How Overspending Can Affect Your Small Business

We tend to think of overspending as a personal issue. A scene from Confessions of a Shopaholic might come to mind when you read the word – we think of this behavior as relegated to emotionally-motivated shopping sprees. But the truth is, emotional spending, and the resulting overspending, can easily happen in our business finances too.

What Does Overspending Look Like in Business Finances?

Overspending in business can show up in a variety of different ways, but there are two keys to recognizing it:

1)The spending behavior is emotionally motivated.

The emotional landscape underlying overspending is often one of insufficiency – we feel like there’s something about our business (or ourselves) that is lacking, so we rush to spend to make up for it. This can manifest as easily-labeled emotional issues like impostor syndrome, or perfectionism, or the myth that you need to “spend money to make money.”

As a general rule, it can be helpful to do some emotional inquiry around your finances. When making spending decisions, try asking yourself, “What emotions are coming up around these decisions?”

2) The spending on one area of the business is detracting from others that may also need some monetary resource.

This can be hard to spot. Especially for small business owners, there are often not clear industry standards for how much a business “should” spend on a particular category, and even if these do exist for your niche, they may not be helpful or accurate. However, if there is a clear difference between the amount you’re spending in one area and others, and there is an emotional component to that spending, then it may be overspending.

How Can Overspending Affect Your Small Business?

This is the interesting paradox of overspending – it creates deprivation. Karen McCall summarizes this idea beautifully in her book Financial Recovery when she explains how overspenders are likely to spend it all on “pretties” while neglecting the “necessaries.” This can show up in a business in situations where certain pieces, like aesthetic branding or top-of-the-line equipment, are easily prioritized, but there isn’t enough cash on hand to pay for a business license or save for tax expenses.

The result is not a financially functional business. While there are some elements covered, without a money system that prioritizes important logistics and gets you paid, the business will soon become draining to run and simply eat cash.

You Know Best

It’s important to remember that when it comes to your business, you are the best expert. Nobody can decide that you’re overspending on a certain category except you. A good bookkeeper or a money buddy can help observe financial patterns in your business and give you some advice, and this can be an extremely helpful resource! But ultimately, you call the shots around spending in your business – it’s important to remember that and to stay confident in your choices.

If you liked this article, you’ll probably enjoy my free EBook, Reach Your Life Goals: A Business Owner’s Guide. Download a free copy here.

By |2023-07-26T11:01:49-07:00July 14th, 2023|Categories: Financial Clarity, Small Business|Tags: , , , |0 Comments
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Why Self-Compassion is Important During Tax Time

When it comes time to reflect on the financial choices you’ve made over the last year, shame and guilt, along with many other emotions, are likely to show their faces. Many people spend tax time berating themselves for mistakes or missed opportunities. I’d like to suggest a different approach. Instead of shaming and blaming ourselves, what if we tried empathy? Approaching tax time with financial self-compassion is important. It has positive impacts on our mental wellbeing, our productivity, and our bottom lines.

Stop the Blame Game

During tax time, we review the last tax year and every financial decision we made – or didn’t make – along with that. Since 2020 was an exceptionally challenging year, reviewing it will likely be challenging too. You may have faced some tough decisions last year. Perhaps you had to pull money out of your IRA, or you took on some consumer debt to pay bills. Whatever your situation is, and however it gets reflected on your 2020 tax return, stop the blame. Blaming and shaming yourself for whatever state your finances might be in won’t change your circumstances. Actually, it may get in the way of moving forward on your financial growth.

Financial Self-Compassion Clarifies Solutions

Self-compassion just might be integral to your financial success. Studies show that encouraging empathy and compassion can open us to adopt a growth mindset, where we are open to learning from our mistakes and trying new things. A growth mindset makes it possible for us to think clearly about the problems we face, and find new innovative solutions.

What opportunities might financial self-compassion open for us during tax time? For starters, instead of blaming and punishing ourselves for our financial missteps by going it alone this tax time, financial self-compassion might inspire us to open up to a money buddy about our tax concerns. We might get some useful ideas or feedback this way. We might also take a look at our spending plan, and decide that the money needed to hire an expert to help us with our taxes is well worth it this year. Without the shame and guilt, we are less likely to try to handle our money problems in isolation. We are open to new solutions and better ideas.

