I love saying this word out loud to the groups that we speak to. I can immediately feel the crowd shift uncomfortably and I can almost hear the voices in their heads start to pipe up.
“I should maybe do that someday.”
“I don’t really make enough money to budget.”
“Oh yeah, I have MINT for that. Check.”
“I make a pretty good income, I’m fine.”
“Maybe on January first…”
I know that voice all too well because I heard it all the time. But even though I was the “we-need-a-budget” instigator in our marriage, I was the worst at sticking with it. I’m just one of those people that really enjoys starting projects, not finishing them. It just seemed like every time I’d jump on the budget bandwagon, a week or two later, I’d fall off and get trampled over. At the time, I just couldn’t figure it out why. It’s not like budgeting is a hard concept. But after going through countless tries and helping other people build out their own budgets, we’ve figured out something important.
A budget includes all the categories you spend money on, but an EFFECTIVE budget has them in the RIGHT ORDER. Why? Because visuals are SO important. For us creative people, the idea of going into a black and white excel spreadsheet every day is about as appealing as going to the dentist.
It was out of this realization that our “Best Budget Blueprint” was born. Our hope is that you take advantage of our years of budgeting experience and use this to create a budget that you’ll actually stick to. We did. It works.
Are you surprised…or rather, ambushed…every year by the holidays, vacations, and buying gifts? Lots of folks take a trip, finish their holiday shopping, or get past the New Year and finally look at their account balances and EXCLAIM their costs were “a lot bigger than we thought they were going to be!”….yet again.
DON’T LET HOLIDAYS & GIFTS SINK YOU
That happened to us for many years too. Don’t worry, you’re not alone. At first, we made outlandish resolutions like:
“We’re just not gonna give gifts this year…”
“We’re gonna hand make EVERYTHING!”
“No trips for two whole years!!!”
Sound familiar? Yeah….that never really pans out very well. Now, we have specific steps we use and recommend to others to avoid that looney spending cycle.
1. Get HONEST about your spending habits
The key to this one is…drum roll… “honesty”. If you typically take 2 to 3 trips per year, start being honest with yourself about that. If you typically spend 5,6,7, or $800 per year on Christmas, be honest about that. You don’t need to judge yourself, just be honest about the facts.
2. PLAN your spending for 2016
IF you’re honest about your spending, then you know what to expect this year. AND, if you know what to expect, you can make a plan. Let’s be honest, this year will probably be, on a grand scale, somewhat predicable. Christmas won’t disappear, Christmas won’t happen in July, you probably won’t hunker down in a bunker in the woods all year, and you will have expenses.
So, if that’s the case, it’s actually pretty easy to start saving for those expenses now in little amounts each month.
For example, we save a few hundred dollars every month for vacations, whether or not we have a vacation in mind. So, IF we decide to suddenly take that exciting random trip to Marfa…or Belize…there’s a few thousand dollars in there waiting for us. We don’t have to steal from our emergency fund, our giving bucket, or something else that’s way more important like car repairs or health costs.
Which, brings us to budgeting for your expected costs…
3. MAKE a budget
If you have a budget, awesome! We STRONGLY recommend this for everyone. Saving for your long-term expenses is SO MUCH EASIER with a budget.
It’s all part of making a plan. For example, Christmas…surprise, surprise…happens on the exact same day, every single year.However, for some ELUSIVE reason, Christmas expenses seem to throw us for a loop every single year, too.
With a budget, you can be prepared. It’s that simple. If you’re 11 months out from Christmas, like we are right now, you can start saving around 50 bucks per month, and you’ll have around 600 bucks by the time Christmas rolls around.
Life is WAY less stressful if you have a budget, because you can just let it accumulate in a line item category. We personally LOVE the online budgeting app “You Need A Budget” or YNAB, which lets you do just that. But, if you’re old school or…God forbid…if you’re not budgeting at all, you can just have a side bank account that’s designated for specific purposes. You could set up automatic transfers from your main account to designated accounts for a vacation fund, a Christmas fund, and other long term expenses. We always recommend using some sort of budgeting system, but this can at least help you accomplish the same thing
4. WATCH this video…
If you’re “just not getting it” after reading that, watch this helpful video we put together. It illuminates our savings and budgeting principles even further. Check it out by clicking here!
