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Full Transcription:

Welcome back friends. If one of your goals in your business is to create and save money, well, this episode is for you. My friend Connie is here today to share her simple steps, structures, and discipline to money. And she’s got a system that you can use to help organize your money and give your money a job. If you’re wondering what that could possibly be, grab your drink of choice and let’s dive in.

Hello, Connie. Welcome to the show.

Hi, thanks for having me. I’m excited.

You’re here. Yes. Right. We’re going to talk about something that I think all of us want more of and that’s money, right? That’s right. And you’re here to share like the simple steps and the structure and discipline to create and save money, which I know all of us want. Right. But before we dive into all of that, Connie, tell us about your business and why do you do it?

Yeah, well, I have a very long background in accounting. I’ve done a lot of different things, but it’s about 35 years total. And, but 19 years ago, I, I jumped into my own business and had a bookkeeping business and, um, it was working great until I went to grow. And that’s where, that’s where my journey actually started, which is what I do today, uh, was that I did, I grew an accounting professional grew without any type of plan. There was no budget. There was no business plan and I wasn’t paying attention to my own numbers and money. And so I found myself at a place where I was 50,000 in debt, and hadn’t really paid myself for six years. Now that story is not unique to businesses, to small businesses, but it really shined a light that even accounting professionals, people that work in their numbers every day can have these problems.

And so what I realized is that we need to have more conversations around money that business owners needed some space to not only create the budgets, but also have conversations about how to implement and how to make their budgets more easier to maneuver, especially during COVID, you know, that was a big wrench thrown in our face. And we had like, whoops, sorry, quickly maneuver on what to do. And so I, a lot of my time now one-on-one conversations with business owners on how money and numbers supports their business and their growth, and also making sure that they pay themselves first and that they’re saving for taxes and that they are really being more intentional about how they’re using that resource.

That’s really interesting that you said a lot of entrepreneurs probably don’t pay attention to their numbers and I’m probably one of them, you know, without even realizing it. I think a lot of us like, okay, we’re making an income, we’re selling our products and services. We’re getting paid, it’s getting put into our checking and we might just be tracking it. And at the end of the month, we might just look at what we make, but there’s probably more to that. So you kind of, you have a system, right? Can you tell us, and it’s a system to like organize money. Can you give us more insight to that?

Yeah. So it’s it Biles down into three pillars, but each pillar has a little bit different area. And so, but it’s really customized. So if you’re first, we have to know our numbers. So, and that doesn’t mean you have to go get a specific accounting tool or anything. You can use a spreadsheet. I’ve worked with an entrepreneur. That’s used spreadsheets for years. All right. If you’re just starting out paper, pen and paper will work too. It’s just the more busier you get your business, the more, the more successful you’re getting, you may want to automate some things. So an accounting tool is really helpful for that. Um, because the one thing that will happen is getting lost in the details of data entry will be the last thing you’ll want to do. And so how can you make that more easier? Uh, and accounting tool is great, but we got to know the numbers.

So being up to date with them, not waiting until the end of the year to updating them, um, have not even maybe waiting till the end of the month. A lot of bookkeepers, uh, businesses will hire bookkeepers. Bookkeepers will come in and only update once a month. That’s a little, that’s still a little too long. So how can you create some metrics in there so that you know, what your numbers are? And it isn’t just what the top line number is. It really is how that top line is coming in and how you’re intentionally using it. So once you know your numbers, you can see them in black and white, they’re really clear. Um, and you might need a little education on what that means. You know, looking at them. Then we intentionally use our resources. So intentionally planning, um, AKA the budget. I like to call it a financial plan.

Um, then we can see how, what we want to do. And a lot of times when people create this financial plan, the reason it doesn’t work is they create it for a whole year and then they stick it in a drawer and never look at it again. The other thing is we learned in school that numbers are so black and white there’s right or wrong way of doing it. And so then we don’t want to look at it because we know that we didn’t hit any of the numbers. And so we, it’s not a tool that we use. So let me give everyone permission to say that their financial plan is a living, breathing document. It’s something that ebbs and flows with what’s going on. And we, we share, it might be something we might want to stick to for a quarter or three months.

