Business Budget Basics: How to Stop Playing Catch-Up & Finally Get Ahead | Lessons from the Sessions | 553

0:00And she was like, okay, but my payroll isn't consistent. and she was talking about how sometimes people pay and sometimes they don't. And she went on for five minutes how she was so stressed out about not being sure about her business expenses. And my one line to her was, we're just going to get you a month ahead. Yeah. And she was like, what? Oh, like she had no idea how to respond to that. The second it came out of her mouth, I waited for five minutes until she got it all out. And then that was my response because that's what we do. We get you a month ahead. We get everything prepared, everything going.

0:28Your budget is not a spreadsheet. It's not what you're sending to the IRS. It's not for taxes. It's not bookkeeping. It is a budget that is so different. And I think that people miss that. They miss that your business budget is not the same as what your bookkeeper and your CPA are using. And so when you can divide the two and separate the two, and you can see that we're putting money in your supplies account to buy all the supplies you need. It's a revolving door. Money is going in, money is going out. You will always have the cash for that. I think that there's a sense of release and pressure from that.

0:59Today, we're bringing you real life stories and lessons from our private coaching sessions. If our clients are dealing with it, chances are you are too. So we're breaking it down to help you avoid the same mistakes, feel less alone, and walk away with some quick wins for your budget. Do you make good money but have nothing to show for it? Are you tired of living paycheck to paycheck? Do you have big dreams for your financial future? Do you want to get debt free, but you don't want to live on beans and rice? Or you don't want to give up those pumpkin spice lattes? Hey, it's okay if you don't already know how to budget or if you're using credit cards to get through the month.

1:31Hey, it's okay if you want to seem like you have your finances all together or you're not on the same page with your spouse when it comes to finances. We know what you're doing probably isn't working, but guess what? You're in the right place. We're Shana and Vanessa. We're best friends, business partners, and master financial coaches trained by Dave Ramsey. We've been in business since 2019, helping hundreds of amazing people like you create budgets, get out of debt, stop living paycheck to paycheck, and know exactly what to do with their money. In this podcast, we'll share with you everything we know plus everything we're working on with our clients so that you have the best chance at reaching your financial goals.

2:06We want to help you take the guesswork out of your budget, improve your marriages, and even bring your kids in on the compensation. We can help you no matter where you're at, whether you're the single mom who's never had$500 in their savings account, or the millionaire who's paid off four real estate mortgages. And we're not going to shy away from the tough love. We'll tell you what you need to hear and encourage you at the same time. This is the Financial Coaching for Women podcast. All right. How many of you guys have ever been for spec writing? I have. Isn't it so fun? That costs a lot of money for the business owner, right?

2:38So it's an equestrian business and there's a lot that goes into it. And I have a lovely client. I've been working with her for a while and she has some costs guys like those vet bills they ain't cheap forces just letting you know in case you were ever wondering we were we've been trying to set up her savings buckets so one of the things that we for a while now have been trying to figure out how much does her business cost her not necessarily on a monthly basis right because that's easy you can do your monthly bills your electricity your water bill your insurance all that stuff but what are all the things that happen throughout the year that aren't necessarily monthly.

3:14Maybe like she has fly medicine for the horses. She has her vet bills. She has supplements for them. There's a lot that goes into owning an equestrian business. And so she thought that, hey, if I just get my savings buckets up to the number that I need, then I don't have to fill them again until next year. That's so sad. So she's like, I just start in January and I feel I'm done. And I said to her, what about that property tax bill that's coming due in January? If you stop funding these and you use all the money from January to December and you decide to not fund them again, how is that bill gonna get paid?

3:51And I said, the purpose of the savings buckets is that they're a revolving door. You're always putting money in and money is always coming out. So once you know the true cost of your business for the year, that number that you're putting into that account doesn't change, it doesn't matter if it's December, It doesn't matter if it's January. It doesn't matter if it's March. And so once we figured that out, when she understood like the full concept and the purpose of the savings buckets, it all changed for her. And she also had an assistant who was coming and trying to help her do the books. And the girl didn't understand because she's like, wait, all the savings, but the money's going into savings.

