I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?
Your Money. Your Life.
As we enter the countdown to a new year — 10 days to go — I'm reminded of an end-of-year ritual I started a few decades back.
Last week, I mentioned that in 1999 I went on a six month walkabout along the Pacific Rim.
About 4 years before that grand adventure, I was working two jobs to make ends meet (and pay off my student loans) when I read the book Your Money or Your Life by Joe Dominguez and Vicki Robin.
This book really did change my life and point of view about work, money, and ultimately pricing, even though I was a long way from being an entrepreneur at the time.
It's the reason why I was able to afford to quit my job and travel back then, let alone stop moonlighting for extra cash. And why, when I lost my job in 2008, I was more worried about my bruised ego than my bank account.
Almost immediately upon finishing the book, I begin tracking every penny I earn and spend. Each day I write down the day's expenses and total them up in an old-school black and white composition notebook.
The basic idea behind the book is to think about your money in terms of the time you invest to earn it.
When you consider a purchase based on how much time you're spending at work to afford it, it forces you to reconsider your priorities.
Is that Starbucks worth 20 minutes of your life? How about a bag of chips?Are you willing to trade a day for the latest cool gadget? If you find you do your fair share of impulse shopping or retail therapy, this will cure you of it fast!
In addition, it's really helpful to understand how much time (or life) it costs you to pay your rent or mortgage, your electricity, your healthcare and other vital living expenses.
Even as I travel, I continue to track all my expenses each day in part because it's become second nature to me. Upon my return, I have the bright idea to bring my system online and into an Excel spreadsheet I design for the purpose.
This enables me to categorize and sort my spending by the week, month, quarter and year. And to compare my spending year-to-year.
This, in turn, leads me to conduct a financial year-in-review and to consider my financial goals for the year to come. I ask myself:
- What are the big purchases I want to make?
- What are my investment goals for the year ahead?
- What are my financial concerns and how might I mitigate them?
Although I no longer track every penny I earn and spend in my personal life as I once did, I still conduct my financial year-in-review and planning. It not only clarifies my priorities for the year ahead but it informs my business planning and strategy.
Obviously, these things are connected, and yet all too often I meet entrepreneurs who allow their business finances to dictate and limit their personal goals.
My advice is to do the opposite.
Start with the life you want to live and design your business strategy to support that vision.
Equally important is to make sure you're tracking the right indicators to keep you on course as you go and grow.
If you think you might need some help with all of this, I'm here for you.
Whether you're celebrating a holiday or just taking a break over the next week or so, I hope you enjoy, relax, and rejuvenate!
Until next time,
PS – In case you missed it, last time I suggested an alternative to If and When thinking that's really worth a try.
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I help entrepreneurs leapfrog over the typical potholes that derail most small businesses with inspiration, motivation, education, and support across a wide range of business topics drawn from over a decade of running my own business, teaching entrepreneurship for the City of New York, and coaching and consulting privately with dozens of women and minority small business owners. Honestly, why go it alone when help is an email away?
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