Um, but we can always, it can always change because you never know what opportunities are, are waiting for you to open the door and have more income come in. And that’s really what a financial plan is. It’s like establishing what our expenses are. And again, knowing what your numbers are. So note, so knowing how much bare minimum expenses you might need for your household or for the business or both. Um, and then you can just, as that terrific entrepreneur spirit in us go create whatever you want in that space. So that’s where we then play with the numbers on the top line. What can we create? What can we sell? What other opportunities can we bring in? Do we need additional funding, that type of thing, but we have to be pensionable how we, how we use our numbers. So we create that plan. And then the third step is a cash handling system. It’s, it’s more of a relationship with money. So how has your relationship Alison with money?

I, you know what to be really honest with you, I think it’s really just non-existent, you know, you said something key in the beginning, like make sure you pay yourself and that’s definitely not something I do. So can you elaborate on, I know we’re kind of getting off on a tangent here, but when you say pay yourself, like in reality, give us some examples. Like, what does that really look like? Because to me, when I see income coming in based on my services, and then, you know, it gets transferred to a bank account. What do you mean by pay yourself? I

Guess? Yeah. Yeah, no, that’s perfectly when we’re so, um, a solopreneur, uh, like I was, for many years of my business, basically, whatever came in was ours. There’s very, especially when you work from home, there’s very little overhead. So most all of that will flow directly to your personal, uh, finances. Um, the first step is to have your business set up like a business though. So a lot of us are still at that early stage may be co-mingling funds. If you can set up a business account and let all the business stuff flow through it, and then physically write yourself a check or physically transfer money to your personal account, a that’s paying yourself. So you have to intentionally know and in claim it, what does your household, what does your personal life need for the business to contribute? Most of the time, what I see, um, I had, uh, an entrepreneur I worked with, uh, that pulled money out an ATM almost every day.

So the business never really understood what he needed. Plus he was pulling from an ATM that was convenient and racking up bank charges every day that he would pull money out so that wasn’t intentionally using his money very well. But when we can really claim and tell the business, I need you to contribute 5,000 or 3000 or $2,000 to my household. Then we can figure out a way to do that. When at the first, when I first did this, the business was leaking money in 98% of what was coming in was already spent on rent and team members and everything. And so I had to like weekly, make little transfers to myself. And until I could build up that confidence that there was money there to pay me. So that might need to happen. Um, the other thing is energy. It’s about energy, about the business supporting you.

I was paying my personal credit card from the business and a lot of business owners will do that. And they’re like, oh, they’re my business. Isn’t supporting me. They’re not, it’s, it’s a loss. And so when my coach made me actually write myself a check, put it in my personal account and then pay the personal credit card. A lot of things shifted. You could actually see how all this work you were doing in your business was contributing to your lifestyle. So it’s an energy thing, but you got to be honest. You got to know your number and be intentional, how you want it, create that financial plan so that you can create a cash handling system around how to pay yourself. And a lot of the times it might be, it could be really easy. Every dollar that comes in you’ve decided, cause you have the financial plan, decide how much to pay yourself and transfer that into like a savings account or, or into your personal account, and then say for taxes and profit. And then the rest is what the business has to for expenses. It’s kind of like a, a cash, uh, an envelope system. Did you ever hear about that type of system? Um,

Back in the day you have your envelopes for certain. Yeah, yeah.

Yeah. When I was first married and when we were 19 and 21, that was how we did it. You would pull cash out and you put them in these envelopes and if your entertainment envelope was empty, you had to figure something else out. And kind of the same thing as if when money first comes in, you, you decide, how do you want to use it? Then it makes a smaller bucket for operating so that you can, you can maintain those expenses a little better. That’s. So that’s what it is, you know, all the steps come to one place and then energetically make sure that the business is supporting your lifestyle. And as entrepreneurs, if you’re still at that bare minimum number, then we get to decide again, what are you going to go create? Or are you going to raise prices or are you going to do something else to look at opportunities that will bring something in like sponsorships or grants or some other thing that’s some new way for money to flow.

So what I’m hearing is, is like you said, understand your numbers, create the system, have your systems in place for your money. And then I’m also hearing like the second part of that is changing your perspective of how you look at the money that you’re bringing in.