For more financial self care ideas, check out my free e-Book, 9 Secrets to Financial Self Care. These secrets run the gamut from the emotional (like forgiving yourself for past financial mistakes) to the practical (like setting aside regular “money time”).

Image by: Tim Marshall

This post was first published in March 2021

By |2022-03-11T12:43:44-08:00March 11th, 2022|Categories: Money Mindset, Taxes|Tags: , , , , , , , |0 Comments
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Want to Grow Your Business? Check Your Impostor Syndrome First

Financial anxieties hold us back in many ways. Oversaving can prevent us from living our lives fully and meeting our needs. Similarly, impostor syndrome often holds us back from investing in our businesses and developing our experience as business owners.

“What if I’m not _____ enough?”

Out of all the questions impostor syndrome brings out of the shadows, this one is probably at the root of all of them. You might find yourself stalling on getting further education because you don’t feel ready. Perhaps you’re refusing to take the leap and hire an employee or purchase some equipment because you feel like you “can get along well enough without it.”

While this may be true, when we don’t take these steps because we’re internally blocking our own growth, this can have longterm effects on our wellbeing and satisfaction in life. In some cases, doing any of these can make a huge difference to you and your business. Are there places in your business where you’ve been wanting to grow but are holding yourself back mainly because of fear? Are you afraid of success or growth? Take some time to sit with these questions and separate what you truly want but are keeping out of your life based on fear from what actually doesn’t sound fulfilling to you.

Look at Your Numbers

Sometimes having unclear finances can fan the flames of your impostor syndrome. That means the first step is to get clear on where you stand financially, in your business and your personal life. I have a lot of resources for getting started on this process on my blog, but you might like to start with my e-Book, 9 Secrets to Financial Self Care.

Once you’ve got the big picture cleared up, refer to this post from last week, “How Much Should You Invest in Your Business?” which can help you think through how much money is reasonable to spend here. Rather than relying on your feelings about money and your business, let the numbers do the talking. Seeing how much money you actually have available to spend is much more reliable for decision making than listening to your impostor syndrome.

Prioritize Your Why

Above all else, when faced with a decision around your business, refer back to your money why and your core values. Ask yourself, “Will making this choice bring in more of what I want?” If it’s a yes, even though it might bring up anxieties, you know the way to move forward.

Happy investing! If you’d like to work through this process with an expert guide, check out my services and set up a Financial Self Care Consultation! I’d love to see if we can work together to help you bust through emotional and financial blocks.

☮

Angela

By |2021-07-20T09:44:11-07:00July 19th, 2021|Categories: Money Mindset, Small Business|Tags: , , , , , , , |0 Comments
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Why Self-Compassion is Important During Tax Time

When it comes time to reflect on the financial choices you’ve made over the last year, shame and guilt, along with many other emotions, are likely to show their faces. Many people spend tax time berating themselves for mistakes or missed opportunities. I’d like to suggest a different approach. Instead of shaming and blaming ourselves, what if we tried empathy? Approaching tax time with financial self-compassion is important. It has positive impacts on our mental wellbeing, our productivity, and our bottom lines.

Stop the Blame Game

During tax time, we review the last tax year and every financial decision we made – or didn’t make – along with that. Since 2020 was an exceptionally challenging year, reviewing it will likely be challenging too. You may have faced some tough decisions last year. Perhaps you had to pull money out of your IRA, or you took on some consumer debt to pay bills. Whatever your situation is, and however it gets reflected on your 2020 tax return, stop the blame. Blaming and shaming yourself for whatever state your finances might be in won’t change your circumstances. Actually, it may get in the way of moving forward on your financial growth.

Financial Self-Compassion Clarifies Solutions

Self-compassion just might be integral to your financial success. Studies show that encouraging empathy and compassion can open us to adopt a growth mindset, where we are open to learning from our mistakes and trying new things. A growth mindset makes it possible for us to think clearly about the problems we face, and find new innovative solutions.

