Posts Tagged ‘financial education’

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Throw Your Spending Plan Out The Window

August 10, 2011

In “Entrepreneurship and Making ‘Adult’ Financial Decisions” I Told the Truth about why I wasn’t at the eWomen Network Conference this year. And I outlined a spending strategy I had developed with a client:

“One of my favorite clients loves conferences and trainings; she has about $4,000 annually in her spending plan. She wants to spend more, but her business’ budget doesn’t allow for it. We developed a profit-splitting plan that puts a percentage of her business’ net profits into a savings account titled “Business Investments.” She doesn’t have to spend that money, but when a conference pops up that she wants to attend, she no longer has to discuss it with me or agonize over the pros and cons of the decision. If the money is in the reserve account, she goes.”

Best laid plans. While she was away at the eWomen Network Conference I received a text from her:

 

There are a lot of gurus out there selling marketing, sales and mindset training/coaching programs. Entrepreneurs invest hundreds, thousands, and tens of thousands in these programs. The potential and possibility of learning from someone like Lisa Sasevich can be irresistible, and in the moment of making the buying decision, it’s challenging at best to separate logic from emotion.

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Entrepreneurship and Making ‘Adult’ Financial Decisions

July 7, 2011
Adult Financial Decisions

When I launched on Forbes.com I promised myself that I was going to start Telling the Truth. It’s easy to be a financial guru, talk at people, and tell them, “This Is How You Should Handle Your Money.” It takes more courage to be transparent and share stories not just from our clients, but from ourselves, and even more courage to share not just from our past, but from our present. So here I am, being courageous.

Every summer I head to Dallasfor the annual eWomen Network Conference. I look forward to it all year long. It’s the largest business women’s conference in North America, and an amazing place to learn, connect and be inspired. Sandra Yancey, CEO of eWomen Network, provides the incredible opportunity to learn from a long list of business rock stars: Michael Gerber, Tony Hsieh (zappos), Robert Stephens (Geek Squad), Lisa Nichols, Zig Ziglar and the list goes on. This summer, I’m not going.

What’s an ‘Adult Financial Decision’?

Adult financial decisions are logical decisions—ones we intuitively know are good decisions even though every other part of our being disagrees. When we make adult financial decisions, our inner child screams, “But I wanted that!” or our lips pout or our hearts feel heavy. Last month I made the adult financial decision that my team was not going to the conference this year. As a result, I’ve been walking around pouting and having a heavy heart. And then I heard a voice shout: “Stacey, how many hundreds of times have you advised people who were conflicted about when and how much to spend on professional development??? Stop being a weenie and write a blog.”

Entrepreneurs make the assumption that they are the only ones making emotional spending decisions. “If I just ran my business more like a business owner, I don’t think I’d have these cash flow issues.” The truth is that entrepreneurs are human beings, and most of us humans make emotionally-based financial decisions. That’s not a bad thing. It’s when we don’t balance emotionally-based decisions with logical ones that imbalance can capsize our ship. Over the past year, my business has made a number of bold spending decisions, some logical, some emotionally-based. We’ve also pruned our client tree (let a few clients go who were no longer a good fit). The end result is that our reserves are at low tide.

Could we go to the conference? Yes. Do we have the cash? Yes. Would there be consequences? Yes. Is it worth the consequences? Logically, no.

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3 Words to Small Business Success: Easy, Fun and Popular

June 8, 2011

What’s the attitude you show up to in your business each day?

Are you having fun?

Does it lift your spirit to connect with those you need to connect with to be successful in your business?

In my blog Community Service, Leadership and Small Businesses, I told the story of how my best friend Tina Reynolds, long-time small business owner of Uptown Studios, uses her love of community service to drive the marketing for her business. I met Tina 15 years ago, when she was doing volunteer work for a local HIV/AIDS service organization, and through the years I cannot begin to recall how many organizations, actions and activities she has led or been part of. Her dedication and stamina for community service are unparalleled, and as a result she frequently receives awards, honors and nominations.

