I am so pumped for this podcast episode. This is going to be the crowning jewel of my career as a podcaster. I’m talking about, legitimately, my favorite damn topic in the world. We are talking about saving money. The only thing that I love more than making money is saving money.
I’ve got some thoughts for you. This is an episode that has an assignment. You need to do the assignment. I call them experiments in The Bold Profit Academy. This is going to be an experiment that you need to do. You need to report to me @thetaranewman on Instagram. You don’t have to post your stuff on Instagram but you need to come and DM me on Instagram and you can leave me a voice note, whatever you want. I’m over there manning my DMs.
There’s an action that needs to be taken because we are going to give you some money back in your pocket because we are going to find money leaks before the new year. You know that weird ass time between Christmas and New Year’s and you’re like, “I don’t know what day it is. I don’t know what year it is. I don’t know what I’m supposed to do with myself. I think I’m just supposed to sit here and watch Netflix all day,” you are, by the way, but I also want to like noodle on some things and I’m reflecting this is the thing you do.
We’re going to find some money leaks.
What is a money leak?
Money is going out in small places that you might not realize and it’s adding up into a nice pocket full of dollars. It’s often that you’re spending money on things you don’t use, you don’t utilize enough, or had value to you at one point but no longer holds value but might be valuable to somebody else.
Now, the way I found money leaks and the way I’ve created this, you can do this in your personal life but today, we are talking about it specifically for business. The reason why I love this and how I found this was during our five years of starting a new business back in 2005 and it was the worst financial time of our lives and it ultimately resulted in us going bankrupt in 2010.
This is how I figured this out. Really what it does is highlight one of my strengths. On StrengthsFinder, I’m a maximizer. Being good with money and being good in business actually requires you to be a maximizer. It requires you to be a valueist, to truly want to get the value out of something that you want to get all the juice out of the orange. That is called utilization. We want to be utilizing our money for maximum return.
Saving money gets shamed and shit on a lot, especially by people who income-market, preach abundance before personal needs and responsibility. I don’t know if you’ve ever realized that but if you look at Maslow’s Hierarchy of Needs and you have basic needs on the bottom and you have self-actualization on the top and there are all these other needs in between that are important, marketers are marketing you self-actualization without any consideration or concern about the other needs being met on the way.
When we preach abundance, we are preaching self-actualization without giving you practical skills to help you take care of your personal financial needs, your emotional needs, your physical needs, and your mental needs before these aspirational needs come. This is really, really dangerous because what’s happening is we’re seeing a lot of manifesting wealth and abundance mindset without any practical actions that actually put money in your bank account.
Feeling good about your money comes when you take action to make a change and build a deeper, more intimate, and purposeful relationship with your money, not when you recite a handful of mantras over and over again. Trust me, I have tried. I have bought the course. I have. When you take the time, care, and effort to build an intentional and discerning relationship with your money, that is when you attract more.
It starts here. Plugging those money leaks by being intentional and thoughtful about how you spend money.
I have always made excellent money in my career. I haven’t always made excellent money in my household because we did have five years of financial hell that started with us cutting out two thirds of our income for my husband to go and start this business.
We were broke. If you hadn’t heard the story, we were selling everything we owned once a month in a garage sale. We would just pull all of our stuff out of the house and put it on the driveway and just sell it. It got to the point where I was so detached from material things that I would start bringing people, strangers into my house and being like, “Just look around, if you want it, tell me you want it and you can have it.” There was almost nothing that wasn’t for sale at one point. We were repurposing that money to buy groceries.
I’ve had these moments in my life where I was not affluent even though my salary at the time was great, it was all going to child care, we know how that goes and my husband wasn’t making so much money. We had these times in our life that created this disruption, but for the most part, I’ve been someone who’s made excellent money but I don’t have a multiple seven-figure or eight-figure business, and you know what, I don’t want one. I’m still a high net-worth individual.
I’m still building wealth. I’m still going to retire with millions and millions of dollars way earlier than I even expected. I did it by making smart choices, taking small steps, prioritizing what I need to thrive through my thrive list episode, and being a good steward of my money, which I learned to do through the financial hardships that I had. If you’re someone who’s like, “My financial hardship set me back,” think about how your financial hardship could be setting you forward, that can be helping you move forward.
How do I find my money leaks?
Any time that I want to go and make an investment in something, I do this exercise as well, and you’ll see why. This is a tool that you can use over and over and over again. I’m so serious about this. It’s actually an SOP. It’s a standard operating procedure that I use in my business and it’s in The Bold Profit Academy.
