If you’re a business owner or entrepreneur, you may already feel like the boss of your money. After all, you’re pretty much solely responsible for what goes in and what comes out, right? But as many entrepreneurs and biz owners know, that can also lead to a lot of stress. In many cases, taxes aren’t withheld, revenue can vary from month-to-month, and it always seems like there’s a new bill to pay. So how do you feel like you’re REALLY the boss of your money, rather than holding on to money for a while before it goes out the door again?
That’s what we’re talking about on this episode of Worth It. In it, we explain what business owners and entrepreneurs need to pay attention to in regards to their money and income, and what they can do to gain control.
[00:51] What symphonies and maestros have in common with your money
[01:05] Why taking control of your money will help you personally and professionally
[02:05] A cautionary tale of what can happen when you don’t tell your money what to do
[03:02] The downfalls of 1099 income
[05:18] Why planning for taxes is non-negotiable
[06:21] Why changing the way you think about taxes is important
[06:49] The importance of knowing your (and your employees’) salary
[07:39] Why you need a snapshot of your income and expenses (steady vs. variable)
[10:43] 3 ways to be the boss of your income
[10:48] The importance of treating your money like a full-time employee
[11:51] How to set up a “mothership account”
[13:16] What you should include in your sub-accounts
[14:38] How this “mothership” approach helps you embrace a profit-first model
[15:00] How to start thinking of your income as “net” instead of “gross”
[16:03] Why you should view expenses like healthcare, taxes, and salaries as part of doing business
How many times have you been trucking along, thinking you’re doing pretty well with sales or client work, only to find out that you have a big fat bill to pay at the end of the month? Or maybe you’re like Danielle’s friend who didn’t realize she had to pay taxes out of her 1099 income… and had a hefty check to pay at the end of the year.
That’s why the first step to being the boss of your money is to figure out taxes, hourly contractor rates, healthcare — all the things that come out of your business income. This way, you can make sure that what you’re making, what you’re taking home, and what you owe (to the government, your healthcare plan, your workers, etc.) are all accounted for.
Other things you need to pay attention to as a business owner:
Once you have those numbers and you are for sure paying yourself a salary (nope, this is non-negotiable), you can finally have a better picture of what’s going in and coming out. You’ll also know exactly what to set aside each month to pay at least the non-variable expenses, like your salary, your office rent, your software costs, etc. That brings us to the second part of our podcast discussion….
Having an accurate picture of your numbers is a great start. But what do you do to make paying those bills and saving that money easier? Here are some actionable tips that can help:
This was a quick and dirty episode, but we think the tips are super valuable. If you’re struggling to feel like you have “money in the bag,” this is definitely an episode for you. And even if you’re a traditional employee, you should check out this episode so you can get a feel for what you can do with the money that’s leftover on your paycheck.
Our hope is that you can implement these tips into your life and business today, so you can stop feeling so out of control — even if your income and expenses vary. It doesn’t have to feel so chaotic, y’all!
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