Today, I am going to very transparently take you behind the scenes and share how I manage my business finances in less than an hour a month. The purpose of sharing this process is to give you an example of how implementing Profit First can save you a ton of time and energy in ways you might not have realized.
Whenever I chat with women business owners, the thing that always jams them up is time. How long will this take? How much time do I need to dedicate to The Bold Profit Academy? When will I get x, y, or z task done? We’re time-starved or we experience a scarcity of time, and so many service providers are balancing all of the parts of their business from selling to delivering.
What I find is most of their time is spent over-delivering, over-worrying over-stressing, and undercharging, creating feelings of resentment, anger, and burnout that spill into other places especially your personal life. We want to create businesses that allow us to have a level of financial freedom, independence, and personal freedom. We don’t want our business robbing us of our personal freedom or else there’s really no point in having the business.
I listen to women talk all the time and yes, financial freedom is important to them, but a lot of the reasons why they left their job or decided to be a freelancer or decided to grow their business was for their personal freedom. So, it’s hard when that financial pressure starts to really impinge on those personal freedoms. I’m all about maximizing your effort and saving you time without sacrificing revenue or the things that matter most to you.
What I’m sharing today is a set it and forget it system for managing your money during the month. It’s critical like business hygiene, like brushing your teeth, but I don’t completely believe in a set it and forget it when it comes to your personal and business finances so I do want to be careful around how I talk about this.
Before I share with you how I manage my business finances in less than an hour a month, I want to give you some helpful nuance.
I think it’s important to build a deep and intimate relationship with our money. In the beginning, that will require you to pay more attention, to get curious to be brave, and really document by writing down your feelings, fears, and worries about your finances both personally and professionally. We want to be able to get that out of our heads and see it in front of us so we can do something about it. When it lives in our heads, it’s not tangible. It just cycles and it’s very hard to address and really look at and get curious about.
When I was new to managing my own money on my own without my husband, it was when I started my business. This was a huge step for me toward my financial freedom and independence after years of letting my husband manage hour personal finances with little input and direction from me. To be honest. I’m not sure he really cared as long as bills were getting paid. I clearly had a different mindset, and there was nothing good or bad or right or wrong about that mindset, it was just different. But I knew I had to figure out how to navigate my business finances.
There was no way I was letting my husband touch my business finances. This was not going to be good or healthy for us. I’m running a business. I’m in control. I’m in command. I’m the owner of this business. That is my responsibility and I did not want any input from my husband.
I find that when women are allowing their husbands who don’t own businesses into their finances and they don’t understand what business finance means, what it means to take on risk, what it means to be in a high-stakes environment, and what it means to have to invest in your business, things get really tricky and sticky. We are going to be talking about how to have some of these conversations with your partner, with your spouse, but I really do want to give women a bit of caution around allowing their spouses to input into their businesses if they’ve never run a business before. It’s a different way of thinking, it’s a different frame, it’s a different lens.
I hope that you can relate to some of what I’m sharing, and I want to also share that I had a lot of big feelings about managing my money. The first being that, I felt terrible about myself every time I opened up my banking app. Whatever amount of money was in there hardly ever seemed like enough and it was like a thousand daggers piercing my soul every time I peeped the numbers. I did what anyone would do and avoided my bank accounts, and tried not to think about money.
You have to reprogram your defaults when you are a business owner. While most people will avoid uncomfortable things because human psychology wants you to be comfortable, we don’t get that luxury as business owners. Setting any kind of money goal when you’re avoiding your money and not looking at it can be challenging because you feel activated around your money, and this just doesn’t work.
What gets measured gets improved. How would I know what to measure if I didn’t set a goal if I didn’t look at my numbers? So, I did something super uncomfortable and decided to look at my bank accounts every day until I was no longer activated by it. I made it as pleasant as possible by turning it into a ritual that I could enjoy. I committed to being present however I felt in writing it down on paper so it didn’t live in me and I could release that. What I’ve come to know to be true is as long as we continue to make money means something about ourselves, our worthiness in our identity, we struggle to achieve the financial freedom that we desire.
Flash forward 8 years and I’m still looking at my money pretty regularly depending on what my goals or experiments are. I like to experiment with money to see what works and what lessons I can learn. My current experiment, which I revisit frequently, is to keep a spending journal. Where do I spend my money? Does it align with my Thrive List? Am I utilizing what I’m spending my money on? How do I feel when I spend my money on this item? I am in my accounts every day now because I’ve got this experiment going on but it’s great to have a system in place that allows you to get the larger pieces automated so you can actually do the more strategic and intentional experiments with your money. This has to come first.
That’s why I want to share with you how I manage my business finances in less than an hour a month so that I can go do these things and go deeper with my money and set deeper goals and more meaningful goals that impact my financial freedom and my financial independence instead of ignoring my money, which absolutely will not lead you to financial freedom or independence.
