I’ve been a fan of Jen Sincero ever since I read her first book, “You Are A Badass”, so it was a no-brainer for me to pick up her newest book, “You Are A Badass At Making Money”.
Let me just say that this book is one that I am going to read again, maybe even a couple of times. It’s that good. I had so many ah-ha moments!
As entrepreneurs, we need to focus on money. Especially our money. One thing is for sure, we don’t really talk about money in our industry or even on a personal level for that matter. I read in Jen’s book that people rather talk about sex, politics and religion before they talk about money…it can be embarrassing, it can be awkward. I get it!
One of my goals this year was to get crystal clear about my money so that I CAN take my business to the next level. It’s not just about managing money but changing your mindset.
This past February, I began focusing on 4 important numbers in my life; income coming in, expenses going out, business budget, and my personal budget.
This has allowed me to make SMART financial decisions both on a business and personal level. Plus, it alleviated the stress that comes with money. I am able to see the bigger picture which is liberating, and there is no longer the stress of trying to pay my bills.
Another thing that I picked up in Jen’s book, is this; what you focus on, becomes your reality. At one point I was so focused on not having enough money, that that became my reality. Once I started to focus on making money, that became my reality. See the difference? The first focuses on negative emotion associated with money while the second, has a positive emotion and evokes action.
These are the steps that I took to take control over my money.
Step 1:: Get really clear on what your money stands for in your business.
It’s one thing to have a purpose for your business and another to have a purpose for your money. We all started in business to make money, right? I wrote down for the first time last year what the purpose of my money was. Let me say how powerful this is to write it out on a goal card. I didn’t stop there. I placed that goal card right next to my computer. I would see this almost every day. And guess what. I achieved that goal and then some. In addition, I visualized what it would be like to have that money. For me it was to travel. I visualized myself with my husband on the beach, drinking a Pina Colada, reading a book on a hammock. The wind was blowing slightly and I could feel the warm sun on my face. And in March of 2016, my husband and I traveled to Belize for 10 days. Visualization is powerful.
There is this awesome story in the book that talks about Jim Carrey, the actor. Before he became famous, he wrote a check to himself for 10 million dollars and post dated it three years later. He then would have conversations with himself of what it would be like to have directors call him to congratulate him on his acting performance. He visualized his colleagues doing the same thing. At the time, Jim Carrey was broke; working several part time jobs just to make ends meet. But he kept at it. He kept putting himself out there picking up small roles here and there. Three years later, a day before the date he wrote on that check, he got a call from a director offering him the starring role in Dumb & Dumber for guess what? $10 million dollars!
I love this story because the power behind visualization is that it’s motivating. It’s action taking. Get super clear on what you want to achieve financially and visualize it.
Step 2:: Separate business and personal accounts.
Last year, I used my business account and personal account interchangeably. [Insert a big sound buzzard.] I know, right! After taxes, I vowed that this was it. No more. I have two business checking accounts and one personal account and treat them as such. I have a main operating business account. The second business account is for taxes and upfront fees (makeup)/pre orders (grad announcements) I need to save for. You too should have at least two separate accounts …like yesterday.
Step 3:: Have money days.
I implemented “Financial Fridays” in my business. That means every Friday, I met with myself and did the following; paid myself first, paid taxes, and then paid expenses. Every Friday. For some, paying yourself every Friday is not feasible. Maybe you do it every time you get paid. Whatever you decide, the key is to set up a schedule to meet with yourself and do money stuff.
Step 4:: List all business expenses.
How many of you know exactly what it cost to run your business? I do! I went thru all bank statements, my Paypal account and wrote all of it down, I mean ALL of it. Nothing was left off. I used a piece of paper and then transferred it to a spreadsheet. I included the name of the vendor, the amount, the date it went out and whether it was yearly or monthly. Take some time and commit to doing this. After it was all said and done, it took me about three hours. You can do it! You’ll feel so much more organized.
Step 5:: Purge expenses.
I went through all the expenses and cleaned house! It was time to cancel, unsubscribe etc, the accounts that were not impacting my business in a positive way. This meant looking at similar services where I could merge or cut out. I price shopped supplies and vendors. I even did this with personal expenses. This step was so up-lifting. It felt so good! You need to do this too. Purge expenses. Find ways to save money.
Step 6:: Set up a budget.
This part was the easiest. Once I knew how much money was coming in and how much was going out, I could set up a budget for both business and personal. This is the time to save for “want” items such as new equipment or a workshop. I wrote it out on a piece of paper and then transferred it to a spreadsheet. The spreadsheet included: the expenses and the amount you are budgeting for that item. Once a month, I return to this spread sheet and replace the budget with the actual amount spent. Adjust the numbers if you see that you are spending more or less.
Step 7:: Set up a forecast.
One thing that happened when I first started in business, is that someone would pay me and I would just assume that I had access to that whole amount. BUT, the truth was that I needed to set some money aside for upfront expenses that I had. For example a session fee, mine includes a makeup fee. I now have a third checking account that I move money soon after I get paid to that account when a session fee comes in. The third account was easy to open at my bank so I can do this electronically.
Step 8:: Check money daily.
What, what?? YES. Every morning I check accounts. I have a cool spreadsheet (trust me I really only have four spreadsheets) that essentially acts as a ledger. Of course, you can use an app to do this too, but I like my spreadsheet. It gives me a full month’s view, too. Then by the close of day, I reconcile what went out and what came in. This literally takes about 10 minutes. Doing this one thing every day has made the world of difference in how I look at my money. There is a statistic out there that people who count their money, makes them happy. I didn’t need a statistic to tell me that because it’s so true!
Step 9:: Set up a bookkeeping system.
This goes without saying. No one, and I mean no one wants to be that person a couple days before tax deadline trying to figure out your taxes. This doesn’t have to be a crazy system. All you need is what is coming in, what is going out and what you are paying yourself. I use Quickbooks and to be honest, I outsource this. While I do all the above, the last thing I want to do is my books. So I outsource this. Once a month, we chat what the numbers look like (which now I can reciprocate and actually know what the heck I am talking about). Plus my bookkeeper can give me insight on what I should look out for and what I can do to make adjustments for the better.
Step 10:: Write down money mantras.
I wrote out some mantras that pop-up as reminders on my phone. It helps to read these daily. Money is not just a numbers thing, it’s also a mindset thing. I totally believe that I am a badass at making money. Remember, positive thoughts lead to action. Action leads to answers. Answers leads to knowledge. Knowledge is power.
Choose one step at time and commit to implementing it. I didn’t do this overnight. It took diligence and the desire to make a change in how I viewed and treated money. I want to be in control of my money and not have it dictate my passions and ideas.
Over to you. What are you going to take action on? Leave a comment if you learned something or appreciate this post.