If you didn’t meet your financial goals last year, guess what? You’re not alone. This time of year, LOTS of people go through the same gut-wrenching process of reviewing their goals and realizing they came up a little bit short. Just breathe, and get ready to make a better plan.
WHY wasn’t that goal achieved?
Figuring out why you didn’t achieve something starts with defining the goal itself. Maybe your goal was too heavily dependent on things OUTSIDE of your control.
Take these goals, for example:
What about the things you COULD have done, but didn’t?
You can probably rattle off a laundry list of reasons why certain goals weren’t met, but they usually boil down to these three areas:
It is important to be able to take personal responsibility for our own shortcomings, but just feeling guilty is a waste. No good fruit comes of it. Your energy and time are better spent focusing on committing to new actions.
SO, how do I make 2016 different?
Take the information OUT of your brain, and put it in the real world. Take ten to twenty minutes to make a picture of what your current finances actually look like. Cash on one side, and Debts on the other. NOTHING fancy. You can’t figure out where to go, if you have no idea where you are now. That’s why maps exist.
DON’T make this a one time thing. DO THIS WEEKLY. Maybe monthly. This will keep you focused and consistently affirming that “YES, this is something I still want”.
The most beneficial tactic we know of is to speak the goals OUT LOUD to somebody else. Ideally, more than one somebody else. You NEED an accountability partner. Period. Full stop. Not only will talking about the goal make it more “real”, but hopefully people will help you see if your goals are realistic. Utilize the strengths of those who are close to you. Humans are NOT designed to act alone.
If you have a spouse or a significant other, that can be a good place to start. But, don’t just stop with them, the MORE people you tell, the more likely you will make it happen.
Here are a few ideas:
3. Define what you will GIVE UP in exchange for that goal.
Free time and resources don’t just show up. Time and money are limited for everyone. You CANNOT do all the things all the time. There’s 24 hours in each day. But, with planning, you CAN get the things you really want.
So, what is going to give? Your daily lattes? Your Netflix binges? Those new jeans? That music festival ticket? Nights out with friends?
What is your goal worth MORE than?
Answering that is absolutely key to your success. That way, when achieving that goal is on the line YOU have already decided how to make room for it. BOOM.
We are so thrilled for the 2016 ahead of us here at The Art of Finance. Make sure you like our page on Facebook if you haven’t yet! You can find us here. We’re constantly striving to make our free content more relevant and more helpful.
Drop us a line any time! We always love to hear from you. : )
The Art of Finance
Philip and Julia Olson
Remember how in my last post I was telling you that Creatives could be winning with money? I told you I’d send you some practical next steps to help you start to gain some traction. And here they are. Let’s jump right in!
I hear creatives tell me that they just can’t get in front of the right decision makers. That the small annoying details of growing a business or brand are wearing you down. And maybe you feel the overwhelming urge to jump off a bridge when you think about filing your quarterly taxes. Hey, we’ve all been there. But believe me, there’s hope.
FEELING STUCK? TRY THESE THREE SIMPLE CHANGES
Here’s three simple and powerful tools to begin unlocking the potential inside your creative brain. Just one has the potential to take your game to the next level. And like anything, you actually have to start. So here we go:
Change Your Language
So, you know how you tell everybody ‘I’m terrible at details’ or ‘Math’s not my strong suit’? Guess what — you’re making it more true every time you state it out loud. You start to believe it. So try is; for the next two weeks, try stating the OPPOSITE for one or two of these perceived weaknesses. Write down in your journal or blog “I AM on top of my finances”. When talking on the phone, state “I CAN navigate the business-side of my creative endeavors well.” By making this simple conscious choice, your sub-conscious mind will start to become more comfortable with this new reality. You’ll start to believe them. And by believing them, you’ll adapt your behavior to make them true. If you’re stumped on coming up with good affirmations to speak into your sub-conscious, check out this list of ’80 Affirmations for Entrepreneurs’.
