Tag Archives | Financial Foundation

5 Steps to Build Financial Stability in Your Business and Your Life

MONEY – it’s a word that strikes fear in the hearts of many, however it doesn’t have to be that way!

Even worse than the word money is the word BUDGET. That’s like the swear word of money. I prefer “savings and spending plan” – it feels like money is flowing vs. being restricted.

In working with small business owners to help them with their finances, I’ve learned 5 key steps to start creating financial stability in both your personal and business lives. I firmly believe that one of the universal principles of money is that once you demonstrate that you can manage the money you have, that you’ll be able to attract MORE MONEY. And who doesn’t want more money?!?!?

Here are the 5 key steps to start building financial stability in your life and business:

Step #1: Separate your personal and business finances

Picture a visual in your mind with a “financial fence” between two houses. The house on the left is your personal financial “house,” and on the right is your business financial “house.” The fence is short enough to be able to stand on your tiptoes to talk with and coordinate with your neighbor.

Why should you care about this visual? If there’s no separation between your personal and business finances, you’ll never truly be able to understand how profitable (or unprofitable) your business is. And profitability is key to being able to make smart decisions about your business and to understanding the success of your business.

This essentially means separate bank accounts for your personal and business finances so that you can track financial activity separately. The ideal situation is for both “houses” to have their own solid financial foundation.

Step #2: Know your personal needs

It is critical for small business owners to know the monthly cash flow needs of their personal lifestyles so that they can build their businesses to support that lifestyle. Start with understanding the monthly amount that you need to pay the bills, to eat, and to have some fun in your life (your lifestyle expenses). This information will help you start to understand how you want (and need) your business to perform.

Step #3: Know your business needs

Now it’s time to understand the monthly needs of your business. The main piece of information you’ll want to get a solid handle on is what your fixed costs are. Fixed costs are just a fancy way of describing the costs that you’re incurring each month (i.e. costs for your email marketing service, rent (if applicable), medical insurance, etc). Determine what types of fixed costs you have and add up the total amount.

Then, if you take the monthly personal amount that you need (Step #2) and add on the monthly business amount, you’ll have a solid monthly revenue target to aim for in your business to cover your costs. (Note: This does not factor in the need to pay taxes on your business profit. If you want to go the extra mile for taxes, increase the total revenue target by another 30% to be conservative.)

Step #4: Pay yourself regularly

As business owners, we dream about positive change and transforming lives with our solutions. So we deserve to be rewarded for that, right?

I see many business owners forgetting to pay themselves regularly, or perhaps even at all. And while I can understand that when starting a business that there are sometimes more expenses than there is cash, it’s also important to give yourself some type of paycheck to recognize the value of your work.

My best advice if you’re not currently paying yourself regularly is to just start with a small paycheck. It’s not necessarily about the amount of the paycheck (at least at first), it’s more about the habit of paying yourself regularly. Every Friday I’m looking to give myself a paycheck, even if the amount varies weekly.

Step #5: Develop a financial routine

Financial matters can take up energy and require some thought, so it’s important to make sure you schedule regular time to handle your finances so something doesn’t slip through the cracks. Setting up time in advance to practice proactive money management is a key to success.

My #1 secret weapon with my clients is to schedule a weekly “money date.” Pick one regular time each week where you’ll commit to addressing money matters – paying bills, invoicing clients, reviewing your bills and any statements for errors (trust me, it happens more often than you’d think it does!), etc.. It’s amazing how much calmer you’ll feel about your finances when you know you’ve got time scheduled to address anything that you need to. In essence, it’s having time set aside to execute the financial plan that you put in place for yourself.

That’s it – just 5 simple steps to getting started on a life of financial independence! Just one step that you take today can empower you to start moving toward a life of financial freedom and stability so that you can attract more cash and abundance into your life. So what step will you take today?

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Know These 10 Things Before You Negotiate Your Pay

Number TenGuest Post By Katie Donovan of EqualPayNegotiations.com

You have rewritten and proofed your resume and cover letter a million times. You run interview questions and answers throughout the day. You are ready to go get your new job. Or are you? Have you thought about the salary and how you will negotiate it? Here are ten things to know before you complete the next job application. These work for raises as well.

1. You are underpaid if you accept the first salary offered to you. Hiring managers expect negotiations so they keep some money aside specifically for that purpose. This money already has been budgeted. Will you be able to get it or will your manager have the opportunity to use it elsewhere? Next time try before you accept the job offer.

