You Don't Need A Budget: A Simple Way to Manage Money for Business Owners and Creatives
If you’re smart enough to know that a budget can help and wise enough to know that you’re not going to stick to one - Join me as I reveal how we can improve our finances without budgeting.
My name is Lucas and welcome. As a business owner and creative, i’ve always struggled to stick to a budget. They’re boring, tedious, don’t work well for unpredictable income.
At the core, budgeting is a set of guidelines - just a simple plan for our money. But, when they’re too complex or restrictive, we tend to lose interest. It’s kinda like hangin out with a person who never listens to you, and always demands you do things their way.
But, when we have a simple plan for our money that flows with our lifestyle, everything feels so much better and we have more money. So, Let’s create a plan that has all of the benefits of a budget without any of the complexity
And if you prefer to watch the video, please check it out here…
We’ll do this in three steps. First, we’ll clean out the financial clutter. Second, we’ll identify our financial priorities and Third, we’ll create a simple plan to waste less, capture more and Improve our spending.
Step 1: Clear The Financial Clutter and Get Organized:
Most of us have accumulated all kids of financial clutter which makes it much harder to keep track of things. For example, I used to have 9 credit and debit cards, 3 banks, 6 bank accounts, I had money going to venmo, PayPal, sometimes I’d receive checks and I paid bills on 12 different days of the month! Whew!!!
When we’re drowning in passwords, logins and different accounts, we’re making our finances a lot more complicated than they need to be and when we pay for things with credit and debit cards plus venmo and PayPal, we lose track of our spending.
So, let’s clear the clutter and simplify. I invite you to List out every credit and debit card, all of the different banks and bank accounts, all forms of payment and the days of the month that you pay bills on.
Ask yourself, “What can I close or consolidate to make my day to day finances easier?”
I helped a couple go from 13 credit and debit cards down to 1 for their business and 1 for their personal life. Now their spending is centralized, organized and easy to stay on top of. Plus, both of their credit cards earn flights, so they’ve turbo charged their rewards.
I recommend starting with the low hanging fruit. If you haven’t used it for the last 6 months or you forgot that you even had it, close it out. And if you’d like to go deeper into this process, check out this video. Clearing out the clutter is a quick, easy way to improve your finances.
Step 2: Identify Your Financial Priorities
Most of us neglect our financial responsibilities. We rarely make savings a priority, and if you’re anything like me, you probably put off your debt and taxes for as long as possible. Problem is, they can be expensive to ignore.
So, What areas of your life have you been neglecting? Savings? Your business? Debts? Taxes, A Travel fund? List everything that comes to mind. The goal is to get very clear on what your financial priorities are or what you would like them to be.
Once you’ve identified them, it’ll be a lot easier to create a plan for your money - and that brings us to the third and final step..
Step 3: Create a simple plan to waste less money, capture more of it and Improve your spending.
Imagine for a moment that you just received a big check from a client, say $10,000. If you’re anything like me, you’re thinking, “I’ve to $10k, dinner and drinks on me, maybe some new clothes and shoes, new tires and brakes and I’ll put a little towards credit cards.”
The days pass, a few bills pop up that you forgot about and before you know it, that $10,000 is close to zero and to top it off, you never transferred anything to your savings.
I call it the feast or famine cycle… When the money comes in, we feast and don’t think much about the future, then we burn through the cash quickly and move right back into famine”
So, how do we fix it? With a little self awareness… So, what I mean by that is, If the money is in your account, you’re going to spend it and you know that.. You’ve proven it to yourself many times over, as have I. So let’s use that knowledge to our advantage…
All you have to do is move the money BEFORE you can waste it. When the money comes in, split it up and send it to your priorities FIRST. Now, the important areas of your life get covered AND you’ll have less money to waste.
For example… when I receive a check for $10k, I immediately send $2500 to my savings, $2500 to my business, $2500 to cover my living expenses and $2500 to my taxes. Instead of pretending that I have $10k to spend, I only have $2500 to cover my living expenses and because that’s less money, I get a lot more intentional with my spending.
Think about it… If you only had$2500 for living expenses instead of $10,000, would you waste it OR would you make sure that you’re living expenses are covered? PLUS, how would you feel knowing that at the same time, you paid off $2500 of your debt AND put $2500 in to your savings account?
From Reacting to Creating our Circumstances
When we spend first and have no plan, we have to deal with the repercussions later, running a bunch of reports and trying to figure out where it all went. We’re reacting to the situation, not actually solving the problem.
But when we take care of our priorities FIRST, we always have what we need, AND there’s less money to waste. We are literally shifting the frequency from reacting to CREATING our circumstances. And that’s a powerful place to be.
So let’s recap the lesson and get you on your way…
Clear out the financial clutter and simplify your finances.
Identify the main areas of your life that require money.
Create a simple plan that ensures your priorities get paid FIRST.
If you know that you lack self control, and that you’re probably not going to stick to a budget, use that awareness to your advantage and create a simple plan for your money. Or feel free to use mine - When the money comes in, split it up and send it to the areas of your life that need it BEFORE you can waste it.
If you received value from today’s topic, I’d love to hear from. Please feel free to leave a comment. As always, Thank you for your time and energy.
Lucas Z.