How to Create Your Own Paycheck Using a Money System

 

I know you like being your own boss, but do you ever have paycheck envy? Do you ever wish you could get a paid vacation? Do you get tired of the feast or famine in your personal income? Especially with creative or freelance work, this can be a real issue for some of us. Fortunately, when you create money systems around your business income, you can create a solopreneur paycheck, by paying yourself first.

The System

Setting up a paycheck for yourself is simple. Every time you collect income, set aside a portion in a separate account just for your pay. Then pay yourself out of that account, but leave a portion in the account. The balance in this account will build over time so that you eventually have a cushion built up to even out dips in income, or even pay yourself while you take a holiday.

Determining Amounts

How much should you pay yourself each round? A good place to start is keeping track of your personal expenses and ensuring you cover those every month. After that, it’s a simple question of what to do with any extra income you may have made that month. You may choose to leave it all in the account to build up your balance, or take out an extra allowance if you’ve earned a reward. Setting up reward systems for yourself can be another motivator to keep your money systems consistent, organized, and ensure they meet your needs.

More in-depth information on creating a solopreneur paycheck can be found in my money mapping series. Part II discusses setting up a solopreneur paycheck in the context of your larger money system.

If you liked reading this, you might enjoy my free eBook, the Cash Flow Reboot Guide. This resource gives you a bunch of actionable steps to take to ensure that your business can thrive through times of financial uncertainty. Click below to grab your free copy!

By |2022-04-11T12:05:06-07:00April 11th, 2022|Categories: Profit First, Small Business, solopreneurs|Tags: , , , , , , , , , , |0 Comments
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5 Steps to Get Ready for Tax Time

Yep, it’s that time of year again! As a small business owner, or let’s face it, just as an individual, tax time can be stressful.  But there are ways to reduce that stress and be ready for tax time before you know it.  As a former tax preparer and practicing bookkeeper, here are my top suggestions;

#1 – Designate a folder or box for all the mail that arrives regarding taxes.  You don’t even have to open the envelopes just collect it all in your “spot”.  Super simple!

#2 – If you are doing your banking online, you are probably getting email notifications that your tax statements are available.  I like to flag these emails as they come in and then sit down when I have some time later in the week to go back through the emails, log in and download each statement from the bank.  Save all of these to a file folder you’ll call 2017 Tax Documents.

#3 – If you are running a small business (and a side hustle does count), please, please, please tell me you have been running that business out of a bank account separate from your personal spending.  If not, go open that separate account right now!  If so, you can easily determine your income and expenses for the year by reviewing your bank statements.  Better yet, if you are running your business on an accounting platform such as Quickbooks Online and you have updated and reconciled your accounts, those reports are right at your fingertips.  I do suggest that you start this step in January just to give yourself plenty of time.

#4 – You should have received all of your tax mailings by mid-February. If your tax preparer is going to want everything in electronic form (or you just want to stay super organized) scan all of your paper statements and add them to your 2017 Tax Documents folder.

#5 – Grab a copy of last year’s tax return and review the entries you had last year.  Or if you have a digital file from last year, compare the statements with the information you have for this year.  This can jog your memory so you know you haven’t missed anything.  The last thing you want is to have to file a corrected tax return because you left something out, so just take the time and make sure you’ve got all of your information.

You did it!  You are ready for tax time!  And if #3 is causing you to pull out your hair, maybe it’s time to talk to a professional to help you set up a system or to decide if you are ready for ongoing proactive bookkeeping.

If you’re looking for a resource that can help you think about the connection between getting organized and taking care of yourself, I’ve got just the thing. 9 Secrets to Financial Self Care is available for free download, click below!

