In episode 89 of Lean the F*ck Out, we talked with the amazing Lynne Somerman about budgeting for entrepreneurs. The conversation with Lynne was amazing and honest. I learned a ton, but had it brought up so many terrible memories of how I managed my money in the past as an entrepreneur.
I have always budgeted, so why did everything fall apart?
When I got my first salaried gig right out of my bachelor’s degree, I was great at budgeting. My office mate and I shared templates and tips and my husband and I got right on track for saving and spending. More spending than saving, but we always knew how much money we had.
Then I decided to leave my salary job to become an entrepreneur. Since I left my job, my income has been enough to pay our bills (most of the time), but it never seems like we EVER have enough money.
This 👇 is an actual depiction of me going through my finances every month.
I got into a bad habit of trying to predict what I would make, instead of spending what we had. It was a vicious cycle that have lead to some crazy times over the past four years.
It doesn’t have to be this way? Really?!?!
What I have found out over the years, after a ton of hard lessons, and finally listening to someone that knows finances (like Lynne the amazing), is that it doesn’t have to be this way.
My husband and I have bought and sold two houses since I quit my job, helping us along the way to knock out some debt, lower our monthly expenses, and set ourselves up on a track to getting back on track.
It isn’t easy, but we’re finally ready.
Now that we are heading down the right path, here are the three things my husband and I are doing to stay on the right path:
- We started using YNAB. Lynne recommends it during her episode and it’s freakin’ amazing! If you don’t want an online system, the good ole envelope method would work just the same.
- We are talking about the budget each month when money comes in. We actually used to avoid talking about the budget at all costs. It was much too much stress for us, but we have recently realized that actually talking about it would cause less stress. ::gasp:: Our plan is to talk about the budget every month on the 25th to set up how we are going to spend our funds the next month.
- We are going to start hiding money. We miraculously got a tax refund this year, thank you medical expenses, so we are hiding that money away. This is just the beginning. We aren’t spending it, but we are actually saving it. Our goal is to keep as much cash as we can out of sight and out of mind. We aren’t planning on opening any offshore accounts, but instead we plan to put the money in a savings account that we don’t access through YNAB regularly. Boom, out of sight, out of mind, we don’t spend it. We hope.