One step at a time … now Commit
Money fears can be horrible. We just talked about taking the first step to reduce money anxiety: Begin to Track your Money. The first step of creating a system to track you money is important because …
before you can figure out what you need to do, you need to figure out what you are doing .
There is help available — we talked about reaching out to an accountant who can help you create a system that works for you. At that point, you can have the accountant do more of the work for you or you can jump in and do some of the work.
Once you track the information, let’s talk about how that information can be powerful to help you make money decisions. Let’s take a step to help you reduce money fears.
Objectively look at the information
After your get through Goal #1 of tracking your numbers, you can move forward. It’s time to look at those numbers!
This is the hard part because you may find you are spending a lot more on certain items than you thought.
But the good news: Knowledge is Power. Once you have more knowledge, You can start taking steps to reduce money fears.
You can take steps to take better control.
The important part is to look at it objectively. Many times clients come to me and say “We now have a system and it’s giving me information. I am ready to make different money decisions. Where do I start?”
One of the advantages that I have is that I am not at their business (or home) day-to-day and, therefore, don’t have the emotional tugs that my client has. I have the advantage of being more objective when I look at the financials. Yes, I care about my client and I empathize with their concerns . . . but since I am more objective, I can throw out ideas without as many emotional tugs. The client can then say yes or no. But, objective ideas begin.
That’s what you need to do. You can get help from an accountant or start yourself: step back and look at the numbers as objectively as you can.
Take specific steps
Running a business can be complex. (And home financials can get tough). Accounting can be complex. BUT, more often than not, money issues come down to a basic concept:
You need to make more money – or – you need to spend less money.
And to really help reduce money fears, here are some recent business ideas I have given my clients how to cut back spending. Note: consider using these ideas in your personal life as you look at your home financials.
Travel & Entertainment
This is one of the key expense items that I see used extensively. And it really is the one that business owners don’t want to cut. But it could be a quick way to stop money bleeding. Stop eating out. Stop taking clients to expensive restaurants. I’m not saying forever. I’m saying for a period of time when you are having money issues. Stop the conventions, some the seminars, stop traveling.
Amazon, Audible, Paypal
Yes, all these expenses for your business may seem small. But you may not realize: they add up. Look at reducing some of these.
Credit card processing fees
Really look at these. Recently I told a client: “I know you may like the person who signed you up, but let’s check around for rates, you are getting hit and the fees are getting larger”. By the say, this is true for your personal credit cards.
It’s easy to overdraw you checking if you are having money issues. But see if you can move money around so you don’t overdraw your checking account. I have seen this more than once: businesses get hit with a bad check fee of $33 PER CHECK. (And yes, you can get charged on your personal account if you also do this). I have called my clients before to say: “I just checked your bank account, can you transfer dollars, or you will be down hundreds of dollars more by the weekend”. I can’t always make that client call because I am not in every client’s bank records daily. So, for sure, you need to keep track of your bank balances.
Go through every expense item. This is when an accountant can be helpful. I say to my clients “I am not judging and you may disagree. I am going to throw out objective ideas. You can determine if they are possible for you or not”.
That’s what discussions with qualified accountants are for: go back and forth so you can find a solution that will help you and your business. And this same process can help you with your personal financials.
Reduce money fears? There is hope!
Set a goal and chip away at it one day at a time. Larger businesses have accountants on staff. Smaller businesses can look at outsourcing accounting services. But knowing your numbers is power. Tracking information gives you information and Reviewing that information can help you make better money decisions.
In talking with clients, I know that looking at numbers and spending time with an accountant may not be the “fun” area of your business. It’s may be more fun to go to a seminar, talk marketing, and talk sales.
But understanding your numbers can make the difference between solving problems or fearing problems.
Set a goal. P.S. Go back to Part 1 and re-read the Swiss Cheese method to goal setting.