What opportunities might financial self-compassion open for us during tax time? For starters, instead of blaming and punishing ourselves for our financial missteps by going it alone this tax time, financial self-compassion might inspire us to open up to a money buddy about our tax concerns. We might get some useful ideas or feedback this way. We might also take a look at our spending plan, and decide that the money needed to hire an expert to help us with our taxes is well worth it this year. Without the shame and guilt, we are less likely to try to handle our money problems in isolation. We are open to new solutions and better ideas.

For more financial self care ideas, check out my free e-Book, 9 Secrets to Financial Self Care. These secrets run the gambit from the emotional (like forgiving yourself for past financial mistakes) to the practical (like setting aside regular “money time”).

☮ With peace and self-compassion,

Angela

Image by: Tim Marshall

By |2021-03-23T13:37:31-07:00March 23rd, 2021|Categories: Money Mindset, Taxes|Tags: , , , , , , , |0 Comments
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How Your Relationship With Money Affects Your Finances (and What You Can Do About It)

Your relationship with money can make the difference between a steady stream of income and a trickle. How so? Because the way you relate to money, the beliefs you hold around it, etc. – these things affect how you pursue money and how you make decisions with it. Today, let’s dive deep into how your relationship with money affects your business and personal finances, and what you can do to improve that relationship.

How Do You Relate to Money?

If you want to get a quick pulse on your relationship with money, think about money or say “Money,” out loud to yourself, and then keep track of what emotions come up. More than likely, there will be several that come up in a quick succession: anxiety, avoidance, excitement, compulsion or repulsion, etc. The goal with this exercise is not to suppress or judge any of the feelings as good or bad. Simply take note of them as they come up. Try this several times to get a full emotional picture.

How You Relate to Money Affects Your Finances

If you’re anything like most of us, anger, shame, and elation may have made an appearance during that exercise. Other common visitors are anxiety, avoidance, and a vague feeling of worry. All of these emotions influence our behavior around money. They dictate whether we’re an over-spender or an over-saver, whether we’re bold with our investments or cautious. In our business and personal finances, if we feel strong repulsive emotions like shame and stress, we may avoid looking at our money all together. This can lead small business owners to live in a state of perpetual vagueness around their finances.

Many of the emotions we’ve examined are negative ones, but your relationship with money can also include positive emotions that can be leveraged. Elation, for example, can motivate you to take action and claim financial agency. Personally, when I think about money, one positive thing that comes up is the way that money gives me choices in life. Associating choice with money has long helped me maintain a positive relationship with my finances.

For many of us, the goal is to simply reduce the stress involved in our finances, so that we can begin to handle them from a more rational place. Acknowledging all the emotions housed in our relationship with money is the first step.

How to Improve Your Relationship With Money

Now that you have a good idea of your “emotional money picture,” and an understanding of how it effects your financial behavior, let’s talk about how you can start improving your relationship with money. This process involves looking at your life over the longterm, and examining what experiences and people shaped the way you feel about money today. There are a couple different ways to do this:

  • Journal prompts are a great way to dig into this and examine your past with money. To get things started, I suggest trying out the prompt “People with money are _____.” You can fill in the blank, and then write about the experiences or people who informed this opinion. Try not to edit yourself. Just observe the feelings and memories that come up. After you’re done, you might take some time to examine what you’ve written and see if you can find examples from your life that contradict those beliefs.
  • If you aren’t the journalling type, talk to a money buddy, confidant, or coach. Make sure this person will hold nonjudgemental space for you. Try doing the exercise above, or shape your conversation in such a way that you can really get in there and see the roots of your money beliefs.
  • Reflect on how your financial situation has changed over the years, and in recent times due to COVID-19. Sudden changes in financial circumstances can trigger new emotions around money, and bring up old ones. This interview I did with photographer Jennifer Graham makes a great example of how the pandemic has effected people financially in the short term, and what coping strategies can be employed around that.

A Note on Money Beliefs vs. Societal Circumstances

Before I wrap this up, I want to acknowledge the current state of our society and economy. While more aid for small businesses has recently been approved, we are living through an economically damaging pandemic. There are likely many systemic factors effecting your experience with and relationship to money, including race, social class, gender, etc. I believe it’s important to take this context into account when working on your relationship with money, while not letting it discourage you from claiming financial agency.

