Back when I decided to leave my full-time job and take the jump into freelancing full-time, I was scared. What did you mean I wouldn’t be getting a paycheque every two weeks? What did you mean I had to figure out my finances? All of these things seemed super daunting to me and incredibly overwhelming. This is when I made an appointment with Shannon Simmons, a financial planner at The New School of Finance, who came highly recommended to me by a friend.
She sat me down and we discussed how I could get to the salary I was making and eventually save up for things like pregnancy and vacations. I didn’t think this was possible, but well – here I am two years later into my freelance life and while there is no impending pregnancy on the horizon, I have taken multiple trips and saved for months when things have been lean. I wouldn’t have been able to do that without Shannon’s sage advice.
In December 2017, Simmon’s released her first book “Worry-Free Money: The guilt-free approach to managing your money and your life” and we sat down to talk about tips and tricks for getting your finances in order when you’re a #BossBabe entrepreneur just figuring it out.
1. Get your personal financial house in order.
As a business owner, your business finances are your personal finances and vice versa. If one is suffering it inevitably affects the other. So, start off on the right foot. Make sure you know what you can and cannot afford in order to be safe and happy with your finances. Prioritize your financial goals and start putting even a little bit of money towards them. In my book, Worry-Free Money, I call this type of saving Meaningful Savings. This is any type of savings hat moving your finances forward in a good way. These are things like paying down consumer debt off first, building an emergency account and then saving up for your long-term nest egg.
2. Know what you need to earn from your business to survive financially
I call this your Hard Limit. You should know yours. It’s the line in the sand that separates the money you can and cannot afford to spend. It’s important to figure out this out as an entrepreneur because you need to know how much money your business needs to earn to float itself and your personal life!
3. Make emergency savings a priority.
As an entrepreneur, you’re bound to have some slow seasons that can freak you right out financially. You should aim to have have emergency savings of 6 months of bills and food. That may seem like a lot, but as entrepreneurs you may not qualify for Employment Insurance or maybe your business is just starting out and you need some financial cushion so you can pay your bills and focus on building the business. Emergency accounts are so important that I spend an entire chapter of the book talking about my deep love for emergency savings.
4. Don’t compare yourself to other entrepreneurs
It’s really easy to scroll through social media and think “Wow, that other entrepreneur doing exactly what I’m doing sure has it going on, why is my business failing?” Do not do this. I repeat. Do not do this. You don’t know what’s going on behind the scenes financially. In the book, I call this the Beyoncé Factor. For example, you probably wouldn’t feel bad about your business finances if Beyoncé bought a yacht because she’s in a totally different financial situation than you and therefore you don’t compare yourself to her. Well that other entrepreneur making you feel inadequate could have a lot of debt. Perhaps they are paying mad money for a publicist. Perhaps they work their butt off for 16 hours days but don’t earn anywhere near what you think they earn. Maybe they are bankrolled by family. Who knows!? The point is, you don’t know, so you can’t compare yourself to them. Unless you know the nitty gritty numerical details of someone’s life, they may as well be Beyoncé, so you can’t compare yourself or your business to them.
5. Have patience
Don’t get discouraged. It takes time for a business to grow. Give yourself time and remember that a little bit goes a long way. A little bit more revenue here and a little less expenses there can help move your business forward at a sustainable rate. Be kind to yourself and your business. Be realistic about what you need it to do for you and what it can do right out the gate. Patience my friend. Patience. If you build it….. they will come.
For more information on Shannon Simmons and The New School of Finance please click HERE.
(Story by Contributing Editor, Ama Scriver)