Ep. 421 - Simple Business and Personal Accounting

Leaving your day job and trying to be...dare I say, a “homesteader” is not easy.  It requires a significant change in perspective, one that takes time, and the utilization of questions such as the Five Ws and How.  

Join Rob as he shares his story about moving away from accounting software and embracing the simplicity of Excel Spreadsheets and simple tools he is using to budget with confidence, track transactions, and gain insights into his spending and savings habits.  

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Discussion Links:

The Modern Homesteading Podcast - Redemption Permaculture
Join Harold Thornbro and Rachel Jamison as they talk about all things homesteading! They discuss things like gardening, livestock, permaculture, food preservation, and more!

RewilderLife
“Grow where you’re planted.”
Check out the latest post on Roasted Tomato and Wild Sorrel Ketchup

Ramsey Trusted Providers | RamseyTrusted - Ramsey Solutions
Our providers are advocates for Ramsey's financial and business principles. They know their job is to serve—not sell.

EveryDollar | RamseySolutions.com
EveryDollar is the best way to budget with confidence, track transactions, and get insights into your spending and savings habits.

Tax Checklist | RamseySolutions.com
Tackle your taxes head on this year. The Tax Prep Checklist will help you gather all the necessary documents and choose the right deductions.

York Meadow Farm: Lacto-Fermented Foods
Rich in probiotics, our fermented foods are also paleo and keto friendly. Eat a proper human diet.

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Transcript

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SPEAKER_00 0:00

If we stand together, we'll never fall.

unknown 0:08

We can make a difference.