2. It is almost impossible for a woman to ask for too much. Research shows that women continually underestimate the value of their work. It’s also shown that men typically ask for 30% more money than women in salary negotiations. Even when you think you are pricing yourself out by asking for too much, chances are very high that you have not.

3. The market value of the job for men is different than the salary ranges shown on career web sites. The salary ranges consider salaries earned by men and women. The goal is to earn what the guys are making so seeing numbers that are lower does not help us determine the true market value of the job.  This means a little math. Divide the target salary by 0.885 and you will get the salary men earn assuming a 50/50 split of men and women in the industry.  Earn More Girl mobile app will do the calculation for 135 different jobs categories and industries.

4. The financial strength of the company is important. We ladies are an empathetic bunch who wouldn’t want to ask for something that would be hard for our managers to do. Really we think that way even when we know the job should pay more. To help you realize the company can afford to pay you more and to be ready for the inevitable “we can’t afford it” comment in the negotiation, research the company’s financials. Public companies report their finances with the SEC. Non-Profits file 990 forms annually. Government offices have public budgets. Private companies have many hints at their success through the press releases, company meetings, and sales growth. Sales representatives can give great insight on this topic.

5. The company’s future strategies are more important than today’s tactics. Sure you are doing a specific job today but you need to understand how the company will change. Oh, did I forget to tell you that your company would change? If it doesn’t it will most likely die so be ready for change. Ask about the future of the company. Do you have skill sets and experiences that will continue to be an asset with future strategies? Do you have skill sets and experiences that have not been used yet at this company but will be critical with new strategies? Can you learn new skills that will make you more valuable with the company’s future? Make sure management understands how you are ready to grow with the company and welcome the changes.

6. The network you bring to the company can be invaluable. Harvard people are worth so much more than we mere mortals not because of their brains. It’s their connections that truly are above and beyond the norm. You have a network of friends, family, classmates, colleagues, and others who may become clients, employees, partners, vendors, advisors, or investors of your company. Let your company be aware of how you are developing your network and using it with the company’s needs in mind. When possible use specific examples of people you have brought into your company’s world.

7. Awards and accolades you have earned are objective and subjective proof of your abilities. Current and former employers, industry organizations, and educational institutes often give various accolades. Make sure your superiors are aware of all that you have earned. Don’t be shocked if you have to remind your manager of an award granted from him/her. Don’t be shocked if you forget what you earned. Keep an “Atta Girl” file with emails and notes from superiors, clients, and others that praise you for work well done. Even save digital copies of voice mail that praise you. Of course, don’t forget any actual awards. Now the most important part, share this information freely with management.

8. Your contribution to increase revenues is important. If you are not in sales this one may seem hard but the more you can put a dollar figure to your contribution the better you will be able to negotiate. Did you help sales representatives pull information for a new client? Did you come up with a product idea? Did you come up with a new market to target? Do you think of a new advertising channel? Did your introduce a new client to your company? Once you can pinpoint a direct impact on revenue than put a dollar figure on it. It’s amazing how easy it becomes to ask for $10,000 more in salary when you can demonstrate that you impacted $50,000 coming into a company.

9. Your contribution to decrease costs is important. Chances are high that if you do not impact revenue then you probably impact costs. Did you negotiate a better contract with a vendor? Did you develop a shorter production method? Did you improve customer service best practices so that fewer customers need additional assistance? If it saved time, it saved money. If it lowered the number of times people needed to interact, it saved money. If it lowered the amount of inventory needed, it saved money. Again putting a dollar figure on this and sharing with management is the ultimate goal.

10. Your options if you cannot negotiate the salary you want. Too often we feel like we need to take what is given us especially during bad economic times. Understand how well you can survive and thrive elsewhere prior to having a salary discussion with your current manager or a hiring manager. It’s amazing how this knowledge gives you confidence. If you talk to your current manager, the worse that could happen is that you are still employed with the same salary. You may decide that you will begin to look for a new job if you cannot negotiate a better salary but that doesn’t mean you need to say, “I’m quitting.” If you are talking to a hiring manager and are currently employed, again you can stay with your current job at the current salary and continue your job search until the right job at the right salary happens. If you are unemployed and talking with a hiring manager the best alternative is harder to come by. Sometimes, knowing that you are taking a job for the short term to keep a roof over your head is the needed step. Just knowing this can give you the freedom to then continue job searching even after accepting a job offer.

