The B Word Isn’t a Bad Word: Why Budgeting Is the Key to Freedom, Not Restriction | 458 (Reair)

0:00Financial Coaching for Women hosts:Hey, besties. We're replaying one of our favorite chats from another podcast with our friend Judy Weber from the Bold Business Bold Faith podcast. Now, I want you to imagine this. Your bills are paying themselves. Your savings are growing without you lifting a finger. And you're investing in your future like a pro and all this happening automatically. This is the work of my guests today, Shana and Vanessa, known as the Budget Besties. They're the hosts of the top 10 podcast, Financial Coaching for Women, and they're best friends and business partners on mission. to redefine personal and business finance for women worldwide.

0:33They're master financial coaches who help women really take ownership of your money with a budget system that fits your real life and your big dreams. Let's welcome these beautiful ladies to the show.

0:43Financial Coaching for Women hosts:Thank you so much. Yes. Our here, Judy, to talk about the B word. Ooh, yeah. B word meaning budget? Yes. It's very taboo, we've heard. People don't like that word. They run from it, right? I love how you ladies are unapologetically calling BS on traditional budgeting. I would love for you to first tell us what traditional budgeting really is and what is your way of budgeting. Yeah. The main thing that we're calling BS is tracking. What we think people think of when they're budgeting is they have to track everything that they've done, every expense, every time they spent money, they have to go back in account and reconcile.

1:15And all these boy words, honestly, Judy, reconcile, fix expenses, variable. Oh, no, it doesn't have to be that. It doesn't have to be complicated. It can actually be much more simple. I actually heard on a podcast this morning, I think I was talking about tracking.

1:25Financial Coaching for Women hosts:The first thing you want to do is chuck all your expenses. And I thought, I don't have time, nor do I want to have time to do that. I think another thing that we call BS on is the idea that a budget is restrictive. A lot of people hear the word and they think that means no. Like they immediately, that's what they equated to. And we're here to tell you that. No, we think it allows you to be able to spend your money, save your money, buy the things, do the things, live your dream. But you have to have it in order to make a plan for yourself. Yeah, we say you can be bougie on a budget, Judy, and we believe it.

1:51I love that. I feel like your whole thing is the gurus say budgeting is restricted, like tie you down to say no to things. You're saying budget is your ticket to freedom. Absolutely. Especially, Judy, we're old friends. We've been on podcasts together now. So as we were talking about with men, women have a special role when it comes to money. And what I see and know when it comes to women is they're responsible for a lot of things with their money. And they are usually like, I don't understand where it's come from. They're very anxious. And there's a lot of worry that comes back and forth with, do we have enough money for food?

2:18Do we have enough money for field trips? And then don't even talk about adding in a business. hello, that's a whole, let's just double all of that anxiety to your exact point. Yes. Knowing your money, knowing your budget gives you freedom from all of that control and freedom.

2:29Financial Coaching for Women hosts:They're holding a lot of weight. So a lot of our clients, they don't want to, it's not necessarily they're hiding it from their spouse. They don't want them to have to deal with it. So they're trying to handle it and deal with it on their own. And there's just a lot of baggage, a lot of frustration and shame there. And so we really have come in and helped women just turn their finances around. And then they're like, Hey babe, look at this. Look what we've, look what we're doing. Look what we're now accomplishing. And they're doing more with their money. Now each of them have spending money. They're able to go on that vacation.

2:51Financial Coaching for Women hosts:Also, they're saving. Like, there's a lot happening. But it really was just organizing and setting up systems, which we know that you love, which we love, to allow them to do the things that they want to do. Yeah. You know what always never ceases to amaze me? How women come to me and they haven't yet separated their business money and their personal money. So many times. I really want to speak to that. Yeah, I want to speak to the importance of why every business owner needs to have a business account and then to your way of separating business from personal money the right way. Talk to us about that if you would.

3:20Well, first of all, listen, get ready, like lock in because we're ready for you to have so many bank accounts. And don't worry, it's going to be fine. We're all going to get through this together. And on the other side, it's going to be wonderful. But absolutely, one of the biggest problems overall, Judy, overall with budgeting is we're trying to do everything in one account and act like we can even understand or scroll enough to figure out what's happening with all these transactions. That is what's making it difficult. Okay. We are not using grandma's budgeting system anymore. We've got way more things going on with our finances.

3:45So we really do absolutely first step. You have to have business accounts separate, separate, separated from your personal account. And then once you've done that, we actually want you to have separate business accounts. And Vanessa can speak to this and separate personal accounts that make it even more simple, even more clear about what's happening with your money.