At this week’s California Small Business Day, she was honored by California’s Senate President pro Tem Darrell Steinberg as the Capital Region’s Small Business of the Year. Senator Steinberg made an excellent choice. From the vantage point of a best friend I’ve watched Tina’s business grow, and then sputter, and then grow again. I’ve watched her maneuver through the economic challenges of the past few years, always with a positive attitude.

So how exactly do you get to be a Small Business of the Year? What makes Tina and her business stand out as a role model for entrepreneurs? To use Uptown Studios’ tagline, be Easy, Fun and Popular.

Easy

In my Forbes Profile I write about blocks I’ve Been Around: putting $10 of gas in my car because that’s all I had. This was years ago, so I’m going to out Tina: she was the one I passed that $10 back and forth with. Sometimes I needed it; sometimes she did. Entrepreneurship isn’t always glamorous. But Tina, no matter how challenging a client project or how tough a business issue she faces, always has a can-do attitude and exudes to her staff and her clients that it’s easy. “Let’s just jump in and get it done.” And to persevere as an entrepreneur while enjoying a personal life, having an “It’s Easy” attitude is vital.

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How You Do Your Money…

May 24, 2011

…is how you do the rest of your life.

I was talking to a yoga teacher about a friend of hers who was having money problems. Actually, he had been having money problems for most of his life. She told me that there is a saying in yoga: “How you do yoga is how you do the rest of your life.” In my years of working with others around their money, I’ve found this to be equally true: “How you do your money is how you do the rest of your life.”

If I gave you a list of all of the clients’ businesses and professions that I’ve ever worked with, and asked you to select which one of those clients was, by far, the most at peace with his or her financial past, present and future, you would never select the right one. If I gave you a list of all of their gross revenues, you would never select the right one. If I gave you a list of their net profits, you would never select the right one.

But, if I gave you a list of other attributes of each of these clients, it would be clear to many of you which is most at peace.

Do you have set work hours, take regular vacations, fund your retirement every month, pay yourself a steady salary, don’t draw additional money from your business, have proper insurances in place and utilize appropriate professional advice? In your personal life, do you eat well, exercise, and balance playtime with responsibility time? How do you do the rest of your life? Does it look like how you do your money?

I’ve learned a lot from this client. How did she come to be at peace? Consistency, and years of it. Paying a little extra on her mortgage every month, no matter what. Funding her retirement every year, no matter what. Using business debt very carefully and cautiously.

What could you do, in your life, to be at peace with your money?

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Stacey Powell, creating more financial clarity at CreatingAnswers.com, tweeting at @CreatingAnswers and showing off Financial Art at Facebook.

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How Crayons Create Financial Peace

April 22, 2011

Crayons Create Financial PeaceMy biggest revelation about how to help others with their financial issues came when I began working on my own financial issues. In Telling the Truth, I point out the rather obvious fact why so many Americans with money problems can’t seem to get beyond them: we don’t talk about money so we have no opportunity to tell the truth about it.

We are a financially illiterate society. There are few places that you can go to work on your money, talk about your money, make your money better. I lay awake at night sometimes dreaming up solutions to this societal problem. And bit by bit, I create answers. That’s how we came to start Financial Boot Camps, and that’s how I tripped upon creating this exercise for a Boot Camp: draw your financial life with crayons.

The accountant in me questioned the exercise that the right side of my brain had created. “Um, that’s silly.” But the right side of my brain, the creative side that has been fed and nurtured by studying a lot of research into the psychological and emotional aspects of our relationship with our money said: “Forge on!”

The exercise was simple. The boot campers were to draw their financial life in a crayon pie chart, Read the rest of this entry ?

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Tax Day: Our Collective Moment of Financial Clarity

April 18, 2011

Financial Clarity CardSome people think April 15th is an icky day. I see it as our collective moment of financial clarity. Tax day is the one day that we all know exactly how much our businesses earned, or didn’t earn, last year.