Good luck with your next salary negotiation. You should find it easier if you consider the 10 items above.

Article originally appeared on EqualPayNegotiations.com.

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How to Realign Your Finances in the New Year

It’s everyone’s favorite time of year to talk about resolutions, and one of the biggest ones is typically in the area of money and finance.

But there’s a problem with resolutions from the way that I see it – the energy of the word “resolutions” is just so damn HEAVY.  In fact, I really dislike the word “resolutions” (and I would actually say that I hate it if my 3-year old nephew wouldn’t tell me not to say “hate” because it’s a bad word…Auntie Beth has been humbled a few times on her vocabulary lately by her favorite young men.)

Don’t get me wrong – I fully encourage anyone to make a commitment to learning more about proactive money management and to gain clarity about how they’re using their money on a day-to-day basis, while saving money and getting out of debt.

It’s simply that I prefer to think about new possibilities instead of resolutions. Inspire yourself instead of feeling heavy about making what can sometimes be a scary change if you’ve never learned how to manage your money.  Ask yourself this question – what would life be like IF I knew how to intentionally, authentically, and proactively manage my money?  My guess is that this question will get you thinking in a more positive manner about why you want to improve your financial knowledge (instead of simply feeling like you “should”).

Also, be realistic – I find that people are often looking for a one-trick-does-it-all solution.  I’m here to tell you sadly that it’s not there…sometimes it took you a while to get into the situation you’re in, and so the reality is that it might take you a while to get yourself out of it.

So if you’re looking for a way to begin connecting with and realigning with your finances in a more powerful way, here are 3 steps to help you get started on improving the state of your personal finances:


1)    Assess the level of your financial health – Depending on whether you’re looking to build, protect, or grow your financial assets, you may require a different level of expertise or support.  While the majority of people I meet (i.e. 70% of people living paycheck to paycheck) often need help with learning the systems and structures of an effective money management system so that they can build a stronger financial foundation, sometimes people may need help with protecting what they already have (i.e. insurance, estate planning, etc.) or growing what they have (i.e. financial planning).

If you’re looking to protect or grow what you have, the best bet is to ask colleagues, friends or family members for a referral to a trusted professional.  However, if like most people you’re at the beginning phase (building) of understanding your financial situation, then the next 2 steps will help you to get the information you need.

2)    ASK: Where am I now? – When I’m trying to share with clients and people I meet how they can get started on improving their finances, the first thing I explain is the concept of using a “financial GPS.”  It’s similar to the GPS that we use in our cars, it’s just for finances – and without this you are forever trying to get to a destination that you can’t efficiently get to (remember how the shortest distance between two points is a straight line?)!  When you’re programming a GPS, you need to type in a “point A” – for your finances, this means that you need to understand where you currently stand before you can really make any impactful decisions about how you can get where you want to go.

In order to determine your financial “snapshot” (or point A, if you will), there are 2 main steps to take: 1) understand your Net Worth (Assets minus Liabilities) and 2) understand your monthly cash flow.  For the cash flow, I recommend summarizing at least 3 months of recent cash flow in order to have a solid base of information about your money map (i.e. income and expense details).  (PS – I know that pulling together this information can seem scary sometimes, but take it one small step at a time…and keep breathing, it will be worth it in the end!)

3)    ASK: Where do I want to go?  As you know, the next part of programming a GPS is to set your destination…or point “B,” if you will.  What are your goals (financial and otherwise) in the next year, 5 years, 10 years, or beyond?  Do you want to focus on eliminating debt?  Saving more?  Taking a trip?  Starting a college fund for your child?  Deciding how you want to consciously use your money as a tool to achieve your goals is a really important part of designing a financial plan that works for you and your life.


With these 3 steps, you’ll be able to better understand what I like to call your level of financial alignment.  In other words, are you using money in a way that truly supports what you want in your life? Or, are you doing as many people do and spending unconsciously without thinking about whether you’re spending on things that matter to you (what I like to call being “financially authentic”)?  Being financially aligned and authentic can have a tremendous positive impact on eliminating financial struggle and strengthening your financial foundation as quickly as possible.

