Kristin Pruis • April 20, 2020
This month’s theme of finance has me feeling a little worn, ya’ll. Don’t get me wrong—I’m super passionate about money and I do run a successful business—but as you know, I’m not exactly a money expert. One thing I do know is that being successful with money requires winning money habits.
That’s why this week, I turned to my Facebook group to help write this post. I asked my group of over 1000 female entrepreneurs what it takes to be successful with your money and set good money habits. Here’s what we came up with, together.
Master Your Budget
Some people avoid budgeting like the plague. I’ll be honest and say that, I’ve been one of those people. But if you don’t take the time to create a budget you are going to be in a world of hurt a few months down the road in your business. Every business is different and there’s no standard formula for budgeting. But you do need to always be mindful of two things: the money coming in and the money going out. Obviously, if you’ve got more money going out than coming in, you have a problem. A simple pen and paper or spreadsheet can do a world of wonders for helping you set up a proper budget.
Track Your Expenses
Tracking your expenses goes hand in hand with planning and budgeting. When you track your expenses you are reconciling what you actually spent money on with what you planned to spend money on. Did you spend too much on coffee this month and not enough on marketing? Organizing your expenses into broad categories can help you see where you might need to shore up your spending and other areas that may need some attention.
Avoid Impulse Purchases
I’ll be the first to raise my hand and say I’m guilty of this one. When you see that shiny new software that someone else is using online that promises to change your life, you just got to have it, right? Wrong. Keep your expenses in check by avoiding impulses purchases in your business. One thing that really helps me with this in my business is reviewing my yearly goals every quarter. If a purchase isn’t in line with one of my goals, then it’s best to save that purchase for another time or move on altogether. Or if you’ve really got your eye on something to purchase, why not sleep on it and wait 24 hours before deciding to buy to see if you still feel the same way after giving yourself some time to think.
Are you saving money in your business? Or do you spend your cash immediately as it comes in? There are many reasons to save up funds in your business including saving up for larger expenses (like a gorgeous custom website) so you don’t have to purchase on credit. Saving can also create a safety net for you in uncertain times, help you set aside money for taxes, and even give you the means to reinvest into your business. If you don’t have a business savings account, now’s a good time to consider setting one up!
You can be a successful business without giving back – it’s true. But is that the kind of business owner you want to be? Not every business may have the means to donate or give back, especially as you are still becoming more established, but once you have firm roots set in the ground, you may want to consider what you can do to help others. I’m not saying you have to donate thousands to charity or give away all of your profit to be a good business owner, but there are plenty of ways to positively impact others with your business. Consider offering discounts as a service-based business to your local community or providing a 1-1 donation if you are a product-based business (think Tom shoes). Of course, these are just examples and you can think up a cause that is near and dear to your own heart and what makes the most sense for your business.
When you hit a big milestone in your business, do you immediately move on or do you take the time to celebrate yourself a little bit? To many, rewarding yourself for a job well done can seem silly or indulgent but that couldn’t be further from the truth. Only you can decide how big or small of a reward is appropriate, but taking the time to acknowledge your achievements is going to actually encourage even more growth and success in your business. It’s the classic conditioning principle at play here and not only does it work, but it feels pretty good to be recognized for your work, even if you are the only one giving the accolades. Don’t blow the bank on this one though, and make sure to set aside a slice of your spending budget for these incentives.
What money habits are you struggling most with in your business? Let me know in the comments!