8 money habits that make all the difference to your bottom line
When we improve our financial situations, we unlock new choices. Choices about how we grow our businesses. Choices about how we spend our time, look after our loved ones and prepare for the future. Of course you want to make enough money in your business to reach your goals and live out your ambitions, creating financial security so you can enjoy the highs and have a backup for the lows.
But how do you make more money? Bump up your prices? Discount your products like crazy to get an influx of sales?
I wouldn’t suggest doing anything that drastic. It can be overwhelming, especially with how emotional money is (Check out my blog ‘how to say I love money and mean it’). We want what we can’t have (which is why budgeting is so hard) and struggle to imagine having what we don’t have (which is why ambitious goals can be hard to follow through with unless you break them down).
What I’m going to suggest is gradually implementing money habits that shape how you interact with money. The more you notice, the more you can make intentional choices about money from what you charge to what you spend. Here are a few money habits to get you thinking.
8 Money habits that put you in charge of your financial situation
A warning about habits. They are the most difficult to stick to and the least likely to produce tangible results at the beginning, especially if you're neurodivergent (in my ADHD world it is anyway!). So commit to the habit for a set time period, let go of the outcome for that period and then at the end evaluate whether you found it helpful or not. Fliting from strategy to strategy is almost guaranteed to keep you in the same place. Consistency over time will move you forward. I find calling it an "experiment" tends to please my ADHD brain and help me stick to it, love a challenge!
1. Track your incomings and outgoings
A great place to start when taking ownership of your finances is to get a clear picture of your current situation. I can almost hear you groaning! I know it sounds boring and if you’re not where you want to be in business, like pouring salt in the wound. When I didn’t have a lot of sales in my business, the last thing I wanted to do was look at the numbers.
But getting in the habit of tracking your finances can lead to pleasant surprises. I have moments when I realise I’m doing better than I think I am! There are plenty of apps and tools that can track your business revenue, expenses and what you’re spending in your personal life. Or keep it simple and use a spreadsheet. Whatever works for you.
2. Monitor your time
Alongside tracking your money, track your time. How many hours do you spend on the business each day, week and month and on what? Record how much time you spend on individual work projects and the tasks involved in running the business. Money tracking and time tracking alongside each other is really enlightening.
You might realise that you’ve been horrendously underpaying yourself considering the hours you put into the business and decide to change how much you take out of the business each month to pay yourself. You might realise that projects are taking longer than you thought so it’s about time you increase your prices. Or you might confirm your pricing and salary are exactly where you want them to be, giving you confidence moving forward.
3. Journal about charging and spending money
Now you have the number tracking going, consider noting down how you feel about each money interaction you make for a month or so. What’s going on in your subconscious mind impacts the actions you take in your business and your life so it’s well worth having a look.
You might find that you’re spending money on things out of fear of missing out only to realise you don’t have enough left over for what you actually want to buy. You might find that you feel frustrated by the amount you charge clients because you know you are worth more. That could have a ripple effect on your marketing and sales because you feel demotivated by being undervalued. Approach this with curiosity. It’s an information gathering exercise.
Here are some journal prompts that can help you explore the money decisions you’ve made.
What was the best piece of advice about money that you ignored?
What was the worst piece of advice about money that you've taken?
How have these experiences influenced how you view money?
4. Pick your 3 money pots
You’re allowed to spend money! You've worked hard for it so you deserve to spend money on what you want. That’s the key - spending money on what you want, not what you think you should spend money on. Think about the 3 main things you want to spend your money on. Things you’ll find fulfilling and motivating.
For example, going to coffee shops with friends, buying crochet supplies and getting your hair done (can you guess what mine are!) Socialising is important to your wellbeing and so is a hobby that’s not staring at a screen. Your hair is what makes you feel like you and more confident showing up. That’s money well spent. Focus the majority of your spending there and you’ll end up with less regret and fewer things you don’t actually need. This could also apply to how you spend money in your business. What are the top things you want to outsource or buy software for?
5. Play higher or lower with yourself
Pricing your products and services is hard. Of course, there’s the upfront cost of supplies to cover but what price do you put on your time and expertise? It’s a minefield. What I do know is that if you don’t believe in your pricing, it makes selling harder than it needs to be. Resistance comes up when ‘daring to charge so much’. So before deciding on a price, try playing higher or lower with yourself.
State the highest possible price you could imagine someone charging for the product or services and see how that feels. If it brings up a lot of tension and discomfort, go lower. If it feels super comfortable, try going higher. Do this higher and lower game until you find a sweet spot between feeling comfortable and feeling challenged.
6. Pay yourself first
When your business revenue doesn’t feel super stable, it can be tempting to hoard all your money in your business account and take as little as possible for personal spending. I get that, but the problem is you give yourself little reward. You’re putting all this hard work into running your business and not experiencing the payoff which can be de-motivating.
See if using percentages helps you to find a sensible balance between saving and spending. Allocate a percentage of each sale to different pots that cover business expenses, tax, profit (basically business savings) and your salary. For example, 25% for expenses, 20% for tax, 5% for profit and 50% for salary. That means you’re distributing your income fairly and you get to experience the joy of high income months without feeling reckless. I first heard about it as the Profit First model.
7. Automate what you can
Life is busy and finances are boring. Let’s be honest with ourselves! So if you can have processes rolling on autopilot, reducing the number of times you have to jump through the security hoops of logging into online banking, do it. Usually, accounting software allows you to distribute income into different pots and automate payments.
8. Visualise your end goal
Get your journal out again because it’s time to write your success story! When your goals are a lot bigger than what you’re currently earning, doubt can creep in, making goals harder to achieve. I find it helpful to visualise what my life will be like once I’ve achieved my goals to shift into that place of belief and determination to make it happen. I regularly write visualisations in my journal, detailing what it feels like and what I’m grateful for to make the visualisations really vivid and believable.
Money Matters as a Small Business Owner
When you’re building your own business, money matters. How you make it, how you spend it and how you feel about it can be a bit up in the air. By taking the time to raise your awareness of your money matters, you put yourself back in the driving seat of your financial life as you can make intentional decisions about how you handle money. That’s not only empowering but it sets you up for success as you continue to grow the business and become even more financially successful.
That’s what we’re doing in the Find Your Vibe Business Club in May. We’re using daily journal prompts to privately find out more about our money mindsets and how they’re influencing our financial situations, exploring further in the guided workshops, and sharing realisations and questions in the private Facebook group. Money Matters is just one of the membership’s monthly topics to help you understand yourself better as a person and business owner so you can find your vibe and make your business thrive!
What could you discover as a Find Your Vibe Business Club member?
