Whether you’re a homeowner, business leader, or just an everyday person trying to navigate life, you’ve got money on the mind. It’s a source of stress for everyone at every level, but there are ways to make it easier to manage.
With a few key principles and mindsets, you can be a master of money instead of letting it cause unnecessary problems at work and at home.
If you’re looking for some advice, here is what money-wise business leaders have to say about saving, spending, and understanding finances in the current economic climate.
We automate so many aspects of our lives to save time and make things easier. Why not take full advantage of automation for something like finances?
Auto-pay bills, send money to your investment accounts instantly and automate things like payroll or expenses every month. The technology is there, and it works – use it.
“Automate reports as much as you possibly can,” said Adam Reed, CEO of Crown and Paw. “I like to use Glew.io (this is not an affiliate endorsement, I just like them) to automate reports on our brands as well as the company as a whole. I can see a snapshot of the previous day’s profits with a click of a button and it saves me a lot of painstaking data entry.”
When you start embracing automation, you’ll wonder why it took you so long to start.
Check Monthly Bills
There is a dark side to automation that we all need to consider. When you auto-pay for services each month, you might find that some expenses fly under the radar and deplete your cash fast.
Don’t forget about that you’ve automated and be sure to cancel everything you don’t use to the fullest – at home and at work.
“When re-evaluating your household budgets this spring, make sure you aren’t overpaying on recurring bills like streaming services, Wi-Fi, and insurance,” said Tyler Boyd, Chief Strategy Officer at Squeeze. “Apps like Squeeze can help you stop overpaying on your monthly bills by shopping for the lowest rates and letting you compare quotes right from a personalized dashboard. At Squeeze, it isn’t just about getting the lowest price – our experts help determine your needs to ensure that you get the most value for your buck.”
Always print off those bank statements so that nothing sneaks by you at the end of each month.
You aren’t going to solve all your financial woes overnight, but you can set a master plan and make steady progress every single day.
Simply having a plan in place can dramatically reduce your anxiety about money and improve your relationship with saving and spending.
“The best way to stick to any goal you set, financial or not, is to allow yourself room to learn, grow, and make changes where needed,” said Jing Gao, CEO of Fly by Jing. “If you set tons of goals right off the bat, the likelihood of you sticking with them decreases significantly. So, take it slow. Inform yourself of all your finances throughout a typical year, set goals within your means, and don’t be hard on yourself if you slip up occasionally. Also, allowing yourself to take things slow leaves you with options to switch up your goals if need be. Not every goal we set for ourselves ends up being realistic— we tend to be more ambitious at the beginning of the year.”
Made a mistake? Learn from the lesson and keep moving rather than dwelling on the problem,
What’s the best way to feel like you’re more in control of a situation? Take one small action each day and repeat it until you build confidence to take on bigger goals.
What used to seem intimidating will soon be easy as pie.
“I think it’s important to set some lenient goals for yourself,” said Jim Beard, COO of BoxGenie. “The state of the economy is pretty much up in the air for next year, so allow room for change and deviation in your resolutions. Start with your short-term goals and work your way up to the long-term goals at the beginning of the year. If you don’t want to be attentive to these goals at all times, I’d recommend automating some of your finances. It takes a lot of stress off of due-dates!”
When your goals are manageable and achievable, you naturally gain momentum and take on bigger challenges without a second thought.
Let’s say you’re not the most gifted financial manager or you never went to school for accounting. That’s okay! Most people don’t have time for that stuff, which is why outsourcing finances is such a popular practice.
“A lot of people think of outsourcing as a cop-out or compromise on quality, but that’s just not the case in the age of online business,” said Sarah Morgan, CEO of Even Health. “Outsource operations if you need to, especially when it comes to number-crunching stuff and financials. This will free up a lot of time and energy for you and your team. This goes for personal life and business as well.”
When you outsource properly, it’s an unbelievable relief for your mind and overall wellbeing.
Everyone has a weak point when it comes to spending, and it can be tough to confront. Spending is linked to feel-good emotions and comfort, so that makes it even harder to break away.
Identify your areas of overspending and make one or two sacrifices rather than trying to be “perfect” all the time.
“There are a lot of ways to cut your costs,” said Benjamin Smith, Founder of Disco. “Most of us overspend in little ways that amount to a lot of wasted cash. That’s what we call throw-away spending. ‘Oh, it’s just a couple more dollars.’ ‘I’ll just get it, it’s only $5 dollars.’ These are the common phrases we say to ourselves in the stores or online shopping but the only problem is we do it 5 days out the week. If you really sit and do the math, you would find those little extra splurges hit your pockets. Once you shave down your extra expenses, you can reallocate the excess funds for savings and investments.”