I hear a lot of people focus on their refund amount. From my perspective, that’s NOT the number you need to focus on. Leave that to your tax accountant. The number that an entrepreneur should focus on is the one that gives you absolute clarity about what your business truly earned.

Employees have financial clarity about their earnings. They know exactly what their hourly wage is. If your value in the workplace is $25/hour, you work for$25/hour. If, due to economic or other circumstances, you take a job at a lower wage, you are usually VERY clear that you are working for less than your value.

Entrepreneurs don’t often have the same clarity. We don’t get paystubs. We often pay ourselves inconsistently. We pay taxes from our business account, so we never get to see the equivalent of ‘gross wages.’ When our businesses need money, we funnel into them from our personal funds. And when our businesses are flush, we sometimes plunder them.

Employees have clarity about time too. A full time employee works 2,080 hours a year. Those that work more, or less, know it. Entrepreneurs don’t have that same clarity. Some of us come in early, stay late, go to evening networking meetings and work weekends. Others spend half of their days doing laundry, running personal errands and picking up kids. When they look back on their week with honesty they they’ve only worked 20 hours.

  • I believe there is great power in simplifying financial data.
  • I believe there is great power in putting pencil to paper.
  • I believe there is great power in saying out loud to yourself and to a trusted adviser “I made $XX/hour last year.”
  • And I believe there is great power in writing about your feelings about your earnings.

Print the Annual Clarity Card, fill it in and share with your fellow Creating Answers readers in the comments, anonymously if you’d like, what you learned from the experience.

If you’d like a free PDF of our Monthly Clarity Cards, send a request to info@creatinganswers.com.

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Date Night With Your Finances

March 30, 2011

Financial Art 2010Date night with your finances? What’s that supposed to mean?

Just what it says. The phrase “Date Night” evokes thoughts of fun, special, coveted. For many, the phrase “Bill Paying” conjures ugh, drudgery, lack. What would it look like if we felt differently about our finances?

Most of us have it backwards. Its no wonder we think of our finances as drudgery. This is how the majority of us “do our money.”

  • We squeeze the chore between the laundry and washing the dog.
  • We collect our bills; we log in to get our bank balance (and hope that everything has cleared the bank); we pay our bills.
  • We look to see how much is left, and hope there is some.
  • Then, when we’re tired, over it, a little grumpy, and the dog still smells, we make the important decisions. This goes to savings, that goes to debt, and this gets set aside for car repairs.
  • But the dog smells, and company is coming for dinner, so I’ll make those decisions next month.

Would you like to do it differently? Would it be all right if life got easier?

That’s a phrase I learned from Maria Nemeth, a pioneer and visionary in the field of our psychological and emotional attitudes about money. She published “The Energy of Money” in 1997, when few were addressing the important issue of how financial decisions are made.

When it came time for “Telling the Truth” and dealing with my own financial problems, one action I took was Date Night with my finances at my favorite café. Me, my portable financial binder, and my dreams. I coveted those luxurious Saturday nights, not squeezed between laundry and dog-washing (okay, I don’t really have a dog.) I used the time to dream, to look at the truth and to plan. Bill paying happened elsewhere. Each consecutive month, I got a little more clarity, planning became a little easier, and my dreams felt more attainable.

Our money and our financial decisions should not be a chore. Bill paying is a chore. Financial decisions impact our future, our dreams, our peace of mind. They intertwine with who we want to be and who we are. We should have a little fun. We should make it a date night!

Last summer I hosted my first Financial Art ~ An Interactive Art Experience. Hundreds walked through our office courtyard, and a couple hundred picked up crayons, a piece of paper, and an egg timer. In three minutes they drew their financial lives or their financial futures. Then they hoisted their drawings, as Tibetan Prayer Flags are hoisted, as a wish to their future. The cool thing about it was there were couples out on a date talking about their money. Happy, excited, hopeful; the antithesis of drudgery. It was a simple bit of collective fun. Interactive community art. A way to do it a little differently. And a great launch to Date Night with Your Finances.