I Finally Got Real About My Personal Finances.
We talk all of the time about how interwoven the personal and business finances can be for small business owners. The choices you make in one space can greatly affect the other space and both together can cause a lot of stress for small business owners. I think this is especially true in the past year or so. The economy has shifted drastically. Inflation has caused increases in expenses in all areas of our businesses and lives. There has also been a change in how individuals are spending money, which, if you are selling something seen as “non-essential”, you could be feeling the crunch.
As my business was growing rapidly between 2020-2023 I essentially buried my head in the sand about my personal finances. I was dealing with a challenging (and expensive) personal crisis as well, which meant I was spending money I really didn’t have, while ignoring all of it. The farther along I went the more anxiety I had about dealing with it. Over the summer in 2023, I sat down and took a hard look at things. I put systems in place to track my personal finances the way I track my business. I thought about my long term goals and took some time to envision my life over the next 5-10 years as my kids get ready to leave home. It was hard, but it actually helped to relieve my stress. Once I knew what I was working with, it was easier to map a path out to a better place. It also helped me to take a look at the ways my life would be changing in the next several years, and how my financial picture would be shifting too.
Here are some of the things that I have tackled over the past 8 months, which we will touch on over the next month of topics on social media.
Find the right system for you: There is no one size fits all tracking system and you need to find the app or tool that is best for you. I use a quickbooks file for my big picture tracking (because of course I do…) Quickbooks has a new $10/mo option that is perfect for this if that tool works for you. There are tons of other apps for your phone or spreadsheet templates that others have had massive success with.
Use your bank and credit cards to help you out: A big part of my issue was trying to track everything in one mess of a bank account. I would end up with bank fees because I didn’t track the timing of bills and my grocery shopping. I also would run into the issue where I had plenty of money in one account, but there was no auto transfer set up if another account got low. I went to my bank and opened several connected checking and savings accounts. My bank even let me name them what I wanted so it's really clear. I have one account for all of my regular bills, one for my other personal spending, a travel savings account and a debt payoff savings account. I also set up a set of transfer rules so if accounts get low, there will be auto transfers to cover balances and avoid fees or returned payments. It’s saved me hundreds of dollars this year and made things much less stressful.
Saving for the future: In addition to my bank account, I have also set up and started regularly contributing to a retirement account for myself and IRAs for each of my kids.
Paying off debt: I had accumulated a decent pile of debt as I grew the business and navigated those personal challenges. I have a solid plan in place to get that paid off by the middle of next year and it feels great to have a light at the end of the tunnel.
Change your mindset around money: I had to spend some time digging into why I was so avoidant about my finances. I also needed to observe and address some of my unhealthy financial habits that were counter to my bigger goals and how I wanted my life to feel and look. Taking these steps have allowed me to be more mindful in my spending and saving and have lowered my stress considerably.
These are the steps I have taken. Your path may be different, but hopefully this month, we will tackle some of the challenges and strategies that will help you on your own journey. Let us know if there are topics you want us to cover!
We Want To Know…
What are your favorite tools for tracking your personal finances?
What apps have you tried and loved or hated?
What topics around personal finance would you like us to cover in future posts?
Tell us all about it here
(Also, please enjoy this picture of the cat distribution system at work.)