4:24That's just profit. And I was like, girl, no. Those are all, that's money going into - Yes. It's money going into account to save for upcoming expenses. And just, I want you guys to remember as you're making your budget, whether you're personal or your business, the savings buckets are a revolving door. Okay. That's always money. Money is always going in as you're continuously paying for something. Now, let's say you have an expense for something that's just this year. That's fine. So that expense, that one small expense will come out after it's paid for, but you're probably going to end up putting something else back in there, right?

4:56Yeah, it can. So what would potentially happen is if you have to be putting more in to catch up to right now. So you're starting and the bill's due in three months. And once the bill's due and you pay it in three months, then you'll have a number that will be nice and even that you'll keep doing for the entire year. And this is really nice because it helps you get ready for the future. But also one hidden benefit of some of these is it really does make your bills account less crazy because like I was bragging on Vanessa to one of my clients who has a business, how we have no bills. We have no bills in our monthly budget.

5:34We have what, five? Yeah, maybe, maybe. I think we just deleted one today because they're all, she's moved them all over to annual bills, which is fantastic because we save money, but it also saves clutter, right? Instead of paying those bills every single, every single month, we're paying them annually. So it's like just a little bonus win. But the idea here is to actually, and the same thing goes for your personal budget, but obviously with a very expensive business, it's really nice to know you have these things saved ahead of time that you're covered, that you're not wasting profit on stuff that you don't need or that is less of a priority than actually paying your horse vet bill or whatever you are saving for.

6:10And it really does set your business up. And I think the first thing that you said, Vanessa, when you open it is like, what does your business cost? What does your business cost is going to take the wrecking balls and the rat race out of your head and put it on paper and then be honest and let's really look at the numbers and how do I get there versus just trying to play like month to month, week to week, hoping that it's all going to work out. That's not, that doesn't not make you feel good. And nobody wants to do that. No. And also your accountant will love you. Your bookkeeper will love you.

6:38If you can move as many of your bills as possible to annual, because you get one bill a year. One receipt you have to reconcile. I've learned that. Instead of 12 for however many subscriptions that you have. I see what you want me to do. But I will say that a lot of our monthly bills that we have on our business is because they don't offer annual subscriptions. She's throwing shade. No, I'm being serious. They're throwing shade at these people that don't offer it. Oh, yes, I am. That's what I'm doing. Let's pull up our budget and call them out publicly. By name, yeah. Call them to the townspeople.

7:07Yes. So if you are somebody that offers subscriptions, please allow an option for annual. It just helps us business owners. It's so much easier. Plus, a lot of times, like Shayna said, we do get a discount. So if you can just save up enough money to get that annual subscription for something, you can save big plus, again, less clutter. It's time to enter your coaching era because making good money should feel like making good money. Yeah. Imagine six months of private coaching where we'll tell you exactly what to do. No guesswork, no confusion, and absolutely no judgment. It's a done-for-you system that actually works.

7:41You don't know what you don't know, and that's not your fault. And that's why we're here. Financial coaching with us looks like two coaching sessions a month, personalized recaps, and after-hour support, you can text and email. So you're never stuck wondering what to do next. Together, we're going to build your budget, set up your system, and tackle any challenges that come up along the way, which, by the way, they always do. If what you're doing isn't working and you're tired of trying to figure it out on your own, sign up for financial coaching at budgetbesties.com forward slash coaching before all of our spots fill up, and we will help you go further faster.

