Nancy, Outstanding message.  You are 100% correct about it's not how much you make but how much you spend that makes all the difference in our finances. It's all about choices.  Great blog.  I needed it.

Nancy

I go over every month's statement and make notes of what paid for what and have a good understanding of what it costs me each month to run my business. I budget myself each year and usually stay with in 10% of my annual budget.

I am constantly looking for ways to sock away money each and every day.

I do not look on a monthly basis since checks and expenses are not in the same time period. I know that my expenses are 20-25% of my gross commissions when the year is up. This includes my retirement account and salary. Have no idea what will happen next year.

As the market has slowed down, I've reviewed my expenses twice this year - at the beginning of the year and in June.  I will take another look at the end of the year as I get ready for the tax filing.  It is kind of shocking when you look back at some things that you purchased that went unused or not fully used.

Nancy,

I have to agree with you, it is easier to spend money that it is to save it and earn it. But I've since learned to keep a ledger and it's been the best thing I've ever done for my business!

Have a great weekend!

I am Coached, so, yes, I have a personal budget and a business budget. Simply take 1/3 of your check amount from closings, pay the IRS, take 1/3 and pay your expenses, and the remaining should be split in half between your personal income and savings.  Sep-Ira's are the best product, I believe, for Realtors.

It's a Good Life!

Fran Rokicki, Clubnet~Mentor

Hi Nancy,
Now that is a lesson that some people never learn.  Getting value for money spent is so important, it is amazing how money we can waste if we do not pay close attention.

ROI - Return on Investment.  It's not about how much you make, it's about how much you keep at the end of the day.  Great post Nancy!

Carpe diem,

Chris Pollinger

A word of advice on this topic...be careful that you don't cut out expenses that are currently generating income and net profit for you.  Test everything you do and track the results and the ROI.  I have seen top agents get in the cutting mode and some of them have cut off the best marketing they had but didn't realize it until their business failed and then it is much harder to gain that business back.  Growing your business is easier in a down market because so many others are cutting back...this can be the best time to grow your business and build market share.  Cutting back on fluff and non business related expenses is a move in the right direction.

I for one let nancy handle the books. After all she is a CPA. The only thing I would request is  a few dollars more per week.  Sorry nancy but you don't pay me well.

I agree you need to have a budget. You need to monitor your expenses to see what is making a return for you.

Great post. It truly is what you keep at the end of the day, but in this market it is almost a requirement to reinvest.

Wonderful reminder Nancy about ROI. What bugs me about statistics with REALTORS is so often they report GCI. But what was there "net income?" That's where it gets very fuzzy. Maybe you can write a blog about typical REALTORS net income.

Nancy - As I was reading I was thinking "Well, I do that, but I am sure not many people do.  I guess Nancy and I think alike." Then when I got to the bottom I realized that you were also a CPA...LOL