This post was originally published in February 2018

By |2022-03-15T14:01:47-07:00March 15th, 2022|Categories: Taxes|Tags: , , , , , , , , , |0 Comments
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My #1 System for Achieving Financial Goals

You reach your goals if you work on them regularly. Things happen one day, one week, one month at a time. So, it might come as no surprise to you that my #1 system for achieving financial goals is making regular time for financial self care. I’ve seen this work with many clients and know that in personal experience, this is what works best for me. This approach is backed by many achievement experts, like Gary Keller. In The One Thing, he suggests setting a single goal and then suggests scheduling focused time to work on it into your calendar and protecting it.

Make financial self care a habit! I frequently suggest checking in with your finances on a weekly basis, but another time interval might work well for you too. Since we’re thinking about self care, consider your weekly financial check-in a part of your overall self care routine. Just like you manage your time and your physical health with self care, your money is a resource to manage and use to your best advantage. Use your regular “money time” to work towards your financial goal. 

Here are a couple suggestions of things to do:

  • check in on your spending for the month to see where you’re at with your spending plan
  • check in with your financial goal for the month
  • talk to your money mentor or your partner
  • spend time learning about finances
  • do any finance-related admin work you need (paying off bills, sending off IOU’s, billing clients, etc.)

Most importantly, make sure this time is enjoyable so you can keep coming back to it every week. Try to limit the amount of time you spend, so that you finish off your money time by completing a task. I suggest starting with twenty or thirty minutes and slowly increasing the amount as your finances become more interesting for you to work with. Pro tip: when you end on a high note, it’s easier to keep the habit going. And don’t forget to reward yourself for sticking with this habit!

If you liked this article, you’ll probably like my free e-Book, 9 Secrets to Financial Self Care. Click here to download.

By |2022-01-28T13:23:15-08:00January 27th, 2022|Categories: Financial Clarity, Money Mindset|Tags: , , , , , , , , |0 Comments
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Use Clear Record-Keeping To Amplify Your Business Profits: Here’s How

You’ve probably heard the saying, “Where attention goes, energy flows.” This quote, which I first heard from Michael Bernard Beckwith, perfectly describes the relationship between you and your finances. The more you pay attention to them, the more you will see growth and change. I’ve seen this happen with clients over and over.

This is especially the case with record-keeping. Regularly tending to an organized bookkeeping system for your business will have a positive impact on your bottom line. This is something you see the best results with if you stick with it long-term. It requires effort on the front end to set up a system that works for you. And, it’s absolutely worth it. Let’s talk about the how and the why of clear record-keeping.

How Do I Keep Clear Records?

First, separate your business finances from your personal finances. There are many excellent reasons to do this, and two different methods that I recommend to clients based on the size of their business. You can read all about that here.

Next, set up a system. You might think this just means finding some record-keeping software, but we’ll get to that in a minute. Your software is just one part of your larger money system. What you want to do at this stage is set up a money map to help you visualize where money goes in your business. You can read my full series on money mapping here.

Once you’ve visualized and established an overall flow of money in your business, get into the nitty gritty and set up your software. My top two recommendations for business tracking are MoneyGrit.(R) and QuickBooks Online. I wrote a longer post comparing softwares that you can read here to get more info about both.

Finally, I highly recommend consulting with a professional to review your system and make sure everything is set up properly. Reviewing your books with a bookkeeper a few times a year can also be beneficial. You can read my article on working with a bookkeeper to learn more.

Now that we’re clear on the how, let’s talk about why prioritizing clear record-keeping can benefit your business.

Analyze Your Data

Your financial record-keeping is a data source in your business. By having clear records, you can start to trace the revenue trends in your business. You can use this data to analyze what offerings are the most profitable, and what expenses bring you the best returns. If you want to know more about this, read my article on how to focus your offerings to create more revenue.

Reduce Stress at Tax Time

Besides offering you key insights that can help you create a more profitable business, clear record-keeping also makes all your necessary tax-time info readily available. This can be a time- and money-saver, because you don’t have to hire someone else to untangle your mess at the last minute. Besides those obvious savings, the value of reducing your stress is also not to be underestimated!