4:00Financial Coaching for Women hosts:Well, you know, first of all, your CPA will love you and your bookkeeper. So, you know, the idea of having it organized and separate when you come actually heard somebody on the podcast talk about the only creditor you never want to really piss off is the IRS. So it's like, if you, and that really starts with your account, that starts with knowing what's going on with your finances. So if we can keep that separate and organized, and like Shayna said, within that, we actually recommend you have multiple checking and multiple savings for your business and for your personal. But hold on, don't check out yet, guys.

4:24Financial Coaching for Women hosts:A lot of people will hear that and they'll go, oh, but stop. No, I can't even handle one account. How would you expect me to handle multiple accounts? But the reality is that what we've seen is it's actually easier for your business to have a couple extra accounts to keep it organized. If you think about cash envelope system that we're also familiar with. We're just taking that into a digital form and having an income account that shows exactly what you made, especially for businesses that have irregular income, right? You need to be able to have an account that pools and has your income in it.

4:49Financial Coaching for Women hosts:And then you send what you need for monthly expenses into your OPEX account, which is your operating expense account. So that account is all of your reoccurring bills. So that's another checking account. And all you have in there is all of your bills that you are spending on your business. And then we recommend having a business spending account, which is what you go by, you know, take a client out to lunch on, you buy stuff on Amazon, you need stamps, you're purchasing stuff for shipping. Like in order for you to really see where your money is going in your business, we recommend you need to separate it and organize it.

5:16Financial Coaching for Women hosts:And so that way, okay, this is what I'm spending every month. This is what my business expenses are as far as bills, right? And then this is my income. You can really clearly see what's going on. And I just want to say real quick, Judy, what we know is you are very successful. You're very smart. We're talking your listeners, we know you are good at what you do. Like we said, God has called you. You're doing it. That's awesome. What we don't have is an expectation that you already knew this or that you were doing it right because no one has ever shown you. Like I said before, personal finances is hard enough, let alone let's add business.

5:45Like that's put that at the bottom of the list of anything that any of us ever wanted to learn about business finances. Hey, okay. Except for Vanessa, she gets a gold star. But so just give yourself some grace and understand that we don't expect that you already knew this. But you do want as that CEO, as that high achieving woman, you're going to need to take ownership of it. And what we're telling you is by separating it, it's going to make it easier and more clear. And you're going to be able to actually set up a system instead of something that you have to keep relearning, keep retrying, tracking, accounting, reconciling.

6:09No, thank you. We don't want that for you.

6:10Financial Coaching for Women hosts:And what it allows is like, if you know exactly what your business costs every month, you can set an automatic transfer. Here's that automation, the automatic transfer from your income account into that OPEX account that is paying your monthly bills automatically. So every month that money is going in and you know that your monthly bills are taken care of. And the same concept for that business spending account. If you say, okay, I am going to give myself a$500 a month budget for Amazon purchases, office supplies, whatever that looks like. If you're a chiropractor and they have different tools, if we have massage therapists, they have oils and stuff, right?

6:36Financial Coaching for Women hosts:So if you have a certain amount of money that you're allowing yourself to budget in for spending, guess what? That automatically gets transferred into that business spending account and holds you super accountable to that number, right? So instead of it all being in one account, trying to figure out how much is this and how much is that? Oh, I didn't have enough for personal groceries as much. So I'm going to use my business card to pay for personal groceries or my kids. I accidentally grabbed the wrong card and I swiped it for a medical copay, right? All of that is so convoluted into one account.

6:58Financial Coaching for Women hosts:We really need to separate it out. So good. Here is an issue that even my mastermind clients have, and it is cash flow problems. Even though their monthly revenue is good, like$20 ,000,$30 ,000,$40 ,000 a month, when they look at what's left, a lot of times it's less than they expected. So what would you say to her to get a handle besides what you've already said, which I think is a great systematized and automated way? Well, it's just like with what we deal with personal finances. It's because you don't actually know what your business costs in a month. And that is what we would start with. We would say, get your very simple one page budget out, list all of your expenses.

7:32Let's really see what it is. Maybe you're in Judy's program and you're paying for coaching or something like that. That's in there. Also the canvas description. It's just like with your personal, there's all these random things that you're paying for with your business. You might have payroll and you don't, you haven't figured out yet how to get ahead of that, right. And understand how to keep that part of it. You also need to be saving for taxes. And when you actually look at it all on paper, this is what happens all the time. I'm making$40 ,000. Oh, but my profit, like what I'm actually making after everything's said and done is not there.