SPEAKER_01 0:11

Well hey there, how's it going? Welcome back to the show. I'm glad you're back with us today. Today is Wednesday, September 14th, 2022. This is episode number 421 of a show where we co-create life together with the family here on the homestead. We talk about the five W's and how as we grow along with the family business at York Meadow Farm. And the five W's, sometimes referred to as the Five W's and How, Five W1H or 6Ws, are questions whose answers are considered basic in information gathering or problem solving, according to Wikipedia. Now leaving your day job and trying to be, dare I say, a homesteader is not easy. It requires a significant change in perspective, one that takes time and the utilization of questions such as the five W's and how. Now, speaking of homesteading, if you're interested in another cool perspective on homesteading, I would encourage you to check out the Modern Homesteading Podcast with Rachel Jameson along with the other work that she is doing. She's another real-world example of someone who is co-creating life in this way. Except that she's doing it her way, in a way that's appropriate for the context of her life and her family. And that's what this is all about. It's about finding people who live a life that you want to live. Because sometimes you might feel alone with what you're doing out there. And I assure you, you are not. There is someone out there who's sharing a message that you need to hear. And you know what? Perhaps it's not here. I would encourage you to use the networks and connections that are being created as a result of this show to further enhance your life, kind of like a slingshot effect. You know, hopefully what happens as a result of this in the community here slightly impacts your orbit, resulting in big change in the long haul. Called life. So here's the deal. You know, the software programs that I was using, had been using, well, they cost money. And when I had a day job and what seemed like dispensable income, I could afford what now seem like ridiculous things like accounting programs like QuickBooks for a business that was barely operational with just a few clients. And it really still is that way. And on top of that, I also use or tried to rather personal accounting programs like Quicken. And I also tried to at one point use those for the business as well. Now I you see I continue to say tried because I never used either of these programs consistently or effectively. Now, after some dialogue with others who are in a similar position as myself, and ultimately some dialogue with my tax guy, I decided to keep it simple and work off of a simple spreadsheet. Okay, so what is in this simple spreadsheet, you may ask? Well, uh, the easiest thing to do is just uh to pull it up and share it with you and explain what it is and uh what he provided to me, and because it's all it contains is the information that he needs. Okay, so the the the document that he gave me is a Schedule C revenue and expense tracker. So we've got two tabs in this simple spreadsheet. One is revenue, one is expenses. I'll be tracking the cost of goods sold, date, amounts, notes, advertising expenses, car and truck expenses other than mileage, contract labor, items for depreciation expenses, like the description of the item, the date it was placed into service, total expenses, employee benefit program expenses, insurance other than health insurance, interest paid to banks or other, legal and professional services, minor office expenses, not equipment or furniture, pension and soft profit sharing plan expenses, rent or lease expenses for vehicles, machinery, equipment, or business property, repairs and maintenance expenses, supplies, taxes and licenses, travel costs, business meal expenses, utility expenses, employee wages, less employment credits, expenses of self-employee health insurance and unreimbursed health costs for self-employed, vehicle mileage, other expenses that do not fit well into the categories above. And then for revenue, we've simply got gross revenue, reduced gross revenue by any refunds, returns, or allowances, and that is my gross revenue. Okay, so I created a separate tab on this just to simply uh log my work, you know, what I'm doing, what I'm getting paid for, and the mileage that I am utilizing for each job that I am working. Now, this is really simple because at this point in time I don't have much taking place in terms of transactions, or you know, it's it's really less the transactions that are taking place, and it's more what is relevant to the business and ultimately uh what needs to be reported for tax purposes. Okay, so that's it. This simple spreadsheet is going to be everything that I need, and everything that my tax guy needs in order to get things done the way they need to get done. Now, I could do my taxes myself, but given my own history with finance uh management, so to speak, and and and the the lack thereof, I've decided to work with somebody, and this is an individual that I found through uh ultimately through Financial Peace University, where I learned of what used to be called endorsed local providers, ELPs. Now, through the rebranding that Dave Ramsey and his foundation is going through, they are called Ramsey Plus, trusted professionals, I believe. And this program allows you to connect with professionals who are, for lack of a better term, vetted in the uh Dave Ramsey way of doing things. And um you can talk with anybody from tax professionals to real estate professionals to investment professionals to insurance professionals, you know, anything related to finance and life, I believe, and uh promote the use of these Dave Ramsey or these Ramsey Plus trusted professionals. I've used that I currently use them with my tax uh work. I also obtained an insurance agent through them and was able to actually receive a better rate through the same companies I was actively insured with utilizing this agent. So at the end of the day, I save money and it makes my life easier because I'm dealing with the agent. How that works, I'm not entirely sure, but it's something to look into if you are in a similar position as myself. So check it out. I'll link to everything I've discussed, I'll link to that in the show notes for your reference. And um as far as personal accounting is concerned, um that's really less of a big deal. Uh you know, in terms of the the the initial dialogue that I had with him was primarily for business use. And I asked him if he had anything comparable for personal, and he said no. But he provided a couple attached documents that I could use as a guide for personal tracking. Now I will also link to this, which is a personal tax personal tax checklist from, like I said, Dave Ramsey. And this helps you get the information that you need to file your taxes for you, your spouse, your dependents, whatever, and helps you have the right documents in place, helps you know what you need to deduct deduct, and basically it's a checklist to make sure you've got all your ducts in a row when it comes down to tax time. It's a simple document, one page with your personal information and your income, what you need, a second page with common deductions, and that's it. You know, taxes aren't that complicated for the most part. Now there's gonna be people out there that argue with me and say that I'm wrong because you know what, the context of our lives is different, and uh I'm sure as time goes on, I will experience increasing complexity with the dynamics surrounding taxes and how it impacts my life. And as I continue to learn more about that, I will share. But for now, I'm going back to you know, I've I've done a good job of making things more complicated than they need to be, so I'm trying to keep it simple. So, you know, in addition to referencing those those documents that he sent me, I decided that the easiest thing I could do was also use the every dollar app, again, which is a Dave Ramsey thing for the tracking of my spending and indeed the creation of a budget, which I did last month for the which was the first time I did that in a long time, and something I should probably review sooner than later. Now, I know I said that I wasn't using any software, and this is software, but what's nice about using the every dollar app is I I appreciate the way that it connects with my local credit union. That makes things even easier, and while I'm not track, and while I'm I'm I'm about 50-50 with my cash cash usage and the transactions that take place on my card because there's a lot of automated transactions that take place, you know, um on a monthly base, not a lot, but there are still some, and since I've reduced my cash spending, there are less cash transactions, so I think it comes out to about 50-50. Nevertheless, what I like about that app is it gives me the ability to export my spending into a simple Excel document, which then I can further manipulate and share with my tax guy and obtain the information that I need for tax purposes, but it gives me some insight into my own spending habits and allows me to make adjustments where I need to make adjustments. And considering all the focus and whatnot that I've put on finance in the past, it's I I'm I'm I'm I chuckle because this app is so easy to use, and I was so reluctant to use it because it was new, and I continued to try to work off paper, but again, didn't do that consistently. But since my phone is always on me, I decided to sit down one day and make a dedicated effort to using the app and trying it to see if it would work for me. And you know what? It is. So, you know, for now, business is simple spreadsheets, personal is tracking and budgeting through the every dollar app, exporting that into simple spreadsheets, and that's that's about it. In the future, I may end up using programs like Quicken or QuickBooks again or something like Home Bank, which I think that's the name of it, which is a free and open source program. Um, but I will do that only once I've gotten a better handle on my own finances and can legitimately afford them, and only if I actually need to use them and will benefit from them. But previously, all it did was make things more complicated than it needed to be, and uh, I thought I was making things easier for my tax guy, easier for myself. But I was doing a lot of unnecessary work with something that I didn't really need to use and something that uh I didn't need to spend the money on. So for now I'm just going on the advice of people who have been there and done that, along with the advice of my tax guy, and as far as I can tell, that's all I need. I mean, like I said, I've done a good job of overthinking things in the past and trying to reinvent the wheel, but as I continue writing this current chapter of my life, all I'm going to do, or at least all I'm going to continue to try to do, is simplify. Simplify. Simplify. Alright, so stay tuned tomorrow for another epidate. Another epidate? Another update on a blog post and an email that is about to drop today from the farm and homestead here. If you want to get a sneak peek on that, then sign up for the newsletter. I'll link to that in the show notes along with everything else that was discussed today. And guys, I hope that you have a wonderful and productive day today, and I look forward to seeing you tomorrow. This is Rob Kaiser, and thank you.