If you appreciated learning about clear-record keeping and want to take the next step in setting up your system, you might consider working with me to do a Quickbooks training. I love working with solopreneurs to make sure they are set up for success. Schedule a free Financial Self Care Consultation here!

☮

Angela

By |2022-01-12T10:32:45-08:00September 17th, 2021|Categories: Bookkeeping Business, Small Business|Tags: , , , , , , |0 Comments
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How to Use Money Mapping To Give Back

At this moment, we are being called to give money to many different places. Community organizations need resources to respond to COVID-19, and so do many different non-profits, scholarship funds, etc. On top of that, the worldwide movement for Black lives has sparked a renewed need for donations. Last week, I discussed how a business owner can leverage their business to rise to this moment. Today, I want to talk about giving. Specifically, how to use money mapping to know how much to give!

Money Mapping: A Crash Course

If you’re not familiar with the term money-mapping, it’s essentially a visual way to track and create a system for your money. When I work with my clients, we create these systems for their business together. By figuring out how much money you need to cover taxes and business expenses, you’re then able to see what’s left over. How you allocate that money is up to you. Typically it’s split between profit and pay for the business owner. In this article, I’m going to discuss how you can carve out a chunk of that money for donating to organizations you want to support. Earlier this year, I wrote a series on how to implement money-mapping for your business and personal finances; read that here. Here’s a diagram to give you a better picture of what I’m talking about.

Factoring in Giving

There are several different ways you can factor giving into your money map. If you’d like the donation to come directly from your business revenue, perhaps you decide that the 5% in the profit account will go to a certain organization. Depending on your flexibility, you could also simply choose to add another account altogether, and split up your revenue five ways instead of the four outlined in the diagram above.

If you’d prefer to give from your individual finances, your options are similar. Perhaps you can carve the donation from your savings allocations (perhaps replace “new mattress”). Or, you can choose to make room in your living expenses, provided you have that flexibility.

Sticking to a Timeline

When using the money mapping system, it’s good to use a timeline to know when it’s time to examine your accounts and move or use money that’s collected there. In my work with clients I usually suggest that they move or use the money in their profit account on a quarterly basis. If you’ve decided to use this money for donations, perhaps you can set up a system in your business to switch up where those donations go every quarter of the year.

Why Use This System?

Using money-mapping and seeing your donation as a percentage of your overall income strengthens the power of your giving. It helps you see exactly how much you can afford to give, and helps you make mindful choices about amount, rather than purely emotional ones. It can be helpful for people who are prone to over-spending and those prone to over-saving. Looking at your money as a full system also helps you assess your values and re-structure your priorities if needed. If you decide you’d rather donate to Black Lives Matter than eat out in the month of June, referring to your money map can help you make and track that choice.

If you’re looking for places to donate money to in order to support the movement for Black Lives, please consider checking out these organizations:

Happy giving!

☮

Angela

Image By:  Milada Vigerova 

By |2020-06-17T17:40:33-07:00June 17th, 2020|Categories: Uncategorized|Tags: , , , , , , , , |0 Comments
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5 Steps to Get Ready for Tax Time

Yep, it’s that time of year again! As a small business owner, or let’s face it, just as an individual, tax time can be stressful.  But there are ways to reduce that stress and be ready for tax time before you know it.  As a former tax preparer and practicing bookkeeper, here are my top suggestions;

#1 – Designate a folder or box for all the mail that arrives regarding taxes.  You don’t even have to open the envelopes just collect it all in your “spot”.  Super simple!

#2 – If you are doing your banking online, you are probably getting email notifications that your tax statements are available.  I like to flag these emails as they come in and then sit down when I have some time later in the week to go back through the emails, log in and download each statement from the bank.  Save all of these to a file folder you’ll call 2017 Tax Documents.

#3 – If you are running a small business (and a side hustle does count), please, please, please tell me you have been running that business out of a bank account separate from your personal spending.  If not, go open that separate account right now!  If so, you can easily determine your income and expenses for the year by reviewing your bank statements.  Better yet, if you are running your business on an accounting platform such as Quickbooks Online and you have updated and reconciled your accounts, those reports are right at your fingertips.  I do suggest that you start this step in January just to give yourself plenty of time.

