It’s the start of September and the kids are all going back to school. Doesn’t that feel great?!
After a whirlwind year of restrictions and homeschooling, being able to get back to some sense of normality just means the world feels like a calmer place.
And although time might seem to be passing really quickly…we need to remember that the year is not over yet!
In fact, if you look at the financial year which starts in April, then we’re actually only 6 months through the year. So we’ve still got 6 months left to make a massive impact.
So today we’re talking financial habits. Because you don’t need a special date or a new year’s resolution to make a change. You can decide TODAY to do something different that will make your world better, help you feel confident in your finances and in control when you think about your money.
So let’s take a look at the key things that we can do, to make sure we’re as switched on with our finances as we can (and need) to be!
You’ve probably heard me chat about my ROCK Solid™ programme before. It’s an amazing programme because it’s designed to put the basics and foundations in place that mean you can get on with growing your wealth and living your best life, without ever having to worry that the money is going to run out.
And the 4 key parts of that are things that make a massive difference, just by implementing little things at a time.
Today I want to focus on the first (and most important) financial habit – which is creating a regular income for yourself.
Let me ask you…how consistent is your monthly income right now?
Because as a business owner, having your income go up and down is one of the most stressful things that can happen.
It doesn’t matter how much money you’re making. So many entrepreneurs (and people generally) think that once they’re earning more money, they will feel more financially secure.
But often, if just doesn’t happen that way, because they haven’t got the right things in place behind the scenes. Like we talked about in a previous blog, just because you’re now earning six figures or more doesn’t mean that you necessarily have got all your financial ducks in a row.
You can be making 6 figures in your business but still feel pretty skint.
So if you’re not already, you need to be paying yourself a regular amount of money each month, from your business account into your personal accounts. So that you can budget at home for all the household spending and fun stuff you need and want.
If you want to take this one step further, you might then want to look at setting up money pots and organising different accounts for different purposes.
But if the only thing you do is set up a regular payment once a month for that fixed amount, you’ll have made a massive, massive step forward.
And then with 6 months left to run of this financial year, it’s time to have a look at the goals you’ve set yourself – and whether there are things you can do NOW, to make them happen.
Maybe you decided that next year, you’d love a better summer holiday than you were able to have this year. You fancy a Caribbean cruise or a luxury fortnight in Santorini. How are you going to afford to do that?
Are you going to put some money away in a separate account – setting up a standing order to go out automatically, on the day you pay yourself each month? Or are you going to take on a part time job or create another income stream that you’ll use just to pay for your holidays and travel?
If you don’t think about it, it’s not just going to happen on its own. So you need to come up with a plan.
But your plan needs to be manageable. The key with implementing any new financial habit is that you need to do something realistic.
It’s the reason that crash diets don’t work. If you try to cut a whole food group out of your diet, at some point, you’re really going to miss it. Whether you’re trying to go without carbs, cut down on meat or give up alcohol, often going completely without makes it such a hard thing to do that you ‘fall off the wagon’ and never really succeed in the long run (of course there are exceptions, everyone knows a 60-a-day smoker who went cold turkey…but it’s not the way for most people).
And then because you haven’t succeeded, you feel like you can’t do it and you’re not going to win.
The same thing is true with money. If you set yourself a target that’s completely unrealistic and you don’t make enough progress towards it, you feel like there’s no point. Why bother even trying? Which is why it’s SO important to have a way of tracking your progress towards your goal.
So let’s say that next year, you’ve decided you want to take the kids to Disneyland. You want decent seats on the plane to Florida, you know the Disney resort you want to stay in, and you want to have plenty of spending money while you’re there.
Let’s say it’s going to cost £10,000. You want to put some money away each month over the next year, to make sure there’s enough there to pay for the trip – which works out at £833 a month.
Now look at the spending patterns in your household, to work out whether £833 a month is affordable. Is it realistic?
If not, you might decide you’d rather have a different holiday, on a different budget. But you really (really) want to take the kids to Disney.
Looking at your budget, £400 a month is more realistic than £833. So you decide to put the trip back a year, giving yourself the extra 12 months to save.
So what to do next?
Well, I’d always advise having a separate bank account to keep this money in – a building society account, bank account, savings account or even Premium Bonds. But somewhere where you can put the money and it’s out of sight and out of mind, so you’re never tempted to dip into it to go out for a meal or buy a pair of shoes.
And then you’ll want to monitor your progress. So each month, you’ll be looking at the amount in your bank account and watching it grow towards your target.
There’s a massive sense of achievement when you realise that after 3 months, you’ve crossed the £1,000 barrier. By 6 months, you’re up to nearly £2,500. And by the end of the first year, you’re halfway there!
By celebrating your success and moving along towards your goal, you’ll feel like you’re actually making progress. And that is so, SO important.
But sometimes it can be hard to motivate yourself or to find the time to keep on top of these things, when life feels so hectic. And I get it – I’m a busy business owner, a mum of two and I’ve got seven alpacas in the garden (not to mention the chickens and the cats!).
There’s always a lot going on at our house. So I’ll tell you what I do.
The first week of every month, I log into my computer and I look at all my numbers on a spreadsheet. I look at what I’ve saved, what I’ve spent and how my investments are growing, so that I can see the progress from one month to the next.
And the good news is that I’ve found a way that YOU can be involved in this too!
So that every month, you can join me on an interactive session where you give yourself the time to go through your numbers (which I honestly think is the ultimate self-care!). To make progress towards your plan and to celebrate your success, all in a way that’s completely confidential.
How does that sound?!
We call it the Asset Accelerator – a new programme starting in October. To help people with a plan take action with their finances, to make it happen.
As well as private 1:1 time with me, you’ll get the monthly interactive ‘Asset Growth Check-In Session’ and a drop-in Q+A session later in the month, for any more support you need. So that every month, you make progress towards your goal and you can actually see the difference you’re making.
Plus it’s one of the most cost-effective ways to work with me right now!
Because let’s be honest…that goal of yours, you really want it. Right?!
And the sooner you start taking action on your plan, the sooner it’s going to happen!
Until next time,