I remember the first time  she was learning the differences between pennies, nickels, dimes and quarters. We would play a game where she would be offered a “trade” and would have to decide if she wanted to make the deal. For example, I might have two dimes and offer to trade them for one of her quarters. It was fascinating to watch how in the beginning she would eagerly make that trade. I could also easily get her to hand over those two dimes for just five pennies. Of course, given her basic understanding of numbers – two was better than one – and five was certainly better than two!

Well, let me tell you, just a couple of years later, negotiating “financial deals” with my daughter is like going a few rounds with the toughest banker out there. She knows every penny she has earned doing her chores. And, should I have the misfortune to need to borrow a few dollars, when I don’t have enough cash for the babysitter – my seven year old is just about ready to charge me interest. On a basic level, she has received the financial education that keeps her from making the bad financial deals she could easily be persuaded to make in the past.

As a solo entrepreneur are you putting the necessary time and energy into your financial education to avoid making poor financial decisions?

The business world is a tough neighborhood. There are many out there eager to trade you two dimes for a quarter AND there are many lazy business owners who are content to believe that two is always better than one. This form of decision making is the absolute opposite of financial responsibility and will absolutely keep you from success.

Every day solo entrepreneurs face critical financial decisions that can make or break a business. When does it make sense to incur business debt and when is it time to cut back? Should you be investing any available capital and if so, what kind of vehicles will you invest in? Is it time to develop new products and services or should you increase the marketing of your current offerings?

Small business owners must be willing to learn. We must really understand money – the pitfalls to avoid and the ways we can leverage our resources to achieve maximum stability and growth. Visit http://www.AbundanceBoundSystem.com for the financial education you need to confidently make the decisions that allow you to create the success you desire and deserve.

The next critical step to creating success as a small business owner, is figuring out exactly where you would like to end up.  Where you are going is almost as important as your starting point.  It gives you a destination, a target, a place on which to set your sights.Think about an entrepreneur that you really admire – whose business has the size, scope and profits that you imagine for yourself. You can be very sure that behind the scenes there is a business plan, one that was put in place when the organization was born and one that is centered on a Vision.  In this business plan, the entrepreneur will have laid out where they want to be in 1 year, 3 years, and 5 years.  They will know what their ultimate goal is in very specific terms.

But for many small business owners, our Vision doesn’t extend that far beyond just wanting more money.  We know we are tired of struggling to pay the bills.  We hate the fact that we’re buried under debt.  But because our financial vision is not SPECIFIC, our plans tend to be equally vague – leaving little mystery around why they are often never actually implemented.

Think of your financial life as a road trip.  You know where you are starting – New York.  How many of us would actually get in our cars and start driving, without having actually decided where we want to go?  Now let’s say that you choose Miami.  Well, because you have your starting point AND your destination, you can plan exactly how you’ll get there.  You may plan it in stages.  You may stop to see some of the sights along the way.  You may even take a wrong turn now and again, but because you know where you’re headed, you’ll quickly be able to make corrections that will put you back on track.

Continuing this analogy, let’s say that you had indeed made a wrong turn on your way to Miami, and ended up in New Orleans. You might like it there, maybe even enough that you consider staying, and giving up on ever getting to Miami at all. You have a nice place, are happy with the climate, and have made a few friends. If your concept of Miami is simply “somewhere nice”, then you may be content to stay where you ended up, because it is simply too much effort to move on. What does it matter if the weather isn’t exactly what you wanted, or your house is not quite what you had imagined? Where you are is an improvement over where you were, so you give up your travel plans, and settle in.

How different would it be if your general dream of “Miami” became an actual vision of what your life would be when you got there? What if you had researched and found the exact condo you wanted on South Beach? You knew the purchase price, the mortgage payments, what your view would be, what the good local restaurants are. You knew what friends you had down there, what car you would drive, what you would wear on the beach, and where to find the best snorkeling. Your vision of your life in Florida encompasses everything, from lifestyle to partner, business success to financial abundance. How content would you now be to settle in New Orleans? Chances are, not very. And yet that is what we all do. Repeatedly. Because where we are is better than where we were, and the immediate discomfort it might take to move on overshadows the pain of staying.

At Abundance Bound, we take entrepreneurs through an exercise of creating a “3-Year Vision.” This involves writing down a detailed vision of where we want to be in 3 years time, and being as specific as possible about it. It is not enough to say “I will be rich”: you need to know what that means. To some that may be a passive income of $8,000 per month, living in a condo in a respectable part of town, and driving a new Jetta. For others, making $20,000 per month, and living in a house in Beverly Hills with a Porsche in the driveway would only be halfway there.  When you read your Vision you should feel happy – you should feel a sense of excitement and joy as you paint a vivid picture of where you want your life to be. And you should use that excitement to fuel you as you move forward.