I hope this has been helpful. If you’d like to have these conversations with a nonjudgemental accountability partner, I offer as-needed personal financial coaching sessions, or 3 and 6 month business finance coaching engagements. I have guided many clients through the process of working on their money beliefs, and would love for you to set up a free Financial Self Care Consultation to find out if we could work together well, too!

☮

Angela

Image: Natalie Breeze

 

By |2021-03-09T11:46:07-08:00February 8th, 2021|Categories: Money Mindset|Tags: , , , , , , , , , , , , , |0 Comments
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Stop Expecting “Business As Usual”

So far, 2020 has been a challenge for many business owners. The COVID-19 pandemic and its economic fallout and the protests that have broken out around the country have both rocked the business landscape. Many solopreneurs and business owners have had to completely reshape their offerings and financial strategies. Perhaps this includes you!

This time last year, I shared my thoughts on how to do a mid-year review. This time around, I’m thinking about how rather than reflecting on the year so far, it’s time to adapt to a new and different future. I had prepared a blog post about how my income expectations faltered as the pandemic set in. However, because so many people ended up needing help straightening out their books, I blew my original income goal out of the water! My point with this post was going to be how important it is to not let a dismal situation limit your expectations for your business. But, at this moment, I think there’s something deeper to learn. In these rapidly-changing times, it’s important for us to adapt and be gentle with ourselves.

No More “Business As Usual”

Despite the many plans for re-opening the U.S., for many of us, things are not going back to normal. Perhaps you already know this from looking at your bottom line. Or maybe you’ve seen reports about how small businesses have been affected at large. The economic effects and social effects of recent times have created a lasting change in the small business landscape. It’s important for us as business owners to prepare for things to continue to change. This can look a myriad of ways. Creating a money system and putting together a savings cushion are two great strategies for establishing financial resiliency if you want extra ideas.

Just because things aren’t going back to normal doesn’t mean it’s all doom and gloom, though. Aside from the economic effects, both the pandemic and the recent Black Lives Matter protests have also enriched the business landscape from a social perspective. There are so many opportunities for collaboration! Now more than ever, we have an opportunity to lift each other up. If you want more ideas for collaboration, check out my article on 7 Tips for Business Owners During COVID-19 and my Cash Flow Reboot Guide.

Be Gentle

Don’t be hard on yourself if you don’t meet your income goals or if your business is struggling. Conversely, if you find yourself getting a ton of business as a result of the pandemic, don’t work yourself too hard, either! Coping with changes in your business can be challenging. Giving yourself the space to be present with feelings that come up and get enough rest are of paramount importance. The reality is that, no matter how hard you grind right now, in many cases things are still going to be challenging. This is a hard time in the world for most people, solopreneur or not! Be gentle in your expectations of yourself as best you can.

Be Present

In addition to stepping up to give your emotions some space, this is also a time step up for your community as a business owner. The current moment we are in is showing us many ways to do this. Whether we choose to uplift Black colleagues, create fundraising projects, or present some offerings for free, we’ve got options in how to contribute. I think that, if we want to, we can use this moment to permanently change how we do business. I love the way that Proposals for the Feminine Economy frames businesses – as “needs-fulfillment machine[s].” How can we find ways to do business that meet, not only our own needs, but the needs of those around us? Both COVID-19 and the Black Lives Matter protests have shown us how connected we all really are – socially and economically. This is a question we can sit with right now.

What are your thoughts about business as usual? Has your business experienced any bumps in the road? Please sound off in the comments below. If you’re feeling in need of more guidance on how to navigate this time, don’t hesitate to check out my services and schedule a call.

☮

Angela

Image by Christin Hume

By |2020-06-23T22:04:25-07:00June 23rd, 2020|Categories: Financial Clarity, Money Mindset, Small Business, solopreneurs|Tags: , , , , , , , , , |0 Comments
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Solopreneur Spotlight: Jennifer Graham On Coping With Business Changes During COVID-19

Jennifer Graham made a number of pivots in her business to adapt to COVID-19. While we discussed her business strategies last week, this week I want to highlight the emotional strategies she discussed with me. Being a business owner during this time has been hard on many of us, and the thoughts she shared about taking care of her own wellbeing were full of insights we can all use. Taking care of our emotions allows us to be smarter with our finances, so I believe prioritizing our feelings during this time is key to preserving our businesses.