Yeah, it is. It’s really about, and a lot of people have funny ways about this. When I talk about relationship to money, they’re like, well, and again, a lot of this is our mindset that we were given, um, before we were seven years old. So whatever our parents thought about money or our family or our extended family thought about money, we absorbed that by the time we were seven. And so for me, I was, um, both parents worked, I was a child of divorce. And so there was a lot of things about money that was kind of crunchy. There was always not enough. So I was given this lens of lack thinking. And so we’re, it’s not that we, it’s not that if all we think about lack is that’s what will draw to us. That’s, it’s, it’s just what we’re aware of. It’s like I was thinking this morning in the shower, um, when I was going, uh, when I bought a new car and it was red car, then all of a sudden, all I saw was red cars, right?

So if we are emotionally attached to something, whether it’s going right or wrong in our lives, we tend to see it everywhere. And so the same thing with lack and debt and a business when we are so focused on the debt, or at least when I was so focused on my own debt, that’s all I saw. And then it showed up that way. My credit cards were always out of, um, at limit, there wasn’t enough money in the checking account. Um, so I had to change my relationship with money. I had to have more gratitude for it so that I could see more abundance. And it was, it was difficult to start shifting out of that. It was a little uncomfortable, but when we can start having a gratitude of everything that money provides us every day. And like every day we find a little bit more and a little bit more, then we start to see more abundance and opportunities in front of us and our lack of thinking dries up.

So, but it is about relationship is all about all the things you have about any personal relationship. You have like a spouse or your mom or your kids or anything. You know, they like to have attention. Money loves to be paid attention to, they want you to have gratitude and appreciation for them. They want you to spend quality time with them. Money does too money wants you to be joyful. Like when money comes in, are you dancing and singing and being celebrity, you know, bringing really celebrating it money loves that. So just a few little things on your relationship could improve the, how money shows up and how it supports you on the long-term.

Now, speaking of relationship, I think you’ve said something in the past, giving money, a job. What is that? What does that look like? Yeah,

Well that goes back to that cash handling system. So once you have the plan, the cash handling system is like identifying the job that money has again, being intentional with how we want to use it. And so when you have a bank account or savings account for taxes, we’ll just use that as an example, because tax taxes happen. If we want to be a profitable, sustainable company, taxes will happen. So if we give a savings account and we call it taxes and we name that account everywhere on your, at your bank, on your bank statements, in any accounting tool that you look at, you have now given money, a job, everything that goes into that tax savings account it’s for that purpose. And now money realizes, oh, this is my job. I realized, this is what I’m going to support. And you might have to change your mind set about how you feel about taxes.

You might have to find something beneficial that you appreciate of what taxes is being paid for, but, you know, it knows. And then when taxes come due, you’ll have the money’s there. You feel more relieved, you’re happy for it. And if you don’t need it, then you can use it for something else. And that that’s, what’s great about savings accounts. First of all, you can do this for personal or business. Um, and savings accounts can, are normally free. And so you can like a vacation account. Like if you wanted to go to Disney, if you want to go to Disney world and you want it, you’d set up a vacation account and that’s the purpose for Disney. So every time you get enough money in there, you know, you could go do that. So it’s the same for business. We just need to bring that thought process in.

I like that. And when you were talking about like the different savings accounts, just to kind of give our listeners almost like a visual ablation visualization process, I always talk about like Instagram categories of how to talk about your business on Instagram. You can almost create like money categories, right? Cause you mentioned taxes. You can have a tax category, you can have a vacation category, you can have a, a personal development category where you put money back into your business. Right. So yeah, that kind of jumped to my head like, Ooh, money categories. I like that.

Yeah. And so that’s why you usually call like the owner’s pay. I call it owner’s wealth. And so if we’ve decided, and I like using percentages, it’s a lot easier. Like people are like, I don’t know what to do because when you create your financial plan, you create percentages of what you want every dollar to be spent on. And the owner’s wealth account could, could be transferring to your household income, but it could also be used to pay for pension or health insurance or something else that makes you feel more wealthy or that, that, um, can earn money, can make, put money to work. And so it earns some money for you, but yeah, a client of mine, um, one of the things I recommend for businesses is to set up a savings account at the very least thing you do is, is this one thing is set up one savings account, put anywhere from a half to 1% of every dollar that comes in and you’re going to start creating a profit savings account.