8:13six months from now you'll wish you started today we're talking about expensive businesses i have i want to go we should take a field trip and go to my my my client's business it's i can't say i don't want to say the name but anyways she runs a restaurant tavern it's super cute and it's named it's got her name in the title and everything so i just love it or in the name of the business but it's expensive you guys like the actually her payroll is really cheap and her bills are cheap her supplies. The constant going with food, ice, beverages, all of that kind of stuff is very expensive. Obviously, the more she makes, the more she has to buy.

8:49But also, the more people come in, the more she'll make, but also the more she had to supply. Either way, it's not only expensive, it's very cluttered. And it was keeping her awake at night, as you can imagine, with vendors that do at least 20 vendors that bill weekly. And that's just the ones that bill weekly. Then you have the other every other weeks. And then you have it's just and those are vendors. So that's supplies. And she still has her bills. And she has a lot of bills for to run a regular business between insurance and all the other stuff that she can't necessarily take away. Right. Like we did take away like one of hers.

9:21She eliminated a couple to save on save some money. Anyway, long story short, finally, we have gotten to where we have the separate accounts. And she was going she went from having to deposit because they're a cash based business for the most part, most of most of everything goes in cash. She went from having deposit like three times a week to go to be able to afford tomorrow's vendor bill or tomorrow's payroll or whatever it was to now Monday, she goes in, they're closed on Monday. She puts everything in for the weekend. And then on Friday, she'll go and make another deposit, which with this much turnaround in a restaurant, I don't think that you necessarily can get away from that, but she is, but she might, she might.

9:56And she has been scrambling. So anyway, we have, just like in your personal business, we have set up a spending supplies is what she calls it over there and that's for all her vendors and our goal is just to keep enough money in there that it just always can pay the vendors whatever is happening with the vendors we're gonna it's gonna it's literally 50 or more i can't remember of all of her revenue so that's always going every time she makes a deposit 50 is going over there she's got a certain amount for payroll and then her bills account can just pay bills and who knew your bills account was going to be the like least or yeah literally the least cluttery of your accounts because she has payroll, which has got probably almost as many transactions going on between all the servers and people that she pays and the taxes that she gets to pay and all that.

10:38So anyway, long story short, she was able, she finally bit the bullet or ripped the bandaid. I told her, I told her because my daughter was interested, I'm going to take this dirty bandaid off of my daughter's knee and mail it to you. If you don't rip the bandaid and do this, because the cycle she was in, the losing sleep, the having to figure out who am I paying next to tomorrow, I said, you've got to do it. It's going to make your life better. She finally did. It did help. She got a wedding deposit, which allowed her to get ahead. So now she can actually get on this cycle of depositing, dispersing money according to how much money needs to go into the payroll, the bills, and the supplies.

11:12And now she's ahead and she just has to maintain that. And she didn't have to go to the bank every single day. And it's just amazing. I think that is in a business like that, when you're constantly having to go to the bank and make deposits or feel like you have to, because you're so quote unquote behind and you don't know what's happening next, or if you have the cash to pay for it. I think opening up those separate accounts, even though we do get a lot of pushback from it, I'm going to be getting because people are, it's scary. It's the unknown. It's unsafe. It's not, it's something that they're not used to outside of their safe zone.

11:40So they don't know how to handle it. But once they open up these separate accounts, especially in business, it is amazing to see how organized their finances. So that way they can know where everything is coming. So you said, yes, she has payroll account right to our payroll or business or spending like all of that is super organized and it allows you again to not be frantic about this person sells and cast her check it's been two weeks what am i supposed to do how do i make sure the money's in there i have to document that all of that is no longer in your brain you have to worry about it it's all taken care of there's a side bonus here too which is she's currently we don't even have enough spaces in our budget for the amount of bills that she has from supplies for vendors but i told her we don't have to do We don't need to track that.

12:22Just like in your personal, we don't want you to track every time you go to a restaurant. You don't need to do that. If you need to see it, it's in your account. You can see every transaction. You're welcome. The same needs to be able to happen for her business. She can go back and reflect on what she paid everybody. But I said, you're not an accountant. You're not supposed to have to do this. I said, do you pay an accountant? Congratulations. That's their job, not your job. And so if we can just keep enough money into these.