Writing down your Vision will play a huge role in whether or not you reach your destination. From this will develop your action plan, which is your journey broken down into manageable pieces, and the specific, measurable goals that will comprise each step of that plan. It is absolutely critical that you fully visualize the end result and know clearly and vividly where you want to go.

Come to http://www.AbundanceBoundSystem.com for all the help you need drawing your personal entrepreneur’s  road map from point A to point B. We’ll support you along the journey and make sure you reap the benefits of careful planning and hard work.

Now think about your financial goals.  You want to create success in your small business, build wealth and enjoy prosperity in your life.  You plan to save some money and learn how to invest and create multiple streams of income.  What type of people are you around day after day?  Are they trying to gain wealth and prosperity like you, or are they like those people who hang out in front of the television eating junk and complaining about their lot in life?  In other words, are you associating with fellow entrepreneurs and other individuals who just talk about changing their financial life or are you associating with people who are doing something to make it happen?

Of course we are not suggesting that you dump all your friends and run out to find new ones.  Our close relationships are based on far more than simple wealth and financial criteria.  However, what we are suggesting is that in order to build success in your small business you must start expanding your circle of friends and acquaintances.  Find the entrepreneurs who are living the kind of life you want, the people who are trying to build their wealth, and get to know them.

There is a common theory that if you make a list of the five people you spend the most time with and take an average of their income, the resulting figure will be fairly close to your own earnings.  This ties directly into Step 8 of The Prosperity System – surround yourself with other wealth builders – and is part of what makes this step so important.  If you are making the choice to focus on improving your finances, it will be a far easier journey if you have other people in your life that are doing the same and who will support and encourage you on the journey.

So how do you meet these people?  Make a list of some networking groups and associations that you can join.  Think about people that you would like to meet and join the groups they are a part of.  If you are interested in learning about a particular type of investing, participate in a financial seminar or join a group that focuses on that.  As you meet new people, don’t be afraid to talk about what you are up to in your life and business.  Share your goals and ambitions.  Opportunity will not find you if you stay silent.

Part of what makes the process of building financial stability and independence less scary is that you do not have to do it alone.  Being a part of a community of other like-minded individuals will help bring you to a new level personally, professionally, and financially.  Open yourself up to new associations and friendships so that these new relationships can help feed your ambition.  It’s just like having a friend with whom to go to the gym.  It adds extra incentive to keep moving forward and achieve your goals.

Visit http://www.AbundanceBoundSystem.com and join a community of entrepreneurs committed to creating wealth and prosperity. Then build the life and business you want with their support and encouragement.

These factors make it even more critical that we develop financial consistency.  Keeping a handle on the ways of managing our money that are within our control, will go a long way towards building financial stability and avoiding the financial roller coaster that plagues many small business owners.

Following are 5 simple steps to becoming financially consistent:

1.  Pay Yourself First

This is the corner stone of any long term financial stability, let alone wealth. Every month, you should put a set percentage of your earnings into a high interest savings account, and then don’t touch it until you are ready to invest with that money.  This is not the “rainy day” account that you dip into when things get hard, nor is this the “splurge” account to get something special for yourself as a celebration. Money is only withdrawn from this account to buy assets with – an asset being defined in this case as something that either makes you money, or appreciates (increases) in value (so a new car would not be an asset under this definition!). Do this consistently and, over time, you will build up a very nice amount of cash to be investing with.

2.  Schedule Regular Money Days

“Money Days” are key to your success as a small business owner. This is simply a day that you set aside to work on your finances.  The jobs might include filing, entering receipts into a computer program, balancing bank statements, etc.  Now, it does not have to be a whole day, of course – unless your situation merits it… usually because you haven’t done one for a long time! Personally, I set aside a couple of hours every other week, and then a meeting with my accountant over the phone every couple of months. Doing this accomplishes several things: Your accounts will remain orderly, allowing you to continually track your financial progress and identify potential problems early on.  Money Days also allow you to focus on your finances for short, isolated periods, which frees up your time to think about and do other things… like growing your business.

3.  Forecast your spending

Forecasting is the process of allocating where your money will be spent. Visit http://www.AbundanceBoundSystem.com for tools specifically designed to help small business owners, network marketers and solo entrepreneurs determine exactly how they are currently spending. You’ll then decide which categories cannot change (rent, for example) and which ones can (groceries, entertainment etc).  You can then make strong, educated decisions about what amount you will CHOOSE to spend monthly in each category.  This tends to be far more empowering (and effective) than just blindly trying eliminate entire categories, That is the big difference between this process and traditional budgeting.  Budgeting encourages cutting out “frivolous” categories entirely and forgets the fact that we’re human!  You won’t stick to something long term that makes you feel deprived.  But as opposed to going to Starbucks every day, can you go every other day? Or order a Tall instead of a Venti?  Making these kinds of choices in several areas can make a huge difference to your overall spending.