That’s going to give you a little bit of buffer. And so all my clients that had that buffer when COVID hit, there was a little bit less stress because we had something we could lean into. You hear about this on the personal side is that emergency account. But for the business, it’ll grow to whatever number you want it to be. Usually it’s around three months of expenses, but it’s magical when it’s like Disney magic. When it grows, you, you feel so much more confident in the business that it has what it needs. And it loosens up the, the worriness of what the future is going to hold. But, um, one of my clients built their profit account up enough that they really wanted to split it. So they eventually split the amount that they were putting in the profit account, one state in the business to create that sustainable, uh, foundation. And the other piece went into a growth account. And so as the account saved money, they were able to easily see, could they add another team member? Could they do X for their business? And so it was a super easy way for them to see where they were at and what they needed to do to be able to do that growth.

Now you mentioned earlier, we were kind of talking about solopreneurs, mompreneurs, maybe in the startup phase. And we were talking about, you can use spreadsheets, you should be looking at your numbers, know your numbers, look at them once a week. You don’t have the savings account. Where in, when do you know when it’s the right time in your business to bring in a bookkeeper or an accountant? When do you know that you make that transition?

Yeah. Yeah. It’s um, well, first off, usually if you just bring a bookkeeper in for some training, um, that will help if you’re feeling like you’re needing to move from that spreadsheet to accounting tool that does, that’s not doesn’t necessarily mean you need to bring a bookkeeper in there. And usually that’s below 60,000 in revenue. Um, you just might need a training an hour or two of training and get yourself organized. Um, maybe you’ll need somebody to help like one hour, each year or something, but that’s not a regular bookkeeper. Um, and when you get speed 60 to a hundred thousand in revenue, then now the business is making enough to give you a livable wage, helps support you and your household. Now you have enough money in the, in the business to possibly bring in a very part-time bookkeeper. Um, maybe somebody that’s just coming in once a month to help check everything, make sure it’s being EV the accounts are being re reconciled, um, helping keep the receipts in order that type of stuff.

And then as far as the tax pro go, I think any business at any level can benefit from having a tax pro in their lives because the tax pros have to do education. And the tax laws are constantly changing that you never know when something’s going to come into play, that could benefit your business. And so developing that relationship now, here’s the key on the tax pro? Not all tax pros are consultants, some tax pros just live for tax season. They just want to get, get your information, do the tax form, give it out to you. They’re not going to guide you because the financial industry is so male dominated. We have to sometimes kiss a few frogs before we find the right one, but there are a lot of, um, more tax professionals out there that are very more consultative, um, that they are building a consultation practice and that they have better communication skills these days than they did, uh, 19 years ago.

Yeah, that’s really, that’s a really good tip is to know at tax time, is it just somebody who is just going to slap your information in the computer, you know, and then April 15th, they’re done. And they’re not even going to look at anything else until, you know, January 1st of next year. Yeah. That’s, that’s really great advice. Now I know that we’re going to have a lot of listeners that are going to have money questions. So where can they connect with you? Yeah,

Well, that’s my thing is that I want, you know, we, we gave you a lot of information. And so my job as an educator is to make sure you have all the things you need to take the next step. And so what I want to encourage people to do is go to moneyactiontips.com, to schedule 30 minutes with me. Its cost is free. There’s no selling. There’s nothing. I just want to make sure you have your next steps, but in case this is our first date. You’ve never heard me. Maybe that’s a little too drastic. There is a free report on there as well, which are the first three steps for that cash handling system that we’ve been talking about so that you could look it over, but you can also find me on Instagram. We share some tips over there as well.

Awesome. Connie, this was such a great conversation about money and how everyone gets organized with their money start paying themselves. Right. I think I need to pay attention to that tip, especially. Yeah.

Yeah. And it’s all about really not, don’t be afraid. The numbers aren’t, they, they aren’t good or bad again. They’re just how you’re keeping score. It’s just a metric. And so the more that you can be friends with them, the more that you look at them, the less sensitized that you’ll get to them, the more can use them and be empowered with how you’re using numbers and money in your business in life.

Great advice. Thank you again, Connie, for being on the show today. Thanks Alison. It was great.