Managing your finances effectively requires more than just reacting to financial challenges as they arise. Being proactive with your finances involves making a plan, developing strategies, and taking consistent action to achieve your financial goals.
I encourage you to start being proactive with your finances today for a brighter and more financially stable tomorrow. Being proactive with your finances empowers you to take control of your financial future.
The importance of making a plan and strategies
A well-thought-out plan gives you direction and helps you to prioritise your financial goals. Planning involves taking the time to assess your current financial situation, set achievable objectives, and outline the steps needed to reach them. Whether you want to achieve business growth, buy more equipment to increase or improve production or have the funds to hire a new sales team, having a clear plan in place is essential.
Strategies complement your financial plan by providing actionable steps to achieve each goal. For example, if you aim to build up your cash float to cover six months of expenses if times get tough, your strategies might include setting up automatic transfers to a dedicated savings account (make sure it is an account earning interest) and cutting back on non-essential expenses. All plans need strategies to make it happen!
Sticking to the strategic plan and taking action
Creating a financial plan and strategies is just the beginning. The real power lies in implementing those strategies consistently. It’s easy to get sidetracked or tempted to deviate from your plan, but staying disciplined is crucial. Avoid impulsive financial decisions and remind yourself of the long-term benefits of sticking to your strategy.
One effective way to ensure you stay on track is to regularly review your progress. Set aside time each month or quarter to assess how well you’re adhering to your plan and adjust your strategies if needed.
Make time for your finances because they won’t make time for you
Proactive planning requires dedication and time. Don’t wait for the perfect moment to plan your finances; instead, make time for it in your schedule. Treat financial planning as a priority, just like any other important commitment in your business. Block out dedicated “strategy days” in your calendar without distractions to focus solely on your finance alongside your strategies.
Plans need to be reviewed every 90 days (sprints)
Business circumstances can change rapidly, so your plan needs to remain flexible and adaptive. Consider breaking your financial year into quarters and treat each quarter as a “sprint.” Every 90 days, review your progress, reassess your goals, and make any necessary adjustments to your strategies.
Nurture your strategy and measure it: review regularly and adapt
Nurturing your financial strategy involves regularly monitoring your financial decisions and their outcomes. Keep a close eye on the impact of your strategies, the expenses associated with these, and the growth of the business. Review your budget regularly to ensure you’re staying within expected spending ranges and making progress toward your goals.
Be willing to adapt as necessary, especially if certain strategies aren’t yielding the expected results. The key is to remain agile and pivot when needed to keep moving forward.
You can plant the seed, but you also need to water it
Financial success requires consistent effort and attention, much like tending to a garden. Simply planting the seed and creating a financial and business plan isn’t enough; you must actively nurture it. Regularly review your expenses, track your expected revenue growth targets and think about the financial decisions required to reach your goals.
Remember that financial and business growth takes time and patience. Stay committed to your plan, and as you consistently “water” and nourish it, you’ll see your financial goals take root and flourish. If It’s not in the sun, your plant won’t grow.