7:56So the first thing we'd say is just get it all on one paper so that you can see what's really going on with your business. And especially with what Vanessa said, with what you're spending, because a lot of times I've seen a lot of business owners, they just spend and there's no, and therefore not necessarily stuff that you need to. We want to grow at the speed of cash, right? And then there are trouble. I'm not actually making any money. I'm not actually able to pay myself. And now I'm spending all of this time and effort on a business that's making all of this money, but I don't get to keep any of it, which is not, Nobody wants that.

8:20Financial Coaching for Women hosts:And if you're a service-based business, ideally, you should be the most profitable. It's the businesses that are not, that are like, they sell tangible things. So you should be profitable. If you're not, you have got to take a look at your numbers. And we coach a lot of business owners that are personal clients that have businesses. So we have to do both. All right, budget besties, it's time for some real talk. You don't need another budget. You need a budget system. Our simplified budget system is what you've been looking for. It's going to allow you to be bougie on a budget. You'll be able to easily set up a system that runs automatically and shows you exactly where your money is going.

8:54Financial Coaching for Women hosts:And it's going to give you permission to spend. Everybody loves that. Yeah. It's straightforward, pretty, and packed with walkthrough videos that break down the exact methods we use with our clients to get out of debt, set up a bills account, separate spending, build savings buckets, and end the paycheck to paycheck feel. If you're new to budgeting, this is the perfect way to jump in. And if you're already a budget nerd like us, you're about to meet your new obsession. This is the upgrade to your finances that you need right now. Yeah. So head on over to budgetbesties.com forward slash budget and grab yours.

9:27Financial Coaching for Women hosts:Now back to today's show. You cannot just do your personal budget and forget about your business. You can't just do your business budget and forget about your personal. It all flows into each other. And so you have to do both. You have to see what you cost. And to Shana's point, you need to know what your business costs monthly. But here's the caveat to that. what you cost monthly also needs to include what you pay on annual subscriptions, your annual licenses, all your annual bills, plus your taxes. You need to take all that and divide it down and put it or apply it, whatever you need to do, and then divide it down into, okay, what does that cost me monthly?

9:56Financial Coaching for Women hosts:And put that in your budget so you can get a full picture to go, okay, it's not that this month, my business costs me 5 ,000 and next month that costs me 20 ,000. It's no, we are making your business expenses the exact same every month for the entire year. So you can see some consistency because guess what? You're the business owner and you deserve to have that. and you get to make that happen. Yeah, yeah. Like Vanessa said, if you can't afford it, you can't pay for it. But what, like we said, once we get stuff on paper with our clients, it's like, do you see why you're having quote unquote cashflow problems?

10:21Because everything that pops up, I need that new program. I need that email marketing. I need that. I don't need the free versions of everything until I get two six figures. I need every right. How Vanessa will say, when we move out, we're like, I'm gonna get the new house and the new furniture and just be like, just like my parents when I'm 20, it's gonna be fine. It's like that. No, your business needs to grow as your income grows. You can get, you know, we think Once you hit a new milestone, is there a hire, for example, like an admin or something that you want? Or is there a better program that's going to help you, like Judy teaches, do more marketing, do more automation?

10:45But that's not where you start. And you have to see those numbers and be okay with them and let there be some margin, right? And let there be cash flow margin.

10:52Financial Coaching for Women hosts:Well, as a multi-six-figure business, there are still versions of things that we are using. We're using the free versions of things. We haven't upgraded yet to the paid versions of some of it because we can see the value in the free version now. And that's fine with us because there are other things that we are spending our money on because we are not. We are one of those that want to do what we say. So we are growing at the speed of cash. The very first budget we ever made in our first month of business, we were$40 profitable. Watch out. Okay. We were very excited about that. But we were growing at the speed of cash.

11:19Financial Coaching for Women hosts:That's where we started. Good. That's so good. And that's a good word because I think that entrepreneurs, it's so easy for, is a side note, but it's so easy for vendors to find us and pitch us things. And they make it seem like we need it. Russell Brunswick's top end, whatever, or now go high level, you know, all these different softwares. Yeah, we want them, but do we really need them? We really need to be intentional and strategic and it can be tough to evaluate. Yeah. Judy, what I want to say is, did I earn them? So that, I want that question to sort of marinate in your mind. So I remember I had, I have a client, it's so fun also, all these cool businesses.