#4 – You should have received all of your tax mailings by mid-February. If your tax preparer is going to want everything in electronic form (or you just want to stay super organized) scan all of your paper statements and add them to your 2017 Tax Documents folder.

#5 – Grab a copy of last year’s tax return and review the entries you had last year.  Or if you have a digital file from last year, compare the statements with the information you have for this year.  This can jog your memory so you know you haven’t missed anything.  The last thing you want is to have to file a corrected tax return because you left something out, so just take the time and make sure you’ve got all of your information.

You did it!  You are ready for tax time!  And if #3 is causing you to pull out your hair, maybe it’s time to talk to a professional to help you set up a system or to decide if you are ready for ongoing proactive bookkeeping.

☮

Angela

By |2022-01-12T10:39:33-08:00March 12th, 2020|Categories: Taxes|Tags: , , , , , , , , , |0 Comments
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To Find Clarity and Focus, Do a Mid-Year Review Pt. II

This is part two of a two-part series on doing a mid-year review of your business! You can find part one here. 

So, now that you’ve reviewed your work so far and adapted your strategies and goals appropriately, it’s time for the next few steps. These are intended to really up the feeling of getting a fresh start, while enjoying your business for what it is: a way to meet your life goals.

Refresh

For an extra dash of clarity and focus, include a refresh in your review process! Now is the time to do whatever necessary maintenance you might need to grease the wheels of your business. You might clean your workspace, clear your inbox, or centralize your passwords. Attend to your physical and digital spaces. Check in with your finances, and schedule an appointment with a bookkeeper. 

This is usually my favorite part of the review process, because I make time to do all the little things that have been nagging me, like scheduling lower priority appointments, finding that one piece of paper, and sometimes making a new goal chart for myself. Giving yourself the time and space to get organized can save you time and effort down the road. It can also add ease to your everyday business functions – which is an added bonus!

Celebrate

Go back to step one, and take stock again of all you’ve done this year, including this review process. Chances are, you will find you’ve done quite a bit of work towards your goals, no matter how close you might be to completing them! Take some time to celebrate all the work you’ve done. Treat yourself to an afternoon off, a fun or inspiring event, or whatever you’d like to do to celebrate your achievements so far! Being a self-starting solopreneur is hard work. If you’ve done the work, you deserve to cheer yourself on once in a while.

If you busted through this whole review process, congratulations. I’d love to hear from you about how your business functions going forward, or if there are any little things you’ve added to the process. Just leave a comment below or shoot me an email at angela {at} atpeacewithmoney.com. If you think you could benefit from working through this process with an accountability partner, you know where to find me – just check in on my Services page.

☮

Angela

Image Source: Emma Matthews

By |2019-06-27T20:35:35-07:00June 27th, 2019|Categories: Financial Clarity, Money Mindset, Profit First, Small Business, solopreneurs|Tags: , , , , , , , , , , , , , , , , , , , , , , , , , |0 Comments
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To Find Clarity and Focus, Do a Mid-Year Review

Goal motivational quote

We’re six months down the line. How are you doing with your goals? Have you totally crushed them, worked on them bit by bit, or are you not sure? In the thick of things, sometimes our focus on our goals can get a little murky. Here’s the first two steps of a two part series on doing a mid-year review (steps 3 & 4 can be found here). Let’s jump in:

Review

Step one in a mid-year review is the review, of course! When you take a look at the goals you’re working towards, it’s easy to get bogged down by focusing on what you still need to do. Instead, train your focus on what you’ve already done.

Start by making a list of milestones you’ve hit or steps you’ve completed. Rifle through your day planner or old to-do lists if you need a refresher. Go back through the year, month by month.

