Every year I track my income and expenses on what is called a spending plan. I learned this from a money coach – Mikelann Valterra who I worked with for a few years. The system is quite unique in that it isn’t about creating a budget but it is about creating a plan of what you want in your life and in your business and learning to put it all together to make ends meet and also get ahead of the game. For most of my career, I spent it just wishing that it were so and thinking that the whole law of attraction would see me through but frankly I dumped magical thinking for creating a plan and taking control of my finances and my life.
Here is how it works basically:
Each year I start out creating an annual spending plan. I can plan for my monthly expenses and also plan to go to conferences or go on vacation and guesstimate how much it will take to do that. Each month I start out with planning my month and making my best guess at what expenses I will have and what my goal for income is. I can see a special tab in the worksheet that tally’s everything up and lets me know if that will work or not and then I can adjust accordingly. Each week I track my income and expenses. I have an Excel spread sheet that I work with ( a special one from the Financial Recovery Institute). When I started tracking all my income and expenses both personal and business, I could finally really see what was going on in my money world. The biggest thing I learned was that money is just basically a math problem!
So each month I start out with my plan. Each week I tally my income and expenses and it then tells me if I am on target or not. I can adjust as I go. I either need to work more or find a way to make more money or I can cut back on something. I already live pretty simply so it is more often just creating a way to make more!
Spending plans are a lot different than budgets. I don’t like the word budget or I guess I don’t like having to budget! A budget to me means that I have to stop having a latte or eating out for lunch everyday like I do when I am at the office. A spending plan frees up your energy to become more creative and find new ways to make more money or get more massage clients! A spending plan provides relief as you often may feel overwhelmed by bills or expenses but you can watch it all carefully on your spending plan.
The creator of the spending plan program I use has just written a book on the subject. It is called Financial Recovery: Developing a Healthy Relationship with Money
The whole process is also about taking a good look at how you deal with money and your beliefs about money. For many massage therapists, the general saying seems to be – “It isn’t about the money”. Sorry, but it is. You are a business now and you need to have enough money to stay in business so that you can help your clients. It is as simple as that. Mikelann Valtera refers to this as “Noble Poverty” (in her boook –Why Women Earn Less: How to Make What You’re Really Worth) the idea that you have to give yourself away for little to nothing because of the unconscious beliefs that if you do, you will be loved or whatever it is that might be your take on it all. Tracking your income and expenses will let you start seeing that making money is just a math problem. It doesn’t have anything to do with all of the fears that often are behind issues with money and how you value your time and money.