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Changing your Financial Mindset (Part II)

Oct 14, 2024 5:27:51 PM Kathy Dise Small Business, Financial Management, Bookkeeping, Profitability, small business bookkeeping, payroll, Virtual Bookkeeping Services, Online Bookkeeping Services, Cleveland Bookkeeping, Bookkeeping Companies, QuickBooks Bookkeeping Company, Financial Mindset, Financial Journey, Growth Mindset

Changing your Financial Mindset (Part II)
5:00

Finance mind

 

 

Improving your financial mindset is a journey that involves both mental shifts and practical actions. If you have anxious thoughts about money here are some steps to help you change that mindset so you can spend your energy in more important ways like marketing your product/service or enjoying your family: 

 

1. Identify and Challenge Negative Beliefs 

  • Self-Reflection: All small business owners have lean times, and you will, too.  Don’t let your mindset lay the blame on you. Take time to reflect on your beliefs about money. Are there negative thoughts that hold you back, such as “I’m bad with money” or “I’ll never be debt-free”?  
  • Challenge These Beliefs: Replace negative thoughts with positive affirmations. For example, instead of, “I can’t manage money;” say, “I am learning to manage my finances better every day” or “I can get through this rough patch.”  

2. Educate Yourself 

  • Financial Literacy: Invest time in learning about personal finance. Many free resources are available, such as online courses, books, and podcasts. I recommend “I Will Teach You to be Rich” by Ramit Sethi to build your financial literacy and “Simple Numbers” by Greg Crabtree that covers all you need to understand your financial reports better. 
  • Stay Informed: Keep up with financial news and trends to understand the broader economic context and how it might affect your finances. Possibly find a podcast that covers this topic for you that you can listen to as you walk Planet Money and Motley Fool Money are two of my favorites.  

3. Set Clear Financial Goals 

  • Short-Term Goals: Identify immediate financial goals, such as saving for cash to sustain challenging times (we recommend 6 months of fixed expenses) or paying off a specific debt.  
  • Long-Term Goals: Plan for the future by setting goals like adding a new product line, taking more time off work, adding a sales manager, enhancing employee benefits, or paying yourself more. 

4. Create a Budget (every BudgetEase client gets a budget! They are that important to your financial security) 

  • Track Your Spending: Use budgeting tools or apps to monitor where your money goes each month. QuickBooks’ Profit and Loss by Month and Expenses by Vendor Summary reports are great to easily see where your money is going.  
  • Increase Revenue: You can increase revenue by increasing prices, adding new clients, or offering more services to existing clients.  Pick one to start but revisit the other two soon.  Usually, more revenue means more money to the bottom line and less anxiety about money.   

5. Seek Professional Advice 

  • Financial Advisors: Consider consulting with a financial advisor, your bookkeeper or your accountant to get personalized advice and strategies.  

6. Practice Gratitude and Positivity 

  • Gratitude Journaling: Keep a journal to note what you’re grateful for, including financial successes, no matter how small like a new client or a small increase in your cash balance. I use the Oak Journal which starts each day with me listing 3 things that I am grateful for.   
  • Be Philanthropic - Giving to others also provides a sense of prosperity.  
  • Positive Affirmations: Regularly remind yourself of your financial strengths and the progress you’re making. 

7. When Bad Times Strike (and they will) Take Action 

  • Minimize the Repercussions of a Tough Time: In our household, we are two small business owners and there have been years when money coming in was scarce.  As a result, we drastically scaled back. Some years we turned off the heat and cable and only got entertainment from parks and libraries.  It is nice keep expenses down during lean times so there is less debt to pay back.   
  • Embrace Mistakes: Understand that financial mistakes are learning opportunities. Analyze what went wrong and how you can improve. 
  • Continuous Improvement: Commit to ongoing learning and improvement in your financial practices. 

8. Take Action 

  • Small Steps: Break down your financial goals into manageable steps and take action regularly. 
  • Consistency: Consistent, small actions can lead to significant improvements over time. 

By incorporating these steps into your daily routine, you can gradually shift your financial mindset towards one of growth and positivity. Remember, it’s a journey, and every small step counts! You will be surprised by how quickly you can turn around a negative mindset. We see it all the time, stay the course and before you know it, your positive financial result will blow your challenging thoughts about money away.  If you have any further questions or need additional information, BudgetEase is here to help!   

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Kathy Dise

Written by Kathy Dise

Kathy has over 30 years experience helping small businesses succeed. As a commercial lender, commercialization expert and now as a QuickBooks diamond level advisor, Kathy understands the challenges small business owners face. Her experience helps business owners quickly accomplish their financial goals. As the owner of BudgetEase, Kathy works with clients to develop a plan to efficiently process 1,000s of small transactions so owners can make informed decisions. She lives in Shaker Heights, OH with her husband Ralph and enjoys golf, curling and walking in Cleveland’s fabulous Metro Parks.