With this approach, you’ll be happier with your finances and probably healthier too.
Whether you’re running a business or household, there’s no predicting when a huge expense might show up out of nowhere.
That’s why we all need a “rainy day” fund and keep a more flexible budget. Anything can happen, and having cash on hand never hurts.
“Allow your finances to be on a rolling budget,” said Nik Sharma, CEO of NSharma. “You simply cannot expect to foresee every roadblock in your financial future so you should keep your budget flexible enough that you can allocate for the surprises. Staying on a rolling budget will prepare you for the inevitable fluctuations you are bound to experience.”
The peace of mind you get from proper budgeting can’t be overstated – do it just for that.
Don’t Fear Frugal
Not everyone is keen on the word frugal, since it evokes thoughts of being miserly or not having any fun. In truth, it’s a powerful word that you should learn to embrace and discover its true meaning. At the end of the day, it’s all about choices and cost/benefit analysis.
“Frugality isn’t about cutting your spending on everything,” said Bestselling Author and Consultant Ramit Sethi. “Frugality is about choosing the things you love enough to spend extravagantly on – and then cutting costs mercilessly on the things you don’t love. The mindset of frugal people is key to being rich.”
The paradox is that the richest people in the world spend wisely and make conscious choices about everything they buy, despite what you might see in the media.
Worth the Price
Your business can go far if you simply buckle down and put 100% of your passion into the project. However, you’ll need to make a cash investment at some point, whether it’s your own money or someone else’s.
“We’ve all heard that old saying that you have to spend money to make money,” said Rachel Jones, Head of PR at Hope Health Supply. “And if you have discovered anything during the pandemic, it should be that your visibility is important – even if it does come at a price. Continue on with your marketing strategies, and ensure that you grow your brand recognition. Now is not the time to hit the pause button, as your customers will need to know that you are here for the long-term.”
Pinpoint the areas in your business that need a cash infusion, and don’t hesitate to spend ASAP.
Watch for Patterns
The way that customers purchase your products can tell you a lot about how to save and spend your capital. If you can figure out these patterns (timing, buying in bulk, referrals, etc.) you gain a critical edge and will make the most of every dollar spent.
“To be sure that you’re focusing your budget in the right areas, pay very close attention to your customers’ purchasing patterns,” said Jared Zabaldo, Founder of USAMM. “When ecommerce is still a bit unsteady for many niches, it’s important to stock up on the products that your customers are interested in, so that you can retain their business. This also means to refrain from ordering too many of those products that don’t always fly right off the shelf.”
Use analytics and reports to your advantage to catch these patterns and capitalize with custom offers, sales, and messaging.
Roll the clock back a few decades and you’d be shocked at how little technology there was to help businesses function. Now, we are overwhelmed with powerful tech, yet many executives are still skeptical about using it.
“Nowadays, you’ve got technology that can earn your company incredible returns on investment if you know how to leverage it,” said Dr. Robert Applebaum, Board Certified Plastic Surgeon. “Your biggest worry shouldn’t be saving cash, but rather not spending it on something that can provide you massive returns in the long run.”
Why not put the cash down and gain a massive advantage wherever you can? That’s how the best business minds operate.
Just Make More
You can save all you want, but if you aren’t actively pushing the limits of your business to bring in money, your priorities are misaligned. Focus mainly on building and growing, rather than trying to save every dime that comes across the table.
“Budgeting and cost-cutting are great, but are you spending more time penny-pinching than actually getting out there and generating revenue?” said Alex Keyan, CEO and Founder of GoPure Beauty. “Be careful of falling into that trap of being too savings-focused, because the point of business is ultimately to earn and grow.”
In the long run, this mindset shift will help you more than any cost-saving strategy.
We often look at massive corporations and wonder what the heck they do with all that money! The truth is that very little of it just “sits there”. It’s always working in some way, moving in new directions, and creating new opportunities for the future.
“Finance is not merely about making money,” said Yale Economist Robert J. Shiller. “It’s about achieving our deep goals and protecting the fruits of our labor. It’s about stewardship and, therefore, about achieving the good society.”
Don’t let money stagnate or get stale – cash flow is crucial to move things forward.
It can be fun to buy pointless products or blow cash on fleeting feelings, but we all know that it’s no good for us in the long run.
Instead of seeing money as a source of cheap thrills, think about how it can improve your life in business in a more sustainable way.
“We’ve all got a built-in mechanism to determine if something is worth the cost, or if it’s a waste of money,” said Jason Wong, CEO and Founder of Doe Lashes. “Every once in a while, we make purchases for our business or ourselves, and we know deep down that it’s silly or arbitrary. That’s fine once in a while, but definitely don’t make a habit of mindless spending when you know better.”