Now, it’s time for a little introspection. Take stock of all the actions you’ve taken towards your goals, and then ask yourself a few questions: How do I feel about this goal? Do I still want to achieve it by the end of the year? Is that feasible? At what pace have I been able to work toward this? What’s my capacity been like?

Don’t be afraid to drop things or add new things. Some goals may simply no longer excite you, or you may have realized that another achievement is more important or time sensitive.

During this review process, it’s also helpful to take a look at the systems and work routines you have in place for your business. For example, you may have set an intention to review your numbers once a week, or you may be trying out the Profit First system. Evaluate the effectiveness of your systems and routines. Are they working for you? Do you have time to do these things? Are you consistent? You may find that your routines need to be simplified or tweaked to be more pleasant. Or, you might find that your systems and routines are working just fine! Both are vital evidence when checking in on your business.

Learn and Adapt

Next, it’s time to use all of that evidence you’ve gathered to adapt your goals and practices. First, notice if you have any goals that you are either discarding or adding. Next, examine the pace at which you’ve worked on your goals. These pieces are important when it comes to planning out the rest of your year.

I recommend drawing or writing out a map for the next six months. Include any events relevant to your business, like conferences, trade shows, or gallery openings. Then, begin to write in milestones you hope to meet in the next six months. Make sure these are realistic! Don’t pressure yourself to level up in three months if it took you six to get where you are now. Instead, allow yourself the space and time to achieve things incrementally.

When you’re making your plan, be sure to adapt your goals to what’s worked so far this year. If you really love a certain routine or feel fired up to keep working toward a certain goal, go for it. If you’ve stalled on a project because you need to do more research, carve out some time to go back to the drawing board. When charting your course, keep your own needs and preferences in mind.

The next two steps will coming out in part two of the series, but I think this gives you enough to chew on for now! If you haven’t yet set goals for your business, or would like some more help thinking them through, check out my article Set Informed Income Goals. And of course, I am happy to walk through the goal setting process with you. All three of my service packages are focused on helping you set, work towards, and achieve goals. If you find you might appreciate some accountability or guidance, head on over to my Services page and schedule a curiosity call. 

☮

Angela

Image Source:  S O C I A L . C U T

By |2022-05-12T13:55:30-07:00June 20th, 2019|Categories: Financial Clarity, Money Mindset, Profit First, Small Business, solopreneurs|Tags: , , , , , , , , , , , , , , , , , , , , , |0 Comments
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Create Your Own Paycheck

A Solopreneur's Paycheck: At Peace With Money

I know you like being your own boss, but do you ever have paycheck envy? Do you ever wish you could get a paid vacation? Do you get tired of the feast or famine in your personal income? Especially with creative or freelance work, this can be a real issue for some of us. Fortunately, when you create money systems around your business income, you can create a solopreneur paycheck, by paying yourself first.

The System

Setting up a paycheck for yourself is simple. Every time you collect income, set aside a portion in a separate account just for your pay. Then pay yourself out of that account, but leave a portion in the account. The balance in this account will build over time so that you eventually have a cushion built up to even out those rough patches and even pay your self while you take a holiday.

Determining Amounts

How much should you pay yourself each round? A good place to start is keeping track of your personal expenses and ensuring you cover those every month. After that, it’s a simple question of what to do with any extra income you may have made that month. You may choose to leave it all in the

Create Your Own Paycheck: At Peace With Moneyaccount to build up your balance, or take out an extra allowance if you’ve earned a reward. Setting up rewards systems for yourself can be another motivator to keep you money systems consistent, organized, and ensure they meet your needs.

More in-depth information on creating a solopreneur paycheck can be found in the Profit First Book. The first 5 chapters are available to download here on my website. If you’re intrigued by this idea and think you might benefit from a consultation with me, don’t be afraid to reach out and book a discovery call!

☮

Angela

Image Sources:  Cody Davis,  rawpixel

By |2018-11-08T19:58:06-08:00October 4th, 2018|Categories: Profit First, Small Business, solopreneurs|Tags: , , , , , , , |0 Comments
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