Tag Archives | Money management

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

By on June 12, 2014 in Entrepreneurship, Financial Stability

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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Clearing Financial Clutter to Increase Your Financial Flow

By on May 1, 2014 in Financial Clutter

As I tell my clients regularly, developing a solid savings and spending plan (a financial plan, if you will) is only a part of the puzzle when learning how to proactively manage your finances and live more abundantly.

If you think about it, the financial plan is the scientific part. It’s the part where we look at your net worth and how you’re using your cash flow each month, and we get to redesign how you’re using it to align with what matters to you and what your goals are. This is the skill we know and love as proactive money management.

But there is also an energetic piece of the equation and that’s how does money move in your life? In a nutshell, what is the energetic flow of money in and out of your life? As I’ve said before, money is a divine tool to be used to support you in your life, however in order to attract abundance it needs to flow and not be “stuck” anywhere.

Which is why financial clutter can be such a challenging issue when it comes to wanting to attract abundance into your life. Financial clutter stops the energy flow of money in your life and ends up leaving no space for abundance to land. It can keep you from having a true sense of financial freedom and financial independence if the energy of financial clutter is in some way holding you back (and sometimes you don’t even know it).

While there are many examples of clutter, I tend to find that there are 5 main ways that financial clutter shows up in our lives:

  1. Bills & Receipts Clutter – We’ve all had those moments where we’ve got a stack of financial paperwork (bills, receipts, etc.) piled up on our desks, right? While it’s energetically fine to have a short stack with the intention of filing it away later, there comes a point where the energy of the pile starts to take over your space. You know the point I’m talking about….where the pile looks like it’s going to fall over on its own it’s so big? That’s the point where having a filing system for bills and receipts is helpful. I’m a big fan of 12-section accordion-style organizers (one section for each month of the year) that you can buy at your local supply store (Staples, Office Max, etc.) and having one to file away the monthly bills that you’ve paid and another to store your receipts. At the end of each year, you can clean out the organizers and file anything that you need to keep more permanently into a folder and filing cabinet (or other storage container).
  2. “Ugly Wallet Syndrome” – Does your wallet look like it was run over by a car, chewed up by your dog or run through the washing machine one too many times? Or is your wallet decent looking but it’s jammed with so many receipts and cards that you can barely close it? “How you do money is how you do anything” is one of my favorite quotes. So how are you “doing” money when it comes to what your wallet looks like? If your wallet is worn down and shabby looking or if it’s packed to the gills, are you truly demonstrating respect for the money in your life? The good news is that Ugly Wallet Syndrome is easily cured – simply clean out what you don’t really need from your wallet (receipts, things you don’t use) and if you’ve been needing a wallet upgrade for a while now invest in a new one for yourself (and it doesn’t need to be expensive either…there are plenty of nice inexpensive wallets available at local department stores).
  3. Loose Money and/or Unused Gift Cards – It always amazes me how when we really stop to think about it how many places there are where we just leave money lying around disregarded. Whether its loose change in your car or on your kitchen counter or dollar bills floating around your purse or in your pants pockets, this disorganization can demonstrate a lack of respect for money. So let’s treat our money like we love it (because we do, right?) – go on a “money hunt” in your house, your car, and wherever else is appropriate and round it all up. And make sure to include any unused gift cards you find too (check your drawers) as this counts as financial abundance as well!
  4. Lack of financial automation and routine – Many people that I talk with often indicate that they don’t have any type of financial system or process in place for how they use their money. This can include everything from not having payments automatically scheduled (whether via EFT or by using your bank’s systems) to not having a regular time each week to connect with your finances and make sure all of the bills are paid and financial matters are handled (a “money date” if you will). Without these types of streamlined routines and processes in place, managing your money can feel like a stressful and chaotic “up and down” experience where you feel like you’re always having to hustle to figure things out, instead of a more methodical and thought out process. If you don’t have payments automated, take a moment or two to sit down and think about which payments could be scheduled in advance. And if you don’t yet have a weekly money date scheduled, pick a time of the week that will consistently be a good time for you to sit down and pay the bills, transfer money, and even follow up on any unusual charges (i.e. credit card statements, monthly bills higher than usual, etc.)
  5. Unacknowledged money that you owe to others or that others owe to you – Energetically, this type of clutter tends to be pretty heavy from what I’ve seen. If you owe money to others or others owe money to you and there isn’t some type of acknowledgement of that, resentment can build (on either side of the situation). Acknowledgment can mean something as simple as a verbal commitment to pay someone back by a specific point in time, to an actual payment plan for paying someone back, to an actual legal document signed by both parties. Additionally, sometimes this category can include unpaid taxes (you owe the government and/or you haven’t filed your tax returns on a timely basis) and any rebates you haven’t filed for money owed to you (i.e. equipment purchases, fitness rebates from your health insurance, etc.). While it may be hard to acknowledge what you owe to others or follow up to ask others about money they owe to you, it is important to do it so that you can stand fully in your financial power.