11:52She is a pitching softball coach. That's what she does. It's very niche gen, love it. She wanted to get this coaching program that was going to teach her whatever. And I said, okay, you need to go out and kill whatever it is that you want and bring it home. So this program costs, this is how many clients that is for you to be able to pay for it. So think about if I really think that this thing is going to take me to the next level, what can I do to earn it and not stress out my business budget? Because that's not fun. And like Vanessa and I was sort of like a business wish list, right? Like we did a national research study that cost$25 ,000.

12:18And we had to, we specifically set aside all of our profits from our launch last year to be able to pay for it. So you can be intentional. You can get those big ticket items, but you have to do it on purpose. Because the other one quick thing that I want to say is what we've noticed is women treat their business. I can just spend this money. It's not like they may be more conservative in the personal budget, but sometimes they're like, oh, it's just business. It's a business expense. It's a business right off. No, we want you to be intentional with that. Yeah. That's a good word. That's a good word.

12:42All right. Let's talk about using your bank like a personal assistant. I love when I read that.

12:49Financial Coaching for Women hosts:Well, I think a lot of people forget the amazing tools that your bank app has. They feel like they need to seek out other apps and systems and whatever, like third party apps to be able to make some of these things happen for them. But the reality is we want your bank to be your personal assistant. And what we mean by that is it allows transfers, not just regular transfers, but automatic and reoccurring transfers, right? So what we want you to do is figure out when you make your budget, how much money do I need for my business expenses, personal expenses, business spending, personal spending. There's so much more to go into as far as like how to set up your budget and what you need to do there.

13:22Financial Coaching for Women hosts:But as far as the automation part of it, once you figure out those numbers, then you can go to your bank app and go, okay, from my personal bills account, from my business income account, how much do I need to transfer to my bills account and my spending accounts in my OPEX account to be able to fund my business. And you can set those up, be occurring and automatic. So that way it's hands off. Like we know that if your hands are in it, if you're messing with it, chances are it's probably gonna get messed up. Love you. But that's just what we've seen. We've seen the more manual that the process is, the more that we just totally mess it up.

13:51Yeah, let me give you just a quick example. So, cause for me, we're both visual learners and we can't show you with my hands, but maybe it'll make sense. I have a client that is, she's an anesthetician. So she has her own spa, okay? So she has an income account for her business where everything that she makes gets dumped into there. Just all, you know, a lot of businesses have this problem. Like I get money from Square and Venmo. Every income possibility is hooked up to this account and it pools there. And every Monday, she personally makes a transfer to her OPEX, right? So depending on some variables, but she will put money in OPEX.

14:19And then that's all she has to do. That's all, literally, that's all she has to do, Jenny. So she moves money into the OPEX and we have a minimum baseline budget that she has. We know that she's gonna basically bring in the 20K. We know that's gonna happen. So then everything else happens on Magli. On the 1st and 15th, her OPEX pays her personal account, her paycheck, the first and 15th, every time she doesn't have to do anything with that. Her OPEX pays her spending account. So she's got her supplies account, right? So she's got to get all of those, I don't know, eyebrow things or whatever people do.

14:43And then her bill, her OPEX account pays every bill for her. She doesn't go in and do anything. She just has to, as an entrepreneur, look Monday, look at the numbers. Like you want to know your numbers, look at it and make that transfer. Everything else happens. And by the way, just really quick side note over in her personal account, the same thing's happening. That paycheck drops. And then the next day her grass and groceries are funded automatic. The bank has separate accounts and it transfers to the different accounts for spending. It pays her bills automatically. And she has a little savings account and she has a dog that's a French poodle and her name is Twyla and she has a little account for Twyla too.

15:11It can be whatever you want it to be. But the point is banks can be your personal assistant. You can have several accounts. You can rename them. You can set up, like Vanessa said, recurring automatic transfers. You can put notes on the transfer so you remember what happens. You can hide certain accounts. So if you have a really good savings account that you might be tempted to pull, you can hide it. There's so much your bank can do to be your personal assistant.

15:27Financial Coaching for Women hosts:So I just want everyone to hear like the amount of automation and systemization that Shana just explained, right? Think of how much easier and simpler your life, not just your personal life, but your business life would be if you just took the time one time to set all this up, figure it out, and then just set it and forget it. Now, business is one less set and forget it than personal because of the variables. So like she said, she goes in there every Monday and looks at the numbers and makes us that one manual transfer. And then all she has to do is make a one manual transfer and everything else happens automatically.