Running your own business means you’re thinking about money all the time, but are you thinking about the right things and do you have the right money habits?
We’re not those people who believe money is EVERYTHING and we’re just aiming to squeeze every last dollar of profit out of our businesses.
However, we do believe in using your business to fuel a spacious, calm lifestyle, and more money certainly helps alleviate stress and gives you more choices of how to spend your time.
There are two important money decisions we want to share with you in this article. Neither of them are groundbreaking in theory, but both of them drastically changed our financial situation by putting us more in control and shifting our mindset around money.
Important Money Decision #1: Mandatory Weekly Budget Meetings
There was a time not too long ago when we were afraid to log in to our bank and credit card accounts. We thought if we ignored the financial truth of those accounts, mysteriously all our money problems would just sort themselves out. However, that is a tactic that simply does not work.
You HAVE to know your numbers in order to grow your numbers. Meaning, you can’t just ignore your finances and HOPE that your financial position will change.
When we were $100,000+ in debt a few years ago, it felt like we were climbing a money mountain that was insurmountable. But the single game-changing decision that turned the tide for us in getting out of debt was to finally commit to having weekly budget meetings where we had to actually look at our numbers.
The first weekly budget meeting sucks, then each week after gets easier
We’re not going to lie to you, that first weekly budget meeting can be like a punch to the gut. But, once we were through it, it allowed us to take back control and actually make a plan for how to pay down our debt and work toward some of our financial goals.
As we moved forward, our weekly budget meetings got less painful. Sure, more money didn’t just magically show up because we started reviewing our finances each week, but it became less uncomfortable to confront our financial reality.
During one of our early weekly budget meetings, we decided to look at paying off our debt like a game.
Every expense tracked was a new item we discovered.
Every bill we forgot about was an unexpected mini-boss we had to battle.
Every dollar of income was a shiny gold coin that could get added to our ledger.
When our debt mindset shifted from shame to game, that’s when things got less stressful and when our plan became less daunting!
Further reading: We wrote an in-depth article about our full debt payoff plan and how we paid off $124,000+ in debt in under 3 years.
You might be wondering: Do we still have weekly budget meetings? And the answer is YES! Even many years later, completely debt-free, and with businesses that generate 5x the revenue, we continue to have weekly budget meetings because it keeps us in control of our money!
Important Money Decision #2: Setting “Enough-Based” Financial Goals
“A million dollars isn’t cool. You know what’s. “A million dollars isn’t cool. You know what’s cool? A billion dollars.” Thanks for the fun movie quote, Sean Parker, but this type of thinking is what keeps people striving for goals that are unreachable OR reachable with loads of stress.
We want to make it very clear: Whatever amount of money you want to make is totally fine with us! But… We just ask that you take a hard look at your day-to-day life, your specific circumstances, and uncover a financial goal that’s suited to YOU.
We all see it everywhere, people talking about making six figs ($100,000+) and seven figs ($1m+). Again, if those numbers can be broken down and aren’t arbitrary, by all means have them as goals.
However, what we’ve found is more helpful is to set “enough-based” financial goals.
How much money is ENOUGH to live a good life?
Very quick story from Jason 👨🏻🦲:
- Back in the early days of my career (2009) I always said I wanted to make a million dollars. But I couldn’t tell you what that meant for my actual LIFE. What was I going to use that money for? How would it bring me more of the things I wanted? What were the expenses my business would have to earn that much revenue? I hadn’t even thought about any of the details, I just wanted to hit that arbitrary milestone. And want to know what happened? Chasing that $1m dream led to me being the unhappiest, most stressed, and most in debt I’d ever been in my life.
When we started Wandering Aimfully (WAIM), we decided to take a different approach. It would’ve been easy to say, “let’s have WAIM make $1m per year!” Instead, we learned from Jason’s mistake and asked an important question: “How much money would be ENOUGH?”
This brought us to questions like:
- How much do we want to spend on rent each month?
- What’s our clothing budget every year?
- Do we want to travel? What does that specifically look like?
- What about investing? Saving? Donating to causes?
We went through every question we could think of to created an “enough-based” financial goal. In the end, we landed on $33,000/month* (~$400k/year) as our first enough goal.
*Note: Setting an enough-based financial goal does not have be a forever goal! Your goals can always change if your life changes. Our enough number has grown since setting this initial one due to new goals of wanting to buy a home, raising kids, and putting money aside to take care of our parents.
Further reading: If you want to read the entire story of how we hit our enough goal for WAIM in the first 3 years (with all the ups and downs along the way!) you can read that full story here.
Depending on your financial situation, $400k per year might sound like a lot or it might sound like not enough. For us, it felt like that amount would be a dream come true because that number was directly related to a lifestyle that would be a dream come true!
You’ll never know you’re satisfied unless you define exactly how big the container of your desires is.
By actually asking ourselves these enough-based financial questions and applying REAL numbers to each category, we were able to see that our business doesn’t need to make a million dollars for us to feel wealthy.
Setting our enough number helped us feel more at ease in growing our business. We had a true north to head toward and it was a way of defining a boundary line of satisfaction. There are plenty of more impressive businesses that make way more money than ours, but we look around and we have gratitude every single day for what we have because we know our goals have contributed to us living our dream lives.
If you want to read more about the idea of ENOUGH and get our specific formulas on how to calculate your Monthly Minimum Magic (MMM) number and Enough number you can read this article.
We hope you’ll apply these two simple shifts to your own personal finance approach, and we hope they bring you less stress, and yes, even more (but also ENOUGH) money!