Acknowledging Grief

The first thing Jennifer mentioned doing once shelter in place went into effect, was acknowledging and holding the grief that came along with it. In addition to all the other abrupt changes, Jennifer lost a lot of photoshoot work, and experienced a total change-up in her calendar. Many people have been experiencing grief during this period, and Jennifer took time to acknowledge and care for hers.

Taking Care

During our interview, Jennifer brought up a couple other practices that have helped her take better care emotionally. First, she said making a practice of acknowledging her feelings, and asking herself “What would bring you joy right now?” has helped her stay centered. Sometimes that might be stepping away from her work to nap or take a walk, and she allows herself to do that. She also mentioned that really acknowledging the work she is doing has been helpful. Many people are currently describing their days as blurs, so perhaps this practice can help remedy that feeling.

Lastly, she mentioned working with a team of people, namely her therapist, business coach, and myself, as being particularly helpful during this time. I’ve written a few articles about how relying on a money team or money buddy can ease the decision making process and alleviate hard times. It’s great to see that Jennifer is leaning on others when it comes to making decisions for her business.

Making Space for Ideas

All this emotional self-care is part of what made it possible for Jennifer to adapt her offerings to current conditions. She relayed to me that “about 3 weeks in, the ideas just started coming,” and from there she was able to create new services that were shelter-in-place-compliant. This nimble and creative thinking is especially valuable at a time like this. Because Jennifer is able to acknowledge her feelings and tend to them, she has more mental space available when it’s time to get to work.

You can read part one of this series on Jennifer’s business here, and watch the full video interview too. You can also visit her site, her Facebook page, and her Instagram feed to learn more about what she offers. If you’re interested in a guide for business owners on adapting COVID-19, my Cash Flow Reboot Guide is available for a free download here.

☮

Angela

By |2020-05-21T16:41:26-07:00May 21st, 2020|Categories: Money Mindset, Small Business, solopreneurs|Tags: , , , , , , , |0 Comments
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Why Hiring a Financial Coach Is Worth It

Having someone to talk to openly about your money is an invaluable resource. When that person also helps you set goals and untangle financial knots, that’s even better! Hiring a financial coach can be well-worth the investment. Coaches can help you break through emotional and logistical roadblocks to set up better systems in your business.

What Does a Financial Coach Do?

A good financial coach will work with you in a way that’s personalized to your needs. Their presence and the tools they use help provide structure for you to reach your desired goals.

They also provide nonjudgmental listening and act as a sounding board for your financial concerns and dreams. Given the opportunity to talk through these things, many people begin to work through their emotional blindspots and start making more logical financial decisions. A good financial coach guides this process in a structured and goal-oriented way. For example, they can help you determine a revenue target intended to help you reach other goals in your life. They can also help you test out new ideas for your business and help you tinker with your profit model.

What Do You Gain From This?

Some business owners balk at the expense of hiring a financial coach. The irony of this is that working with a coach can help you increase your profit margins. Like a bookkeeper, hiring a coach can be viewed as an investment in the longterm profitability and wellbeing of your business.

Aside from increased profits, working with a coach is also an opportunity to gain financial clarity. You can work on any emotional baggage you have around money, determine where the money from your business should go to best serve you, or find a way to spend more time attending to your favorite parts of the business.

If you appreciated these ideas, try checking out my service packages. You can schedule a free curiosity call with me to chat about whether working with a coach is right for you.

☮

Angela

By |2020-02-28T20:48:51-08:00February 28th, 2020|Categories: Financial Clarity, Money Mindset, Small Business, solopreneurs|Tags: , , , , , , |0 Comments
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All About Oversaving, And Why Overcoming It Can Strengthen Your Business

Often issues with money stem from not having enough – so when you hear the word “oversaving,” it might not sound bad. However, oversaving can be a serious issue that may be blocking the potential of your business. It may also point to anxieties that need to be resolved. Let’s take a look at what oversaving is and what you can do to overcome it.

