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 Money is only withdrawn from this account to buy assets with – an asset being defined in this case as something that either makes you money, or appreciates (increases) in value (so a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.

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.

However, it is true that the first step to creating significant positive changes in your business finances, is honestly examining and shifting some of your deep seated, negative attitudes towards money.  Your financial conditioning is something that you must begin to self-manage, be aware of and correct the rest of your life. This isn’t something that you can check the box and say – I’m done, I’ve arrived. Your psychology will always impact your decision making process along your wealth building journey.

I encourage you to take the time to actually write down some of the beliefs you have about money.  Honestly examine the list and ask yourself which beliefs continue to sabotage you.  Now, make a second list of what you would like your thinking about money to be.  Start carrying those lists with you.  Stop yourself when you find your mind on a thought from the first list and make a conscious decision to shift that thought to one of your new, empowering beliefs.

We believe that with the right tools, all entrepreneurs can be successful. Our mission as a company is to give you the clear action steps you need to build success as a small business owner.  Visit us at http://www.abundanceboundsystem.com for some ideas that will get you started. Accept the responsibility for changing your negative attitudes about money. By doing so, you’ll gradually reduce the mental blocks that are keeping you from consistently and powerfully doing the work to create the financial stability and profitability you so richly deserve.