Success Starts with Self-Mastery: The Financial
Today I’ll return to the topic of success through self-mastery, but I’ll be focusing on the financial aspect.
How do you master the financial part of your life? Do you have financial goals each month? Do you have long term goals? In this post I’ll share three strategies to help you become a master of your financial future.
Strategy One: Budget
For years I refused to use a budget. I was in denial, and having a budget felt so restrictive. I didn’t want restrictions because I had the mindset that money was mine for the taking. I felt like a budget would be unnecessarily limiting myself. But that isn’t the truth.
A budget gives you power over your money, it tells your money where to go, and allocates your funds. So, instead of looking at a budget as a restrictive, rigid thing, think of it as allowing you the option to allocate your money where you want and need it to go.
My recommendation, which comes from something that I learned at the Dave Ramsey SMART conference, was to budget your money down to zero. Take all of your income and literally break it down so it comes out to zero. You take your total monthly income and subtract all of your expenses, then decide what you want to do with the overage. Or, you may also need to decide how to handle a deficit, which could be a wake-up call to help you realize how important a budget really is.
In my case, I ended up saying, “Okay, I need to decide how much more I’m going to put into each category.” So if I do less shopping, and have an excess in the budget, I would have more that could:
- Go into savings
- Go into my retirement
- Go into tithing for my church
- Go to vacation or gift savings accounts
You have all of this extra money that you could save for future entrepreneurial investments. When you’re in charge of your own money, it’s really cool to see what you can do when you have extra.
If there is a deficit, it should be the wake-up call. You have to clearly see that eating out every day for lunch and dinner is sucking the life out of your funds. Do you really want your money to be working for you in that way? For those of us who are really busy, it could be actually more cost effective to hire someone who does your food preparation for you. They’d go to the grocery store, prep, and cook the food, which would actually save you money from eating out every day, and it would also save you a lot of time and effort. You just outsourced a need in your life. So just think creatively like that about how to potentially avoid adding more work to your life, while still directing your money where it needs to be.
For me, shopping was a major issue. It’s hard for me to resist going to a nice outdoor mall, looking around, and finding so many adorable things that I want. I actually ended up owning many things that were extremely similar to things I already owned. I’m sure some of you do that too. How many of you go out and buy shoes, or shirts, or jewelry that actually all looks the same? I always buy similar things because they fit my style, but I end up wearing literally ten to twenty percent of what’s in my closet.
This just proves my point that your money could be going towards things that aren’t actually serving you or your long-term goals.
What are your long-term goals? After you set up your budget for what you’re currently working with, I want to challenge you to take some time to create your “Someday Budget.” These are the things you want to do with your money “someday” when you have extra income or profit. You can make a someday budget for your business and for yourself. I would encourage you to do both.
If you’re currently operating on $2,000 per month, what is it going to look like if you’re operating at $4,000? 6,000? 12,000? Or even higher? How are you going to budget your money to work for you? I think that if you have the vision for what’s going to come, the work and effort you put in now is going to propel you exponentially. You’ve heard of the people who win the lottery and then have their entire lives fall apart because they didn’t know how to manage what they suddenly gained. If you can manage your money today and then set up your future goal, it will be freeing for you. It’s very exciting working towards that goal and freedom.
Strategy Two: Goal Setting
I recommend that as soon as possible, you sit down and set personal goals for yourself as well as your business goals. The key is to simplify.
Here’s an example. If you’re currently bringing in $4,000 a month but your goal is to bring in $6,000 a month, you’re looking for a $2,000 increase. How are you going to increase your monthly income by $2,000?
There are a few ways to start making your money. The first is by increasing the number of customers that walk through your door. How can you increase the number of customers, the average ticket of each customer, and the number of transactions each month? Those are three components to think about. You can do something promotional that doesn’t devalue your business, meaning discounts aren’t the answer. When I talk about promotions I’m suggesting that you think outside of the box.
How can you increase the number of transactions per month? Think about what would make your clients come in more often. What about a waxing promotion, where clients would get a complimentary wax of their choice when they do a brow wax? Instead of devaluing yourself with a discounted service, you’re offering an ad-on deal. Or what if you said, “If you come in for a treatment, you’ll receive a $10 gift card to use towards products.” That’s another great promotion that does not devalue what you’re offering. It’s giving a gift, something of value, which will encourage an increase in the number of transactions during the promoted time period.
To increase the number of customers coming in, there is a phenomenal marketing tool called Meet Your Stylist. This tool gives your salon a unique marketing survey that potential clients can use to get matched with stylists that are the best fit for them. The tool is a great way to encourage more visitors to your salon!
The final possible method is to increase the average ticket. Is it time for you to increase your prices? If you have a goal of reaching an additional $2,000 a month, it definitely might be time. If you’ve been very busy and you think you have loyal clientele, consider raising your prices. You have to think outside of the box, ask yourself, “How do I start working smarter, rather than working harder?” You can definitely increase your income by putting in more hours, because the one thing you can leverage is your time. But how can you think outside of the box so that you’re making other things work on your behalf?
Do you hire so that you can divide and multiply your business? These are all really fun things to think about. I don't expect that you’re going to implement this tomorrow or the next month, but having that clear goal in front of you will keep you more focused and more likely to work towards that goal.
Strategy Three: Review
Once you do any of these other steps and strategies, you need to come back and review your progress. My husband and I have a monthly financial budget meeting. We actually sit down and schedule it in our calendars just like a business meeting. We look at what we did last month with our spending and whether we stayed in budget. We decide if we have excess to work with, or if we spent too much. So each month we do this check-in to review our budgeting, spending and finances, and make sure to communicate with each other about everything.
With your business, you’ll want to review each month by looking at your profit and law statements, and checking your balance sheet. You’ll also want to have bi-annual meetings. Twice a year, sit down and ask yourself if you’re reaching your goals for your business. Then decide what you have to do to get there. If you’re already there, that’s great! Revise and set a new goal. It’s really a matter of mastering the management of your money.
At the end of the day, this is only a piece of the puzzle that is your life. You need a budget that tells your money what to do so that you’re in control of your own finances. Set goals so that you’re not restricted. The goals are what free you up to do the bigger things you want to do in your life. Maybe you desire to make more, live more, or make less and live off of less. Everybody has a different plan and that’s okay, as long as you have goals.
But make time for the review aspect. Set up an appointment for yourself, at your business, maybe even with your business coach. Confirm that the budget is in place and that your goals are underway. If you do these things, I believe you will be successful in your financial life.