The Steps Behind How I Manage My Business Finances
Step 1: Hire a bookkeeper to do your monthly transactions.
Now, in the beginning, I did this myself. I felt like it was important to understand how my money flowed, how it tracked. I absolutely hate this. I rather stick pins in my eyes, but I think it’s important to understand it but then really get a great bookkeeper for a few hours a month and use that time that you’re spending on your money differently. Ask your accountant if they can add that service on or if you need help finding an accountant or bookkeeper to support you, please reach out. I have a number of colleagues who I trust to do this work.
Step 2: Implement Profit First.
When you implement Profit First, you learn how to allocate your money or transfer your money on a regular and consistent basis. And that’s really where some of this time savings comes in. Now, in Profit First, they teach you to transfer your money typically twice a month which has its challenges when you first start to implement Profit First.
Personally, when I would get anxious about money, I would just move it around a lot. That was my way of dealing with my anxiety. Profit First has really helped me navigate any money worry because listen, money worry is taxing. That’s where you’re spending a lot of your time and energy is in this state of worry or anxiety. It helped me navigate my money worry. It actually calmed my nervous system. Now I can make transfers only once a month and this is where I save some time and I’m going to talk a little bit more about this in detail. Think about that mental energy that this one shift has saved me and what it would be like for you to free up the mental load around this as well.
In order to make these allocations even more simple and mentally seamless, we have a monthly allocation calculator in The Bold Profit Academy to take all the math out of making your Profit First allocations and transfers work for you.
Step 3: Put all monthly expenses on a credit card.
I have my recurring payments with most of my contractors on my team who are on retainer to ensure that they’re paid timely and then I pay that credit card in full every month. I know some of you might be gasping who have your issues around credit card use. Many women have fear around using credit cards because they have been demonized, or in the past, you’ve used them maybe not so intentionally. Maybe you have some shame or fear around using credit cards, but when used strategically, it can save you time and maybe even some money.
Putting everything on a credit card and paying it off once a month. Is a huge time-saving. Then I make sure to use a reward-based credit card so I can use the points in other ways. You can use reward points for lots of things like cash back or travel or Amazon purchases. My husband uses this strategy as well for his business expenses and his reward points we put toward travel and then my reward points go to our monthly Amazon purchases. So, for example, this month I didn’t pay anything for school supplies, deodorant, or any other consumables that we used this month.
Step 4: Automated transfers to different accounts.
We also teach this in The Bold Profit Academy that when you pay yourself, that money has a purpose and it gets allocated to different accounts. Maybe a retirement account, maybe a personal savings account, maybe a personal checking account. I have accounts set up for my kids and my pets so that any time my kids need something, ask for something and I say, yes, it comes out of an account that I’ve already put money aside for them. If something happens with a pet and they need to go to the vet, I already have that money saved aside. These are very advanced Profit First strategies, but this is what your future can look like for you when you implement Profit First. Then these things get automated. These transfers get automated. I don’t even think about it. They’re already being put aside.
Step 5: Complete a Bold Money MEMO
MEMO stands for a Month End Money Optimizer, which gets you to reflect on your revenue, on new sales on where you spent your money, on where you saved money, on how you feel about the money that you’ve spent. We get you to reflect on what happened that month. Like, was there a significant event that happened? For me, for the last 2 and a half months, my mom has been in a rehab facility because she had major back surgery. I’m making a note of that to see if that affects my income at all. Does that cause some destabilizing in my income? And then, if it did, what would I do about that so that doesn’t happen again.
This is just another resource we use inside The Bold Profit Academy to help women develop their money management skills and develop a deeper relationship with their finances.
If you’re looking to create a simple system that allows you to manage your money with ease so you can focus on more strategic financial goals, then I want you to join us in The Bold Profit Academy.
There are a number of ways that you can join us. If you’re reading this and you’re like, “Tara, I’m in,” just join us.
If you have questions, reach out. We can talk about whatever questions or hesitations you have in joining The Bold Profit Academy because I am very committed to hands-on helping a thousand women through this program. Hands-on helping means that I am in the program. I hold coaching calls. I am commenting on people’s posts inside are of our community. The trainings that we have in the library have been created by and delivered by me. I want to roll up my sleeves and I want to get to know you and I want to get into your business with you. That is what I do best. And that is what we are doing in The Bold Profit Academy.
Think about what you want to accomplish with your money in the next 3 months to set you up for a breakthrough in 2022 because January is upon us and how we spend our time now really matters. Whether you need to clear some debt, set some goals, save time, or all 3, this is how we can support you in The Bold Profit Academy to take you from fearful around money to a financial powerhouse.