In the end, while the steps are simple they will take some time, however I promise that by understanding the “point A” and “point B” of your personal financial GPS that you’ll move more efficiently (in a straight line!) toward your goals.  As I always say, money is a tool that when used powerfully and to your advantage can provide you with more choice and the ability to contribute in a bigger way…is 2014 your big year?

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Money Management Interviews to Start 2014 Off Right

Please enjoy these 2 interviews that I did in November that will help you to learn more about how to live a financially authentic life.  I hope you learn something new to help you start 2014 off on the right financial footing!

The Magic of Life – Blog Talk Radio with Max Ryan (November 13, 2013)

Breaking Free – with Marilyn Shannon (November 25, 2013)


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How to Assess and Improve Your Level of Financial Health

When I first started working as a financial coach, many people would mistake me for a financial advisor or financial planner.  They thought I was someone who would help them learn how to invest their money for retirement.

And while financial advisors and financial planners are dear colleagues of mine and are very talented professionals, my work is very clearly in a different space where I’m helping people with their budgeting and money management skills so that they can focus on getting out of debt and saving money with the hope of building a financial plan to support their goals.

So in order to help people better understand what I did (and what I didn’t do), I created what I like to call “The Financial Health Spectrum™” which includes the 3 phases of Build, Protect, and Grow your financial assets.  These 3 phases simply reflect different levels of financial health, and while none of the phases are “bad” there is an increasing level of financial health as you move from the “Build” phase through to the “Grow” phase.  In helping people to understand what type of financial support they need, I encourage people to take a few minutes to assess where they fall on this spectrum so that they can properly identify which financial expert can help them with their goals and with improving their level of financial health.

In order to help you determine where you might fall on the Financial Health Spectrum™, let me explain each phase a bit further along with the respective professionals that you might want to connect with:

1)    Build phaseThis phase is typically where the 70% of people living paycheck to paycheck who are feeling out of control when it comes to their finances will land.  When building your financial assets, you’ll be looking to do such things as establish a budget (or what I like to call a “savings and spending plan” because budget is such a restrictive word), develop more proactive money management skills, get out of debt, and save more money.  To me, this phase is about improving your financial stability and strengthening and repairing your financial foundation so that in the future you can grow your financial assets. In this phase, you might look to work with someone who can help you increase your income, decrease your expenses, or perhaps do both!  This is the phase where I work with my clients, and some other colleagues who can help you in this phase include CPAs, money mindset coaches (to help you understand if you have money beliefs that are holding you back in some way), and salary negotiation coaches (so that you can maximize your earnings).

2)    Protect phaseThis phase is generally exemplified by wanting to either insure assets (property and casualty insurance, life insurance, health insurance, disability insurance, or long-term care insurance) or planning to have your wishes known about what to do with your assets in case anything happens to you.  Experts in this phase include licensed insurance professionals who can help you determine the right type and amount of insurance that you need and estate planning attorneys who can help you with drafting all necessary legal documents such as wills, trusts, family planning/guardianship paperwork, health care directives and proxies, and also Medicare/Medicaid paperwork.

3)    Grow phaseAt the end of the spectrum, once you’ve strengthened your financial foundation and protected the financial assets that you do have, you’ll also want to think about putting your money to work for you and growing it through investments and other financial vehicles (i.e. annuities, etc.).  The financial professional you’ll want to consider in this phase is a financial advisor or financial planner who will take the time to understand your future financial objectives and design a plan customized just for you to grow your money over time to achieve your goals.

As mentioned before, there is no “right” or “wrong” phase to be in, these phases are simply an opportunity for you to recognize where you’re at right now and determine the next steps that you’d like to take for yourselves to improve your financial health.  I also encourage people to think about moving along the spectrum as a longer-term process since strengthening your financial foundation and building financial independence is often a multi-faceted journey that takes place over time and with attention to progress (and not perfection).  It is also important to note that you may be in more than one phase at the same time (i.e. saving for retirement while looking to more proactively manage your monthly cash flow and put the proper legal paperwork in place).

So if you’re ready to get more information on how you can assess your financial health, make sure to stay tuned for more details coming soon on “The Financial Health Telesummit” coming in January 2014.  It’s a free event that you can attend from the comfort of your home phone, computer, or your favorite listening device (iPod, iPhone, etc.) with some of my favorite colleagues and financial experts who will help you to decide on the next steps to take in improving your financial health!

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