What Is It?

If you experience anxiety or guilt over spending money, even on basic necessities, you may have oversaving tendencies. You might struggle to spend money on your business or operating expenses. Alternatively, it might be hard for you to spend on something other than reinvesting in your business. Or, you might have a hard time parting with any money know you could save it for retirement or business emergencies.

Oversaving both stems from and enhances anxiety, stress, and burnout. It often comes from a fear of scarcity. While saving money is an important skill, if it’s taken to an extreme, it can keep you from spending money to solve urgent problems in your business and your personal life.

What Can You Do About It?

Saving money is a great habit, but the key to overcoming the oversaving habit is to get strategic about your saving. Rather than living in this panicked feeling of “I have to save every dime I possibly can,” create some money systems! Coming up with savings goals, establishing a spending plan, and automating your money are all great ways to introduce strategy and systems. 

Savings goals can be especially helpful, because they can lend purpose to all that saving, but they also create an end point you’ll eventually meet. Limiting and directing your savings in this way can help curb the habit and assuage your anxieties. When you use the Profit First system, you put aside money to pay yourself first, but you also save for taxes, put aside money for operating expenses, and also distribute profits every quarter, which are meant to be spent by YOU so you can reward yourself for your hard work. If you’re interested in learning more about the Profit First System, check out the first 5 chapters of the book here.

Doing some emotional work around money can also really help you clear up your oversaving. I recommend reading Bari Tessler’s The Art of Money for more ideas about this. She helps you unpack your feelings around money and combining the practical with the emotional. If you’re interested, check out my book review.

Oversaving can be a sneaky habit, difficult to catch and overcome, but I believe in you – you can do it! And anyway, saving is so much more effective when it’s done in order to meet a goal. If you enjoyed this article, I suggest looking into Profit First. If you want to chat more about these ideas and take a look at your money, you can take a look at my service packages and book a call. Doing a year-end review could help you identify a couple goals to save for!

☮

Angela

Photo by Sharon McCutcheon

By |2022-01-12T10:57:45-08:00December 19th, 2019|Categories: Personal Savings, Personal Spending, Profit First|Tags: , , , , , , , , , , , , , , |0 Comments
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Why Your Finances Might Be Feeding Your Impostor Syndrome

If you’re not aware of how your business finances look, it might be feeding your imposter syndrome. Ignoring the financial side of your business prolongs the anxiety that surrounds that part of your life as a business owner. Impostor syndrome can be detrimental to your business. It undermines your success and obscures opportunities for growth. Let’s take a look at the different ways impostor syndrome affects your business.

Anxiety

Impostor syndrome is commonly marked by a feeling of not fully trusting your own success. This anxious feeling says “Don’t let them find out who I really am!” and fails to recognize all your accomplishments. If you feel uncertain about your business finances, this takes a toll on your stress and anxiety levels. Consequently, your relationship with your business can feel increasingly strained and uncomfortable. Financial uncertainty and related stress can create a vicious cycle.

Under-Compensation

If you’re not looking closely at your business finances, you might be under-compensating yourself without even knowing it. Whether your prices are too low, or you need to cut back your operating expenses, you may be underpaying yourself. Finding yourself scrambling and struggling to get work done for less pay than you need is disappointing for many business owners. It can add to your feeling that you aren’t truly succeeding.

The Solution: Look at Your Finances

In short, there’s a feedback loop between your finances and your identity as a business owner. Therefore, the best thing to do is to really look at your business’s finances. If you feel underpaid, research changing your prices. Study your personal lifestyle and establish an income goal, and then look for ways your business can bring in that income. Go over your business expenses with a fine-tooth comb. Most importantly, remember that there are solutions to your financial woes, ones that you have the ability to find and implement! I believe in you!

If you want more of my thoughts on this, check out this facebook live video I made on the topic.

☮

Angela

By |2022-01-12T11:02:01-08:00November 26th, 2019|Categories: Financial Clarity, Money Mindset, Small Business, solopreneurs|Tags: , , , , , , , , |0 Comments
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