Run the Numbers
Ever wonder how famous musicians or actors fall into poverty after seemingly having everything in the world? They fail to follow the basic principles of money management and end up right back where they started. This happens to businesses, too – be careful!
“How many businesses have fallen victim to poor financial management or overspending? Too many to even count,” said Derin Oyekan, Co-Founder of Reel Paper. “You can have the greatest idea in the world, but financial intelligence is the great equalizer. Be aware of every aspect of your books and never lose sight of the bottom line.”
Maybe your business will take more time to become profitable than you anticipated, but definitely don’t jump the gun with bad financial habits.
Discuss Big Buys
Executives have a reputation of being stingy when it comes to the company budget, but some of them have the opposite problem – buying too much stuff at one time without much consideration.
You want to find that happy medium and make sure every investment is smart and intentional.
“Departments such as sales and marketing are like making purchases to increase efficiency, and we usually just sign off without a second thought,” said Tyler Forte, CEO and Co-Founder of Felix Homes. “That’s not the precedent you want to set as a leader, especially if you’re trying to be more financially conscious. Learn the ins and outs of every purchase your company makes, even if you fully trust all your team players.”
Technology, research, production, operations – these all cost money and they’re all important. However, what’s the real engine that keeps things moving day to day? Employees.
“There are so many ways to save money when running a business, but employee perks and contracts is not one of them,” said Aylon Steinhart, CEO and Founder of Eclipse Foods. “Your people are everything when starting a venture, and you need them to stick around. Cut costs elsewhere, but don’t shortchange your staff by any means.”
If you’ve got a talented team in your corner, don’t let them go – do whatever you can to keep them on the front lines.
Watch for Fees
Fees and fines have been the cause of many headaches in the modern world, where it seems like there’s always a way to mess up and pay more by accident.
Rather than kicking yourself every time you accrue a fee, get to the root of the problem and try to avoid them in the first place.
“Analyzing your expenses will give you a broad picture of ways you can improve your financial circumstances,” said Brent Sanders, CEO of Wicksly. “You can take a look at who you bank with and how much it costs to do business with them. Your current bank might charge you a monthly fee or a penalty for your balance being under a certain amount which can rack up a mighty fine bill. Shop around for banks that don’t come with the extra fees; you can present your findings to your current bank to negotiate or just switch to save.”
Many of us need to learn our lessons about fees more than once, so don’t let it happen once again!
Live with Less
If you’re starting a business, a family, or simply turning over a new leaf in your personal life, you might need to live a bit leaner than you once did.
This hurts at first, and you’ll resist it for a while, but humans are highly adaptable and can adjust to anything. You need a lot less than you think.
“Always, always, always save where you can,” said Assaf Kostiner, Founder of Paint Your Life. “Most are generally overspending. If you take a step back, there are things that you buy that are simply not necessary or they are necessary and you are paying too much. It’s easy to want the best of the best on the market but downgrading everywhere you possibly can is the best way to set yourself up for the future.”
Believe it or not, you’ll feel better when you get rid of excess spending, so take the hit and try it out.
When you consider a purchase for yourself or your business, there’s only one real question you need to ask – is this a smart investment, or can I go without?
This is a massive mindset shift that can change the trajectory of your entire life.
“When holiday bonuses or cash incentives come around, invest in yourself in ways like education, entrepreneurship, retirement, etc.,” said Olivia Young, Head of Product Design of Conscious Items. “It should be a no-brainer to use excess income in the best way possible, that is using it to get you a leg up financially or professionally. There is no use in squandering your bonus on a shopping spree or expensive night out.”
When you start viewing money as a tool for growth and expansion rather than short-term enjoyment, everything begins to change for the better.
Quit Bad Habits
Poor financial management is a bad habit like any other. Start seeing it as something you can quit entirely, rather than fighting it every day.
Make the commitment now, and it will be easier than waiting to do so down the road.
“Just like quitting sugar cold turkey, completely cutting out your ‘shopping treats’ can easily set you back once you can no longer resist that item you had your eye on then you end up in a shopping frenzy,” said Jeff Goodwin, Sr. Director, Performance Marketing and Ecommerce at Orgain. “To avoid setting yourself up for the worst, you should aim to have a ‘splurge fund’. Allocate funds for your splurge buys, this way you can still save and remain on budget while allowing yourself a cheat day.”
Managing money doesn’t have to be as hard as it seems, especially when you have the right mindset and foundation of knowledge we discussed here. Get in control of your finances now so it doesn’t get control of you!