Using your heart AND your head
I remember my first driving lesson. My driving instructor took me to a quiet car park and showed me the basic maneuvers. Everything was so new and I paid so much attention to the instructor and driving, that I was exhausted after each lesson. Eventually, over time, I grasped the skills so that now the actions happen automatically.
I never had that experience with money. I went from being depended on my parents to earning and supporting myself and living from payday to payday. I never had to concentrate on money, I never had those first lessons. I went straight into being automatic with my money.
To form a better relationship with money, I needed to be conscious of how I treated money. Like any relationship, healthy interaction comes form both sides.
What Is Conscious Money?
Conscious Money embodies a simple, but powerful idea, that we build a loving relationship with money, which we then nurture and grow. We think about how we spend our money, how we talk about money and most of all how we keep our money. This relationship is served best when our money choices tie in with our values.
I have spoken about ‘Soulful Values’ many times, and it is so important to know when setting up your business goals that they align with your values. Money becomes “conscious” when we infuse these values in all our interactions with money. Through this awareness we can ensure all our actions have positive intentions.
In business the ‘sweet spot’ is when we merge our conscious and value money beliefs with practical and proven financial principles.
Think about it, by mixing our values with business methodology, you are getting the best of both worlds. The heart – representing your values and your head – keeping you on track with financial methods
Head AND Heart
When your heart and your head are in sync, you feel centred. You are less likely to be fearful of making decisions, you will make sure you have enough information, that you have the right processes in place so you can make good decisions. Values engage the heart in the same way that healthy financial practices honour the head. Without the heart, motivation can waver, without the head you can get off track. It makes sense, head AND heart approach is the key to resolving numerous money challenges you face in your business and personal finances.
Step one – Track the cash!
Now that you know what your values are and what goals you have, (if you need a recap on ‘Soulful Goals’ read it here) you need to track your spending.
There is no judgement here, for the first few weeks, you want to just keep track of what you are spending. There is no right way to do this. You can do it in a notebook, on an app, in your accounting software if you have it. The idea is to make sure you know where every euro and cent of your money goes.
You do not have to share this with anyone unless you want to. It will include personal and business expenses. It might be a good idea to keep them sperate, in two different columns, so it makes it easier to read for step two.
Step two – Look at the cash!
After a week or two of tracking, sit down with a 3 highlighters. (The colours are your choice!)
Green = Must spend
Yellow = Nice to spend
Pink = Do I really need this?
Take your colours and go through each day, highlighted each spend with the relevant highlighter.
When you have finished, which colour is the the one you see the most?
Make a note of what you see
Then add up each colour for each day.
What do you see, are you spending most of your money on Must/Nice/Really?
Again, please do not make judgements or chastise yourself, you are just observing your spending.
Once you have completed your week, its time to move on to step 3.
Step three – Compare!
Here is the bit that you look at your spending and You decide wither or not you are happy with what you are at. Of the pink items, which ones do you want to stop spending on right away. Make a note of this for next week. If you spend €50 on coffee’s and snacks out, is this ok with you?
How much are the green amounts as a percentage of your income? A good rule of thumb is 30% expenses, 30% savings, 30% taxes and 10% profit, however, you need to make sure that your percentages make sense for you and your business.
Now, for the coming week, be aware of your spending. You have highlighted your own pattern that is unique to you. Use it in the coming week as you continue to track your cash, what changes can you make? Spending your money consciously helps you understand your spending so you can make the changes you need to.
Living a Conscious Money life invites you to look at your recurring thoughts and patterns around money – the heart Most accountants stay away from this side of the process. We are not taught to look at your money mind in business school. Living the business life invites you to have a process. Keep your accounts in order and look at your income vs your expenses – the head.
Rose, never had any money to spend on herself. Her business seemed to take every last bit of her cash. She never could justify this spending to her husband. Although he never said anything, Rose always felt he thought it as her hobby and not a real business. After our first consultation, it was clear that Rose did not keep her personal (house) expenses separate form her business expenses. This meant that she was not able to see how much profit she made easily. She would work it all out for her tax return, however, by the time she did this it seemed so removed from her day to day actions that it was hard for her to change her habits. She used to say that she will set up a good practice in the new year, but year after year it got away from her. The information she was getting was not in time for her to make decision. Rose was living by the heart only and did not use the head.
Tara wanted to grow her business. She wanted to make lots and lots of money. She brought in all the processes and systems she knew would help her business grow. She worked long and hard and got results. When she came to work with me, she was exhausted. Sarah was running her business by her head only. By taking her mind of the revenue line and focusing on the profit line, Tara was able to stream back some of her courses and enjoy her life while still making a great living.
Running your own businesses is hard, let me help you set up your head and heart business. Contact me here.
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