3 Steps To Better Spending Habits… A Guide For Business Owners
Hi Friends. Would you like to improve your spending habits without having to create a budget or track your expenses? Join me as I show you how. (If you prefer to watch the video, please check it out here…)
Hi, my name is Lucas and I love to help business owners improve their finances…
I’m the first to admit that I had really shitty spending habits. Money would come in and then it would go right back out.
That part was fun but coming face to face with a mountain of debt, was not.
Most of us know that we have poor spending habits and we tell ourselves that we should improve, but, we usually don’t. Ever thought about why?
For 99% of my clients, it comes down to 3 things.
Confusion, Temptation & Separation.
Each one of these creates shitty spending habits but when you put them all together, we don’t stand a chance. Luckily, there’s a few simple solutions..
We can cut through the Confusion by streamlining our finances.
We can minimize the Temptation by limiting our access to large amounts of money
Mend the separation by being in constant contact with your finances
So, Let’s get to it…
Step 1 To Improving your Spending Habits: Clear The Confusion
Modern technology can make our lives easier but when we end up with 6 credit cards, 4 bank accounts and use several payment methods, we trap ourselves in financial clutter..
So let’s untangle the mess and simplify. Instead of this, we want to end up with something like this… 1 set of accounts for our personal life and 1 set for our business - Simplicity creates accountability
Think about it, when you have 3 different credit cards and you’re paying them from 4 different bank accounts, that’s not simple. There’s different due dates, log ins, passwords and because theres’ so much going on, we lose track
Now, imagine Pulling one credit card out of your wallet to pay for personal expenses, and one card for the business. And when you pay the personal card, it comes form your personal checking. The business card from the business checking. It’s simple, easy and it requires very little thought or effort.
Are you ready to simplify?
Make a list of every financial product you have. List all of your credit cards, debit cards, bank accounts, different forms of payment and all the banks you currently use.
Once you everything listed, draw a line through each product that you have not used in the last 3 months or forgot that you even had. Now, look at the remaining products. What can you close or consolidate to make your life easier?
If you have 3 banks and one of them is a huge pain in the ass to deal with. Draw a line through it. If you have multiple credit cards, ask yourself, which reward points is most important to you?, Draw a line through the others.
Now, close ‘em out. Get rid of ‘em. Simplify. The less you have, the easier it is to improve your spending.
Now, I understand that closing accounts and cards may feel uncomfortable, I see it daily with my clients, but remember why you’re here.. To unravel the tangled mess of financial confusion and improve your spending habits.
If you’re having a hard time, start slow and close one financial product at a time. If you like how you feel, keep going.
A good goal is to have 1 credit card, checking and savings for you personal life and 1 credit card, checking and savings for your business. If you’re able to have all accounts and credit cards with one institution, great.
Otherwise, shoot for having the credit cards at one place and all of your accounts at another. This will ensure that handling your day to day finances requires very little thought or effort.
Step 2 To Improving your Spending Habits: Minimize The Temptation
The second reason we tend to have poor spending habits is temptation. Think about it, when you see $10k in your account, are you super conservative with your spending or do you buy whatever you want? And when you only have $1k in your account, are you doing a ton of online shopping or are you more careful?
When we have access to large amounts of money, we spend poorly BUT when there’s less available, we become more intentional with our spending. So let’s use this info to our advantage..
All we have to do is limit our access to large sums of money. How? By taking care of our financial goals and responsibilities first. Let me show you…Let’s say that your goal is to grow your savings and pay off debt and your responsibilities are to your living expenses and business.
Then, A check for $10k comes in from a client. Instead of keeping the $10k in your business account, you split it up into 4 quarters and send $2500 to your savings, $2500 to your debt, $2500 to your living expenses and $2500 to the business.
Then, you pay for living expenses from that account and because there’s only $2500, your spending improves. PLUS, your savings and business have money and you paid down some of your debt. Do this every time you get paid and now you’re accounts grow quickly.
Now, several things happen here:
We remove the temptation to spend carelessly.
We become accountable for how we spend.
We guarantee that each our financial goals and responsibilities get taken care of immediately.
This is what I call the Big Split Method and it’s what I teach all of my clients. Do it every time you get paid and your financial problems will dissolve. If you’d like to learn how to set it up in less than a week, schedule a free coaching session with me.
Step 3 To Improving your Spending Habits: Mend the Separation
The third reason we have poor spending habits is because we have very little connection to our finances. For example… How many monthly subscriptions and apps do you currently have? And how much do they cost? No idea right?
Have you ever been spending a lot and you know that your credit card balance is getting high and your bank account is low but, you don’t want to look to see how bad it is? I’ve been there many times. The point is, When we avoid our finances, It’s like a pile of laundry that keeps growing.
And when we use different credit cards, payment apps and put bills on autopay we quickly lose track of where the money is going. But there’s a simple solution..
When we log into our bank and credit card accounts often, it’s like doing laundry on regular basis. It’s faster, easier and the pile never get’s too big.
Let me show you how it works… Last week you spent $1k on your personal card and $1k on your business card. On Sunday night you log in to set up payments. Let’s say $500 to both cards on Monday and $500 to both on Thursday.
Payments for you personal card come from your personal checking, payments for your business from the business checking. and By making the payments quickly, you ensure that the balance doesn’t get out of control.
On top of that, you go into the next week knowing that you just spent a lot of money and so for the week ahead, you naturally pull back a little. By logging in each week to make payments and check balances, you become much more honest and aware of how you’re spending and you create a rhythm.
One week you spend and your bank balance gets low. You mellow out for a little and then when you get paid again, you can spend again. Now, instead of budgeting or tracking expenses, all you have to do is look at the number in your account.
And because your income and expenses fluctuate each week, when you log in, you’re able to anticipate your financial needs in real time. PLUS, when we pay our credit cards more often, the balance stays low, the smaller payments are easier to manage, we never pay interest or fees.
There’s a myriad of other benefits to this and I walk you through the process in more depth in this video but for now, I wanted to introduce you to the idea of regular financial checkins.
How To Improve Your Spending Habits - Session Recap
If you would like to improve your spending habits without having to sit down each week to budget, I invite you to try out 3 things…
Clear away the financial Confusion and streamline your finances. It's like having a Swiss Army knife instead of a cluttered toolbox.
Reduce the temptation to waste by taking care of your financial goals and responsibilities FIRST - It’s like packing your parachute before you jump.
And Reconnect to your spending and banking with weekly financial check ins. - Don’t wait for the pile of laundry to grow, instead to wash smaller loads more often.
And if you’d like to radically improve your finances in less a week, one on one with me - no communities, no group chats, fill out an application here. If w’ere a good fit, we can hop on a free call.
Thank you so much for your time and energy and thank you for choosing to show up for you!
- Lucas Z.