Shopping Spree!! Woohoo!
You just got a nice big check as payment in your new solo enterprise and wow…there are some things you’ve had your eyes on for a while. Believe me, I have been there and while I do not go nuts…I do allow myself some extras but have learned to have a plan in place.
A couple of things to consider before you grab a glass of wine and start filling up your virtual online carts:
- Is this straight income? To be specific, have you earned all of this? I once mentored a very talented freelancer who got an upfront payment for an expected project. She had only delivered on a third of the project. Making the other two thirds not her money..yet. She didn’t like that snippet of info from me suffice to say - but that is spending before you have earned it and that could make a huge mess no one wants to deal with.
- The portion that you have earned. Take out one third and put away for taxes. There is always more required than you think. (hang on..it gets a little tougher)
- Then, take another third out for overhead - transportation, expenses, insurances, admin, accountants, etc.
- Then, what is left over can go into your bank account
- That bank account, by the way, should be completely separate from your personal account. That alone can cause another mess. Again the talented freelancer I mentioned earlier was planning to deposit her big check into her personal account. Yikes.
- You should also set up a business savings for those slower months or unexpected costs.
- Put together a plan of operating costs, expenses and tax schedules.
- Set up auto pay on your bills and make sure you always have enough in the account to cover it as the month flies by quickly and those bills return like a boomerang.
- Keep good records - especially your time and efforts so you can be sure to be compensated.
- Always have a clear cut written agreement and payment schedule - support it and follow it.
When you know the amount of money you need to break even, what you want to save and need to set aside - you have a better chance of ….wait for it….Making more money.
Whaat?
Yes, that seems odd but give it a thought for a moment. If you say I must make $_____________ each month to break even, save and pay myself $______________ then you are better equipped to go earn it. The law of attraction. The mindset. It’s not magic - it’s real.
If you fly by the seat of your pants and aren’t intentional about what you should earn….You get whatever. Sometimes good sometimes not. And…that may be just fine with you because you enjoy yourself and don’t rely on the income, you just love the work.
Whichever it is, you want to avoid messes...because they inevitably cause stress.
I have been in business for almost all my life. I did not figure this out right away and had to learn by experience. But I can say it absolutely does work.
Know your numbers. Follow a plan. You will reap the benefits.
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