This is something I look forward to do each month and at the end of the year. I know I may sound weird but I like to work with numbers and analyze how we did for the month or year.
Darlene and myself have recaps of years past and then I have my recaps back from in the 1980’s. Yes, I am an old timer to some. LOL It is fun to look back at how low the numbers were on our Profit and Loss recaps back in the 1980’s and 1990’s.
We do Profit and Loss recaps each month and each year. I will call them P&L’s for the rest of the show to save me some typing. LOL
As always, I am not giving you any Financial Advice and you should seek advice from your Professional Advisors to see what is best for your situation. See my Disclaimer at MillsWay.com. This is for entertainment only.
We do P&L’s for our Personal Income and Expenses each month and also for our Business ventures each month. For us it is our Monthly and Yearly report card on how we are doing. If we are winning or losing. Also, where we need to improve.
We compare a lot of different categories each month and year along with our P&L forms like how each of our Investments are doing and our total Net Worth.
Back years ago, when we had that nasty thing called “Debt” I used to do monthly and yearly recaps on that also. Thank goodness we haven’t had that for along time and plan on never being in debt again.
Each month the totals can range widely depending on when a big bill comes in. So, we list the big bills that are due at the top of each column on the recap to remind us.
For instance, we pay our car insurance every six months. If comes due in February and August. With Logan on our Car Insurance currently that is a large number. Then House Taxes we pay a year at a time and they are due in September. House Insurance we pay in August. Car tabs are three different months and we buy two years of tabs at a time. We have a yearly bill for Life Insurance due in May. We normally take a vacation in June or July. Then of course Christmas time. So, as you can see each month can vary a lot.
This is why we also compare each month from the month from last year and other past years to see how we did. I know with inflation some things go up but if things go up more than inflation, we research it and come up with a plan.
When our Car insurance jumped years back over the previous year we got quotes from a lot of different companies and ended up lowering our new bill by over 20%.
If our Incomes aren’t increasing as much as our expenses we need to decide if we need to find ways to get more income or to revise our spending each month or the rest of the year.
We also have a twelve-month rolling P&L versus our Budget and the last three years expenses for another snap shot to see how we are doing and with this form it is an easy one to see if we need to make adjustments or not in the new month.
At our end of the month review meetings we cover all the different P&L recaps that we do plus our Year goals that we set at the first of the year. We update our goals each month and quarter to see how we are doing towards them also.
The boys we hope will do not only this Financial Freedom rule when they are adults but also all the rules that we teach them. This rule is so important to helping keep them focused on attaining what ever their Financial goals are plus help them to hopefully stay debt free by not spending more money than they have.
We tell them that they need to think of their own expenses and income just like a business. A business won’t be in business long if they spend more money then they bring in. So, if their expenses are more than they are bringing in they have at least two clear options.
- Make more money. Either get a second or third job. Ask for more hours at their current job. Get a higher paying job.
- They could reduce their spending. Look for expenses they could cut back on or cut out completely.
Do you do a P&L each month for yourself or for your family? Do you think it is a good idea? If you don’t then how to you keep on track each month without spending more than you make? Let me know. I like to learn from everyone and then give other people that are looking for Financial Freedom even more ways to reach their goals.
Here are some positive quotes I like;
“Get your Money to Work for You… As hard as You Work for it.” By Napoleon Hill
“1. Make Money. 2. Use the Money to Make More Money. 3. Repeat the Process.” By Warren Buffett
“There is no way to happiness; happiness is the Path.” By Buddha
“Change Your Thoughts – Change Your Life” by Wayne W. Dyer
Let me know your thoughts about this blog and let me know of others you would like me to do in the future. I feel we can all learn from each other. That is why I am in the helping people retire early, enjoy life more and be more successful. Also, please see my Disclaimer page.
Don’t give up on your dreams; don’t let others talk you out of your dreams. Make your dreams happen. Make it happen today.
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