Businesses and individuals alike are always interested in improving their bottom line. It can be accomplished in many ways, but focusing on decreasing overhead, and increasing profit are excellent starting points. 

For businesses, revenue minus costs equals profit. For individuals, earnings minus spending equals savings. 


My goal is to help you take a business-like approach to improving your personal finances. Over my 20+ year career as a financial advisor, I’ve helped countless people to do exactly that. I’m honored to be named to Investopedia’s list of the top 100 financial advisors many years running. 

Here’s what we’ll cover:

  • Earn more, or live on less
  • How to increase revenue
  • How to reduce overhead

Let’s get started.

Earn more, or live on less

Years ago, someone asked me, “Is it easier to earn more money, or to live on less?” What do you think? 

What goes through your mind when you think about earning more money? Does the thought of it excite you, or does it terrify you? Maybe you’ve got the time, energy, and attention to devote towards earning more, or maybe you’re completely tapped out. 

What about living on less? If you’re in a position where there’s not enough money to go around, and you don’t see a path to earning more money, your only option is to figure out how to live on less. I’ve never taken a vow of poverty, and I don’t expect you to either. But you may need to make cuts to certain aspects of your lifestyle.   

When considering cutting expenses by reducing lifestyle, it’s really important to take a comprehensive view of your life beyond just money. The idea is to create a vision for your future that’s better than your current situation. When you’re able to do that, it becomes a lot easier to make cuts and sacrifices. From my experience, making lifestyle cuts for the sake of making cuts isn’t a sustainable solution. 

In service of helping you do that, I encourage you to read this post on developing a personal mission statement, and you can access our Goals and Values courses for free. When you do the work of thinking about how you want your life to be, it makes changes easier. 

How to increase revenue

When working to increase revenue, a CFO has many options available. They can work to increase current revenue streams by delivering additional value and increasing prices. They can also work to create additional streams by adding new product lines.  

For individuals, there are also a lot of options for making more money. 

If you’re in a career you love, how can you earn more? What’s the path to a promotion or increase in pay? Is there a new certification or designation you can earn? What would make you more valuable to your organization?

If you’re not in a career you love, what pivot can you make in order to make more money? Does it make sense to go back to school? Do you have an entrepreneurial idea you’d like to bring into the world?

Do you have extra time, attention, and energy? If yes, there are a multitude of ways to earn extra money online and offline. There’s a great website, SideHustl, that has done the work of researching money-making opportunities that help you decide what could be a good fit for you. Should you decide this is a good option for you, please check your employment contract to ensure you don’t get yourself in trouble.  

How you handle increases in compensation over the course of your career can also have a massive impact on your finances. If every time you received an increase in compensation (say 5%), you increased your retirement plan contribution and your lifestyle spending (2.5% to retirement and 2.5% to lifestyle), you’d be positioning yourself for long-term financial success. 

While it would be ideal to start that strategy in your early 20s, it’s prudent to start today as well. 

How to reduce overhead

Just as when trying to increase revenue, a CFO has a lot of options to reduce overhead. They can look to reduce fixed expenses like rent, technology costs, and marketing. And they can look to right-size their workforce (layoff employees). 

For individuals, it’s important to review your cash flow and budget, and there are four areas I encourage you to focus on.


Cash flow

Most people don’t know how much money they earn and how much they spend. To get a stronger handle on cash flow, go through the past 12 months of your expenses. You do this by logging into your financial accounts and reviewing the transactions. You’re looking for things you’re spending money on that you’ve forgotten about, or are no longer bringing you value. When you find these, get rid of them. 

Budget

Having a budget is essential for your financial success. It’s simply a plan for your money. It helps you know when you’re on track, and when you need to make adjustments. There’s not a right or wrong way to keep a budget. Paper, spreadsheets, and apps are all effective. The key is finding what’s right for you. 

Debt

If you’re in credit card debt, it’s the first thing you should address. The average American has over $6,000 in debt, and the average interest rate is over 20%. Credit card debt is a burden that prevents us from pursuing our most important financial goals. To help, you can access our Get Out of Debt course for free. 

Housing

We overspend on our homes and apartments. Your total housing costs shouldn’t be over 30% of your gross monthly earnings. If you find you’re over that number, it’s time to make a change. 

Vehicles

Vehicle expenses shouldn’t be over 20% of your take home pay. Just as with housing, if you’re spending more than that, a change is needed. 

Food away from home 

Before the pandemic, Americans had eaten over 50% of their meals away from home. That means buying food somewhere other than the grocery store. This is an easy trap to fall into, and an easy one to get out of. If you’re in the habit of doing this, start changing your behavior a little at a time. If you’re eating lunch out five days a week, start bringing a lunch one of those days. 

Those four areas are the key places we overspend. 

If you decide to make cuts, I encourage you to think about them as short-term changes. Think of it as taking one step backwards in order to take many steps forward. Any cuts you make will position you for long-term success. When you’re on track to meet your most important objectives, you can always add back whatever you cut out. 

Closing

What do you think? Will you pursue ways to earn more, live on less, or a combination of both? Whatever you decide, take action. You and I have time to do most everything we want, but not enough time to waste. 

If you’re ready to take control of your financial life, check out our DIY Financial Plan course. 

We’ve got three free courses as well: Our Goals Course, Values Course, and our Get Out of Debt course. 

Connect with one of our Certified Partners to get any question answered. 

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