There are certain areas of your business and financial life that are just inefficient to do yourself. Sure you COULD do them if had to, but you either don’t enjoy them or don’t do them as well as you do other things. This is where you surround yourself with an incredible team. Find a local IT Support guy if technology issues are making you pull your hair out (I keep Philtron Computing on speed-dial). Form a relationship with a great accountant if taxes and bookkeeping don’t come naturally to you (Kyle at Manninen PCalways calls me back the same day). The most brilliant creatives in history surrounded themselves with professionals in other areas so they could focus on the things they loved. And it’s a win-win. By winning in the marketplace, you gain the freedom to form your own destiny. Nobody wins in the marketplace alone.
This one is the most important. Because without it, the first two usually crumble into sawdust. Most creatives are highly independent and often outsiders. Personally, I’m pretty introverted and really need my alone time. But hear me, creatives — you NEED people around you to keep you on track for your goals. Set a weekly date with one or more person. See them in every week, rain or shine. Share with them your goals, fears, and dreams. And ask them to not let you off the hook. By surrounding ourselves with other people watching our “performance”, it compels us to follow through and helps us realize our full potential.
Challenge yourself this week. Try to embrace even one of these life-changing tools. Put it into your daily routine for 2 weeks and see if you notice any difference. Then let me know about your experience! Did it work, did it not? Be honest!
I was recently talking to a very talented artist at a wedding reception. She builds dream-like tables and chairs that are straight from a Dali painting. They require incredible detail, skill, and precision. She uses lasers. And she said something that made me sad;
“Oh, I hate the business side of what I do.”
Yeah, you know what I’m talking about. It’s that background music that floats through every artistic community. It says “I’m bad at math”, and “that legal and tax stuff is so boring”, and worst of all “I just wish I didn’t have to focus on the business part of my art and could just… create it!”
And they are all toxic half-truths. But there is some really good news, guys!
Rise of the Creative Class
More and more creatives and artists are winning in their businesses every day. In fact, there’s a well-documented “Rise of the Creative Class” that is happening in our generation like never before in history. We all know the amount of information and choices we experience every day is growing to an unbearable level. And it’s people like us that can absolutely thrive and dominate in the new economy. I really like the way Fast Company breaks it down in their article “Why Creatives Will Rule The World.” These are some of my favorite insights:
COMPLEXITY: We live in the most complicated age in human history. And this gives right-brainers an amazing opportunity to thrive. Why? Well, creatives are big-picture thinkers who can simultaneously focus on the tiniest details. We don’t get bogged down or stuck with a complex problem. Instead we thrive in a high level of ambiguity, and are willing to take more risks than left-brainers. Complexity can slow down or even cripples analytical minds. Creatives are designed to excel it in.
STORYTELLING: Creatives get the power of storytelling. It’s fuel for our souls. And in the new economy, human empathy and strong collaboration is the key to winning on a big scale. Facts, charts, and raw data is becoming less important in our information saturation of 2015. Finding and telling stories is the most powerful way to unite groups of people, and accomplish big tasks. And nobody excels at story-telling more than creatives like us.
QUICK ADAPTION: We right-brainers were never really the “In-Type”, so we’re not super attached to tradition. That’s awesome because the world is changing faster than we can even understand. Our ability to adapt and find creative strategies is like the bob-and-weave of a prize fighter. You can’t knock us down if you can’t land a solid punch.
Okay, so maybe you “know all that”, but you’re still hung up on the things that you know are holding you back. Those things that seem to keep you from thriving in the work force. I hear creatives tell me that they just can’t get in front of the right decision makers. That the small annoying details of growing a business or brand are wearing them down. And many feel the overwhelming urge to jump off a bridge when they think about filing your quarterly taxes. Hey, we’ve all been there. And believe me, there’s hope.
NEXT: Practical Steps
In Part Two of this series, I’ll be sharing with you some of my most tried-and-true methods for getting over those internal walls that we all face. Be sure to read it, too. But in the mean time, settle in to the fact that you actually have some great things going for you as a creative in business.
(Seriously, check out that article to see all the hidden super-powers creatives have and don’t even realize when it comes to business and finance.)