Ways To Maximise Superannuation
  • The Most Common Ways To Achieve Financial Independence

Search posts

A bit of history

  • March 2023
  • January 2023
  • October 2022
  • August 2022
  • September 2021
  • July 2021
  • August 2020
  • January 2020
  • October 2019
  • August 2019
  • July 2019
  • June 2019
  • March 2019
  • February 2019

Blog categories

  • Financial Independence
  • Intentional Spending
  • Investing
  • Minimalism
  • Money Tips
  • Superannuation
  • Zero Waste

Mo money, less problems. Follow our journey to FIRE on Instagram.

Negroni. Spagliato… with Prosecco in it. Stunnin Negroni. Spagliato… with Prosecco in it. Stunning.
Instagram post 18005170279532297 Instagram post 18005170279532297
Instagram post 17943511508208751 Instagram post 17943511508208751
Instagram post 17896937675650953 Instagram post 17896937675650953
Thanks for having us last night @moneymagaus A cra Thanks for having us last night @moneymagaus A cracking soirée as per usual 🥂🎊 @theestablishmentsydney @amywhitby92
On 40th birthdays, you treat your loved ones with On 40th birthdays, you treat your loved ones with a private boat charter, dropping anchor, and becoming boaty/hoey in equal measure. So much fun and joy to celebrate Andy’s nautical fortical ⚓️✨

Disclosure and Terms of Use

Privacy Policy

Copyright © 2021 That Girl On Fire

Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

OKLearn more

Cookie and Privacy Settings

How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, you cannot refuse them without impacting how our site functions. You can block or delete them by changing your browser settings and force blocking all cookies on this website.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visist to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Vimeo and Youtube video embeds:

Privacy Policy

You can read about our cookies and privacy settings in detail on our Privacy Policy Page.

Disclosure and Terms of Use and Privacy Policy