12:52Hi, Odie. I'm so glad that you needed to come in here with your thingy. Ah, yeah. Cheers. Okay. Anyway. You can keep enough money. Yeah. So if you can just keep enough money in that account, everything will get paid. You will have it documented. Your accountant can go back and print out everything if you need it. But you don't. And you can monitor it. You can say, hey. What's the revolving door? Hey, grocery guy, why did you charge me? But it's in your account. You don't need to track every transaction in your budget. Like we're trying, you're a CEO. We're trying to take you out of this like little grindy things that you don't need to be doing.

13:28But I think that is when we tell people, I had a lady yesterday on a free call that's going to join us for coaching. And she was like, okay, but my payroll isn't consistent. And she was talking about how sometimes people pay and sometimes they don't. And she went on for five minutes, how she was so stressed out about not being sure about her business expenses. and my one line to her was, we're just going to get you a month ahead. Yeah. And she was like, what? Oh, like she had no idea how to respond to that. The second it came out of her mouth, I waited for five minutes until she got it all out.

13:56And then that was my response because that's what we do. We get you a month ahead. We get everything prepared, everything going. Your budget is not for, it's not a spreadsheet. It's not what you're sending to the IRS. It's not for taxes. It's not bookkeeping. It is a budget that is so different. And I think that people miss that. They miss that your business budget is not the same as what your bookkeeper and your CPA are using. And so when you can divide the two and separate the two, and you can see that we're putting money in your supplies account to buy all the supplies you need. It's a revolving door.

14:26Money is going in, money is going out. You will always have the cash for that. I think that there's a sense of release and pressure from that. Yeah. And since we're just giving all the business lessons, I'll just end this lesson with that that is also on top of that. Use cash injections wisely. so they got this deposit and it was it's fantastic for her deposit is basically the profit right when they go to deliver obviously they're going to have cost incurred but that is going to be the rest of it like she's got to figure it out with a profit that's all profit that she gets when you get a big payday or when you get a big client or whenever let's do it on purpose don't a lot of times we're like woohoo party let me go get this new coaching program or let me go do whatever i I don't even know what you do, but don't do that.

15:09Or you take it personally. Right. Or, oh, I get signed for a minute bonus. I have a client that takes paychecks. I said, you can't afford to take paychecks. You've got to pay like your vendors and your bills and whoever. So the point being, use this wisely. And then likewise, maybe the summer or the spring for your client that has equestrian, for mine that has the restaurant, maybe there's a season where you get a lot more money or you get a lot more revenue, you get a lot more business. It's whatever. whatever, let's set that aside and be very diligent and smart about using it for maybe off seasons or other things instead of just, I made more, so I'll spend more.

15:41That's usually, that's whether it's business or personal, that's where our brain goes naturally. But instead, you're going to be super smart and not do that. Yeah. And the other half too, really quick, I'll say is if you have debt in your business, if you can pay off that debt in those high months, so that way when the low months come, your business, less expensive, you'll have less expenses. And so that way your business can naturally function off of less income now, because you no longer have those debt payments. So just think about that. It's something that I've been working with my client.

16:05She's got one debt left to pay off in her equestrian business. We're very excited about it. It's definitely going to help her in those off months, like December, January, when she doesn't have as much as many writers. If you're tired of feeling like your finances are all over the place, and you're ready for a simple set it and forget it way to budget, we have something special for you. Watch our automate your budget masterclass at budgetbesties.com forward slash automate. We'll show you step-by-step how to finally organize your money, how to set up your account, and put your budget on autopilot.

16:34So your bills, saving, and spending run like clockwork. Imagine less stress, more savings, and the freedom to spend money without having to track every dollar or babysit your bank account. Go to budgetbesties.com forward slash automate to start today.