The dreaded B-word has surfaced on my blog! I’d like to have a seriously candid conversation with you about your budget or lack thereof for many of us. The word budget and I have a love/hate relationship. First I took online budget classes. Then I did the entire Dave Ramsey Financial Peace class in person. I’ve read books and listened to podcasts. Next was calling and consulting with friends. I’ve asked my mom for her budget as a guide (numerous time). I’ve done everything I could possibly think about to create a budget, and the reality is none of them have worked.
This week I had a revelation.
As an entrepreneur, my income is not steady. We live invoice to invoice not paycheck to paycheck nor week to week. As a work from home mom, homeschooling two kids and balancing my life against my son’s career, money seemingly flies out of my account. I got an inquiry that was the largest invoice I have sent for my business. It was for a couple of thousand dollars. You could imagine how my brain began sorting this money into various categories for what would be great to buy or pay off right?
For the first time in my life my first thought was how much of this money am I putting in savings?
This was a crazy, “grown-up” moment for me. My first thought was how to save the money coming in as opposed to buying Christmas gifts or even new products for the business. Never the less the business opportunity fell through, but because I didn’t mentally spend all the money and make a bunch of plans I accepted that this opportunity wasn’t for me and thanked God for the revelation of growth he allowed me to see. The money isn’t here but the plans haven’t changed.
So an entrepreneur here is a healthy way to build a relationship with the B-word
Tips for an entrepreneur budget
Accept that you do not have a steady income.
This is super important. When I first started my business full time, I was used to receiving a paycheck at a particular time. When you become the boss, if you don’t work, you don’t get paid.
Open separate business and personal accounts at a credit union.
Banks are for-profit institutions whereas, credit unions are not. Credit Unions put their customers first, offer fewer fees and lower rates. They have better interest rates on loans and will work with you more than a traditional bank. Credit Unions are usually more forgiving if you have a lower credit score as well. The only major disadvantage of the credit union is that they are smaller and may not as accessible as traditional banks, but in this day and age of online shopping how often are you really inside of a bank?
Use a business debit card over a credit card.
The use of a business debit card causes an Entrepreneur to spend with a lot more caution. Debit cards represent REAL money. This is closely related to spending cash over credit. This practice will help you buy only the things you really need in business as opposed to everything you want.
Budget for taxes.
Online programs like QuickBooks will help you calculate your upcoming taxes owed to the state. Please don’t skip this part. I will never forget the year I went to three different tax people because I could not believe I owed the IRS.
Now, this seems pretty straightforward. But seriously, cut costs. I can not tell you how many peanut butter and jelly sandwiches I’ve eaten over the past six years and not just because I really like my honey wheat, strawberry jam, and Jif peanut butter sandwiches. But because there are also times when everything on that sandwich has been non-name brand. Every single penny counts….seriously. I save the pennies too. They add up. Learning to be frugal and a good steward over your money will not only help you succeed in business but in your personal finances as well.
Apps are your friend!
There are a few savings apps floating around out there but my favorite is Digit! Digit links to your bank account and you can set goals. This online bank will pull from your bank account and build your savings at a separate bank. The advantage is you can’t make same day transfers back to your bank account. The disadvantage, you can’t make same day transfers back to your account.
Accept that your budget won’t look average
It has taken me years to fully accept my excel sheet won’t look like my moms. I understand the zero-based budget. I also know my budget is simply a record of my spending that will let me know where I can make wiser choices in the future. Your budget should not punish you, it should motivate and educate you on a monthly basis about your spending habits. You can check out this post and see in more detail how I made the mindset transition here!
Until next time….stay prosperous friends!