Nov 9, 2022
It is essential to go through one step at a time when planning your business's financial operation. This week on Grow Money Business, we are going to talk about the small business owners' financial order of operations. Throughout the episode, we dive into the seven-step checklist of Dave Ramsey's and Grant's 10-step checklist for small business owners in their financial planning.
[00.21] Financial order of operations – A checklist that small business owners can use for their benefit.
[00.53] Baby steps – Starting an emergency fund, focusing on debts, completing the emergency fund, saving for retirement, saving for your children's college fund, paying off your house, and building wealth and giving are the seven steps of Dave Ramsey for financial planning.
[01.45] Ten steps checklist - Grant's 10-step checklist for small business owners.
[09.51] Step one – Establish a baseline emergency fund. We dive into the first step of Grant's checklist, starting baseline emergency fund by saving up one month's worth of personal expenses.
[11.28] Step two – Starting a baseline emergency fund with one month's worth of operational expenses.
[12.25] Step three – Paying off both personal and business high-interest debts is the third step, says Grant.
[13.00] Step four – Expanding personal emergency funds from one month's worth of expenses to between three or nine months' expenses, according to Grant.
[14.00] Step five – Expand the business cash fund.
[15.30] Step six – Establish a company retirement plan is the six-step on Grant's checklist.
[15.35] Step seven – Pay off your other non-mortgage debt as student loans, auto loans, etc.
[16.25] Financial flexibility – Grant dives into why we need to maintain financial flexibility.
[17.00] Step eight – Circle back to the retirement plan and maximize all the supplemental retirement saving options you have is the 8th step, says Grant.
[18.00] Step nine – Grant dives into step nine; starts saving for a kid's education and the importance of it.
[18.40] Step ten – The last step is to start building wealth.
[23.27] Emergency fund – Grant shares how to decide to build an emergency fund and what risks you have to take according to your current position.
Resources
Dave Ramsey’s 7 Baby Steps:
ramseysolutions.com/dave-ramsey-7-baby-steps
Financial Order of Operations Course
learn.moneyguy.com/financial-order-of-operations-course