4 Ways to Find Your Financial Footing in 2016
Start the year off right by reassessing whether your monetary goals are focusing on the right things.
January 1, 2016
I realize thinking about your finances isn’t something you look forward to when you wake up in the morning, but it should become a primary focus for you if you really want your business to do well. Now that we’ve started a new year, it’s a good time to get things in order to plan out how 2016 will work for you.
Why is it so important? Because I want you to start coming from a position of strength when it comes to your business decisions. Have you ever found that you’re making decisions based on what you can do rather than what you should or need to do? Of course you have!
When it comes to managing your finances, everyone has to start somewhere. You don’t have to have a ton of experience being great at it in order to learn how to master it from here on. You can and should start now. I like how one of our coaches put it: He compared it to taking your prescribed medications. If you miss a dose of meds, you don’t double up the next day. You just start fresh today. Your finances are no different.
With that being said, let’s talk about four rules that you can follow to help you get to a better financial state.
Your Financial Goals Aren’t Only About Income
If you ask someone what their business goal is for the coming year, they’ll probably say something about their desired income. But they’ll almost never tell you their outcome or expenses goal.
Your expenses are a crucial part of your growth, and as an entrepreneur, they are really a cost of doing business. Because many of us get accustomed to referrals as our main source of income, we become spoiled and never really operate like a true business. That has to change if you want to reap the rewards of a successful and more predictable business.
The truth is that when you don’t know what you are going to spend your money on, you will spend it on anything that looks good. You only get so much check equity, which is created by the money you spend. So spend it wisely.
Give Up What You Want Now for What You Need Later
A sad truth is that in America, most people have been taught to build their lives around the lifestyle they want. That means lifestyle, in most cases, comes before almost anything else. Tell me if you have ever thought this to yourself: “If I just made a little more money, I could…?” This is what we tell ourselves, but in many cases, it’s not that we need more money — it’s actually that we need to spend less on frivolous things that don’t bring us any real value.
I talk to too many agents who tell me they can’t afford coaching now but can’t wait until they are able to afford it. How often do you think these same agents are buying coffee at Dunkin’ Donuts or Starbucks once or twice a day and eating out several times per week? Their lifestyle keeps them from investing in their business like they should, which prevents them from ever having the lifestyle they really want.
It’s not that you can’t ever spend money on creature comforts, but you just can’t do it in place of investing in your business. You have to be willing to give up what you want right now for what you need later on.
Have an Actual Plan
If you need a template for setting up a business plan for 2016, I’ve set up a link where you can download one for free at businessplan.jaredjamestoday.com. Having a plan is key because it gives you clarity. Remember: If you don’t know where you’re going, any road will do.
In an ideal world, here is how you want to break up where the revenue from your business goes:
- A third of your income should be going into your tax account.
- A third should go into a personal account (this is how you pay your bills, save money, pay for vacations, whatever).
- A third should go towards your business expenses.
That last bullet point probably scares you a little bit and might even seem unrealistic, especially if you aren’t used to spending that much money on your business. Even if you can’t reach this standard now, you should be working toward it. I work with some of the top teams and agents in North America, and the one thing they all have in common is that referrals are not their top source of business. They are all investing money to make money — and so should you.
Budgeting Is Not Always a Spending or Saving Issue
Spending too much and not saving enough are the easiest indicators of why someone isn’t doing well, but they aren’t always the issue. Sometimes you have a revenue issue, and you aren’t spending enough.
Ask yourself these questions: Am I investing in a coach? Am I investing in leads? Am I investing in the tools I need to do my job effectively and efficiently? What am I missing beyond the hustle or will to win?
If you want to win, you need to assess where you are and if you have the tools necessary to do the job. Just as you can’t catch 500 pounds of fish in a rowboat, you also can’t expect to be a top producer if you don’t have the infrastructure and team in place to handle the added business.
I encourage you to take a close look at your finances and the way you are set up currently, and decide if you are in a position to get what you want while doing things the way you currently are.