4.  Keep business finances separate from personal

You must have separate bank accounts for your personal life and your small business.  Identify one credit card you will use for personal expenses and a different one to be used for business.  You would never see the CEO of Kinkos write a check for company expenses out of his personal account, and yet many small business owners do this all the time.  Separating your finances will allow you to clearly see what your business is spending and earning.  It will also legitimize all the tax deductions you are taking.

5.  Regular financial learning

Keep doing what you are doing right now! We take time to take business classes on marketing, using the internet, and creating products… but we expect our finances to somehow take care of themselves. Not only is this not realistic, it is dangerous, as we can make numerous serious mistakes blundering around while we try to find our financial way. The reason that most small businesses fail is because they are unable to financially sustain. Knowing this, doesn’t it make sense to put some time into financial education now, so that you have the skills to develop the financial stability that will keep your business around for the long term? Carve out some time for financial seminars. Learn how to manage your money as an entrepreneur and how to invest it so it can grow faster.  Learn the strategies to handle your business expenses, reduce your taxes, and create multiple sources of passive income.  It will be well worth it in the long run.

So there you have it.  Consistently doing these five things will significantly improve your financial picture over the coming months and years. Visit http://www.AbundanceBoundSystem.com to learn to incorporate each step into your daily and weekly life. It requires only a tiny time commitment of time, but the dividends from doing so will last forever.

So the question is: how do we balance the need for a social life with the realities of a tight budget?

Here are three suggestions:

1. Don’t try to keep up with the Joneses. The need to “look good” is almost beaten into us from an early age, so avoiding falling into this trap can be hard.  Explore discount stores instead of name-brand shops.  Suggest coffee with friends instead of drinks (a $1.50 coffee is much easier on the wallet than a $12 cocktail). You’ll often find, especially when it comes to socializing, that people are really glad not to be spending money, as they face many of the same financial challenges that you do.
2. Forecast your fun. Forecasting is the process of projecting what your spending will be in any area of your life. Visit http://www.abundanceboundsystem.com and register for our next free financial seminar. We’ll teach you how to calculate exactly what you’re spending, on average, across the financial board. You can then determine exactly where you’re overspending, and also, where you can spend a bit more if necessary. The key to success in this process is avoiding denial.  In other words, it’s rarely advisable to try completely eliminating a category where you’ve been spending up until this point.  (i.e. “I’m not buying any new clothes for the next 6 months…”)  There’s nothing like “forbidden fruit” for enticing you back. So instead of going into a month saying “I’m not going to go out at all” – simply allocate a certain amount for “Eating Out,” or “Drinks,” or whatever other category you want.  Then, when the end of the month comes around and you’re near the end of your allocated funds, suggest the local diner instead of the local bar for that next get together.
3. Work together to save money. Given that most people are in the same boat when it comes to their finances, be the first one to broach the subject of a budget with your friends. There is such a taboo in this country about discussing money that most people go through life never saying more than the obligatory “I’m fine…” (usually a lie) or “I’m broke…” (but with no real attempt to solve the issues causing that situation). Break with tradition and work with others on ways to both save and make more money. You’ll be amazed at the ideas that come out of brainstorming these things with like minded individuals, so give it a go! At the very least, it will take the pressure off the next time you say “Make mine a water…”

Hopefully these pointers give you some ideas about how to have fun but still make sound financial decisions at the same time – a key to your financial stability and success as a small business owner. Again, it’s never about saying “I won‘t go out until I’ve made $X.” That may work for some people, but I have yet to meet them. Instead, map out your spending, and put your money towards things that you’ll enjoy.  Talk to your friends and work things out together. Visit http://www.AbundanceBoundSystem.com for the guidance and support that will help you stick to your plan. Your bank account and stress levels will thank you for it.

What we want to achieve with this post is nothing grand. No big concepts or sweeping statements.  Our goal is to provide just a few simple, practical things you can implement right away that can save anywhere from a few, to a few hundred, dollars a month.

The first step to getting a handle on your finances is taking the time to sit down and figure out in detail how you are spending your money. This is obviously easiest if you keep your financial records in a computer program like Quicken or Quickbooks – which you should absolutely be doing as an entrepreneur.

Something fascinating happens when you start to really look at your finances.  All of these things on which you didn’t realize you were spending money, will suddenly surface.  It is amazing (and frightening) to discover how much is disappearing through financial leaks we don’t even know are there.

Some examples:

Where do you bank? How much are you paying just to have your account? Are you charged extra if you actually go into the bank and make deposits or withdrawals with a teller?  We had one student who had never realized she was spending $30 per month in “Bank Charges.” Explore what options exist for free checking, free savings etc: then shift away from whoever you are currently banking with that is over charging you for this stuff.