To do this, you’re going to want to download what I call my Tools and Systems SOP. This is really going to help you get started. You need to check a few things in order to complete this experiment:
- The Tools and Systems SOP
- All your business credit card statements
- Business bank account statement
Step 1 to Finding Your Money Leaks
First, off the top of your head, you’re going to list out all the tools and systems you use in your business.
Think about your dues, subscriptions, memberships, and recurring payments, that’s really what we want to get here. List them all out, then find out how much they cost. That’s where you’re going to have to probably either go into your email, look at invoices, log into the tool itself, or check through your credit card statements and your bank statements.
Then you’re going to go through your use of each tool.
- Are you actually using it or did you forget you signed up for it?
- Did you find something better and forgot to cancel?
- Do you pay it annually and so it’s not on your mind?
- Look at what is annual and what is monthly. I
- Where is redundancy in your tools and systems?
- Are you using something that has multiple functionalities?
For example, personally, I like Typeform. I think Typeform is a solid, solid tool. I think it’s got a sexy interface. I think it’s easy to use. I think it looks real pretty. But we also use Monday.com as our project management tool, and you can do forms inside of Monday. You know what, Typeform gets canceled. That’s a redundancy.
Are the Monday forms as pretty as Typeform? No. Does it get the job done? Absolutely. So Typeform got cut. I think it was $200 annually that I was paying for it. Now you might be like, “Oh, Tara, it’s $200,” yeah, but that stuff adds up. It’s not about the amount of money. It’s what could you be doing with that money that’s a better use to grow your business and how does your money feel, how does the energy with your money feel when you’re that purposeful with your dollars?
Step 2 to Finding Your Money Leaks
Next, look at the version of the system or the tool that you have. Are you using all the features of that version or can you scale it down or even use a free version?
When I did this, I went through and I’m like, “Okay we pay for Slack.” I think our Slack charge is under $700 for the year. Is that a huge amount of money? No. But Slack has a free option. What’s the difference between paying for Slack and using the free option? Here are the differences. Are we using these? No, we’re not. Okay now, how do we implement the full functionality of what we’re paying for or decide that we’re going to use the free version?
Slack actually has a tremendous amount of cool features that nobody knows about because they use it as a communication tool. If you’re just using Slack as a communication tool, you could probably use the free version and get away with it. But Slack is really an integration hub and it can integrate a lot of things. For my ADHD, it’s been really good to go and fully utilize Slack as it’s meant to be utilized.
How do you feel when you use this tool? Confident? Like your business is thriving? Or does the complicated tech make your head spin and erode your confidence?
Do you need a lot of tech support to help you use the tools in your business?
Personally, I’m a big believer in being able to use the tools in your business in case anyone leaves, or you need to train someone new, or you decide you don’t want to have all these payments going out for stuff that maybe you could just do yourself if you had a little bit more knowledge. I know that’s an unpopular opinion in a world that says outsource all the things, do nothing, work less, work the minimum amount of time, but sometimes, it’s worth it. I’ll give you an example of where I see this and where I’ve seen this come up over the years with business owners.
Something like an Infusionsoft or an Ontraport. Those are really expensive tools to run in your business. They are very complicated. I think Infusionsoft’s nickname used to be Confusionsoft. What I would see is these early-stage business owners buy Infusionsoft or Ontraport because some web celeb had an affiliate link. But they were not at the point in their business where they needed that level of a tool or could handle the confusion or the tech difficulties that came with it. ActiveCampaign is a great tool and it’s far, far, far cheaper to use ActiveCampaign than something like that. You might even feel more confident using an ActiveCampaign than an Infusionsoft or an Ontraport.
Set a goal to reduce your tools and systems costs by 10% to 20%.
Can you do that? What would you have to eliminate?
I’m not saying you have to do it. I want you to set the goal, I want you to consider it, I want you to lean into the discomfort of cutting 20% from your tools and systems and your memberships and your recurring expenses like that. Then you have to go cancel the things and you have to decide to opt-out. But here’s the thing, we’re not doing this from a place of scarcity. This is where people get so twisted. They think saving money or cutting expenses is from a place of scarcity. No. It’s from a place of service. It’s from a place of “how do you want to repurpose the money you just saved?”
I want you to think about that if you cut 10% to 20%, how do you want to repurpose the money you just saved?
Do you want to increase your pay? Do you want to join a program? Perhaps The Bold Profit Academy? Do you want to give your executive assistant some more hours, so you have more support in that way in the business? How do you want to repurpose that money?