So, do any of these types of financial clutter show up for you in your life?

For the most part, we all tend to have one primary area where financial clutter always shows up. For me when financial clutter creeps in from time to time (I’m being honest here!), it tends to be with either bills and receipts or loose money (usually in the consoles of my car).

It’s best to take care of your financial clutter as soon as you identify it, however with the active lives we lead these days sometimes I recognize that this isn’t always possible. Sometimes it’s best to break it down into smaller tasks over a period of weeks, however I do recommend that once you’ve identified where the financial clutter is in your life that you do your best to clear it within a month. Otherwise, you’re consciously aware of the clutter and the challenging energy may intensify since you no longer have the excuse of not understanding what financial clutter is and its impact (ignorance was bliss before, right?).

If you have financial clutter in your life, do yourself the favor of cleaning it up as soon as possible to allow the money to flow cleanly into and out of your life so you can attract all of the abundance that you so rightly deserve.

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Why Celebrations are Important

By on February 6, 2014 in Financial Celebration

PIC_Feb 6th_ARTICLE_Celebration pic with DanaOK, so you might be thinking to yourself – Beth, we just wrapped up the holiday season full of celebrations, and you want us to celebrate AGAIN?

Yup, I do. Celebrating is a lost art form as far as I’m concerned, and to be quite honest I’ve personally had to train myself to do it more often to acknowledge not only the big things but also the little things too!  Yes, I’m a “celebrator-in-training” just like many of you might be.

As I’ve found over the last few years (and more specifically over the last 6 months if I’m being honest), like attracts like which means success attracts more success and celebration attracts more celebration.  In other words, the more you acknowledge something great, the more the Universe will say “oh, he/she gets excited about that – we like excitement – let’s give him/her more of that!”  (Yes, I’m going a bit spiritual here with some “Law of Attraction”…so bear with me if that’s not usually your “thing,” ok?)  Celebrating raises the positive vibrations surrounding you and encourages more of the same positive results to be delivered to you.

As an example in my own life (since I always find it helpful if someone shows me how to do something new that I’m trying to learn), I’m thrilled that January 2014 was the best month EVER in my business and that I found 6 brand new and amazing clients to work with in the months to come!  I started my celebration this past weekend with some much needed “down time” to relax and really let everything that had happened this month sink in and then I celebrated with friends and family (see the pic of me having a celebratory cocktail with a good colleague last week in the picture!).  I also played hooky earlier this week to sneak off and see a movie by myself during a snowy day when I didn’t feel like working.  And this is just the beginning of my celebrations – I really want to anchor what this last month felt like, because I want more of that type of amazingness (so that’s probably not a word but who cares, I’m excited!)!

As it relates specifically to your finances, sometimes the road to financial freedom and financial independence can feel long.  Truth be told, that road is paved with small steps taken over time to build up your financial skill set and financial health – proactive money management skills and a well thought out financial plan doesn’t just come together overnight!  On your lengthy financial journey, there are likely some things that you can celebrate and acknowledge for yourself, so let me get you started with a few ideas:

  • You opened your latest statements for the first time in a long time (bank, credit card, etc.);
  • You reconciled your checking account;
  • You listed out all of the debt that you owe with corresponding details (interest rate, due date, min. payment);
  • You put together a Net Worth Summary (Assets – Liabilities);
  • You looked at one month’s worth of cash flow (income and expenses) to get a better understanding of how you use your money;
  • You got a raise at work;
  • You started a savings account;
  • You saved up for something in advance and paid for it outright;
  • You paid down (or paid off) a piece of debt;
  • You had a money conversation with someone important to you (spouse, friend, co-worker, etc.);
  • You reached out to a financial professional for help with something (taxes, investments, insurance, etc.).

The ideas above may not feel like much (and clearly there are many more examples that I could include), however I’d like to encourage you to see each step on your journey to financial freedom as something worth celebrating.  And, of course, I believe in celebrating in moderation or within appropriate parameters given your individual circumstances!  Sometimes the best celebrations don’t need to cost much (like the movie I snuck off to see) or they don’t cost anything (like the dream car I’m going to go and test drive this weekend just because I can…it’s free, at least for now!).

And lastly, when you’re wanting to truly acknowledge and anchor successes in your life (in any area, really), I’m also a big fan of having a “success journal.” What is that, you ask?  It’s a chance for you to write down each of the successes (big and small) that you have along the way because sometimes we forget our successes and we need to go back and read them to be reminded of the good that we’ve done!  I keep a success journal by my bedside and each night before I go to sleep I list my top 5 successes of that day (financial and other).

So what have you done recently to improve your financial health that you would like to celebrate?  And if you haven’t done anything lately, is there something small that you can do to get yourself started and in action?

Start small, take action, celebrate and document your success along the way…and then rinse and repeat!

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How to Realign Your Finances in the New Year

By on January 8, 2014 in Financial Alignment, Money Management

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

By on December 26, 2013 in Financial Foundation, Money Management

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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