What credit card do you use? Another student in one of our financial seminars had a “great deal” with American Express. She had responded to a great sounding card offer – designed to help “build success in a small business.” She was getting all kinds of special stuff… and was paying around $350 per year for it. Once she looked into the services that were actually important to her, it turned out that there was a free option that provided everything she needed.  She had been paying that extra money every year for nothing.

Do you carry credit card “insurance?” We have all been guilty of this one. You know, the tele-marketer who signs us up for a free 30-day trial of some service, offering a free credit report or something similar. All we have to do is call and cancel if we don’t want to continue… and it seems such an easy thing to do at the time… and yet somehow we never do! Then three years later we find out we have been spending $40 per month for something we never used or cared about… you get the picture.

The point is that, with just a little bit of effort, all of us can probably find an extra $25-$100 or even more – just by taking the time to really figure our where our money is going.  On the surface, it may not seem like a lot – but when you’re committed to creating success in your small business, this is money that can start going to paying down debt, building investment accounts and actually creating a prosperous future.  Visit http://www.abundanceboundsystem.com for more money saving ideas and this month, make a commitment to find and plug your money leaks.

Putting it off will just make it more expensive.

How many of you read the title of this blog post and said “Oh no!  Not that again!”?

If you have ever attended any kind of financial seminar or read any books on finances, you have been told that you should consistently be putting a set amount of your income into savings.  We all know that we are supposed to be putting away money every single month.  Still, the reality is that an extremely small percentage of us actually do it.

So let’s just be extremely clear – no more beating around the bush . . . If you are not willing to make the commitment to automatically pay yourself first – every, single month without exception – you will NEVER build any kind of financial stability, let alone wealth.

Take a moment and think about all of the people that you pay automatically each month.  I understand that as an entrepreneur you may now pay your taxes quarterly or even yearly. But I’m sure you remember having a job where your taxes were automatically removed from your paycheck. Many of us have also set up a variety of our household bills to be paid automatically out of our checking accounts each month.  Why do you think the IRS arranges to have your taxes taken out of your earnings before you even see the money?  The answer is simply that they recognize this is the only way to ENSURE that they receive what they are owed.   You set up your bills to be paid automatically also to ensure that the respective companies receive what they are owed.  This eliminates the possibility that you will forget or get too busy to make the necessary payment.   We need to change our psychology that has us putting the government and the phone company and our cable provider ahead of ourselves, our financial security and our long term success as small business owners.

I am sure that every person reading this article has thought to themselves, “I’ll start putting some money away as soon as I start earning more.”  We as entrepreneurs are especially guilty of this mindset.  I also repeatedly hear from students and coaching clients that, because their earnings tend to vary, and because they haven’t yet reach their desired level of success in their small business they can’t figure out how much they can put away each month.  It is time to realize that these are just excuses, and as long as we continue to make excuses we will never change our financial picture.

The first step is to open what we call your Wealth Account.  The purpose of this account is to build up funds that will ultimately be used to purchase assets.  Assets are not stuff – bigger homes, nicer cars or fancy stereo systems – assets are things that you own that increase in value and/or create passive income: investment properties, businesses, stocks, bonds, etc.  You must also recognize that your Wealth Account is not an “emergency fund”.  You are not taking money from this account for any reason other than to purchase an asset that will make you more money, adding to your financial resources and ability to build success in your small business.

Once your account has been opened, decide how much you are going to put in it each month and immediately arrange to have that amount automatically transferred into your Wealth Account from your checking account.  How do you decide what amount?  I recommend that you look at your deposits for the last three months and determine what your average monthly earnings have been.  Once you have that amount, take 10% and make that the dollar figure you will deposit into your Wealth Account each month.  For instance, if your business is earning an average of $2,000 each month, $200 would be a reasonable monthly Wealth Account deposit.  If you are in a panic because that number feels too high, start with 5% or $100.  Just promise yourself that you will re-evaluate that figure after 3 to 6 months and see if you are comfortable increasing it.

Here is an absolute promise:  Once you have gotten this set up to happen automatically, you absolutely will not miss the money.  Over and over again clients tell us that they have no idea what they were doing with the one, two or three hundred dollars a month that they obviously used to be spending but that is now going straight into their Wealth Account.  As this account builds, you will notice yourself starting to gain interest in learning about possible investments for your money.  You will find that you always have an ear out listening for potential financial opportunities.  Your excitement and your commitment to building your wealth will grow as you start to realize that you will soon be able to afford that first investment property or purchase shares in a company or business.

We love to hear about the success of our small business readers!  Please visit us at http://www.abundanceboundsystem.com and let us know that you have opened your account and what amount you are committed to depositing each month.  Putting your promise out there to someone other than yourself will absolutely help you to stick to it.