3 Non-Serving Money Habits Entrepreneurs Need to Break
Habits are behaviors we repeat, and over time they have a tremendous impact. Our money habits are important for both our personal and business lives but as entrepreneurs our money habits often keep us from achieving our financial goals.
When we earn a salary, we can get away with some less-than-ideal money habits, but as entrepreneurs they really come back to smack us in the face.
We are in charge of bringing money in as revenue and then spending that money - which includes paying our bills, growing the business, and also paying ourselves. Our livelihood depends on our money habits.
In order to break these non-serving money habits that keep us from reaching our business goals, we first need to recognize them. Only then can we do something about them.
Here are the three most common non-serving money habits I see in entrepreneurs as well as how to break the habit for good.
Non-serving Habit #1: Avoiding money as much as possible
Most of us start our businesses because we are passionate about a mission or enjoy spending our time a certain way. That might mean teaching, creating, or designing. What we might not realize is that by running our own company, we need to wear many hats, including CFO.
It can feel easier to completely avoid looking at our money than to actually face it. Ignorance is bliss, right? But with every single person I’ve worked with, it was actually a big relief to know what was going on with their money. Until we know what’s going on, we can’t do anything about it. And there’s no power in that.
Breaking Habit #1: Realizing it’s a gift to ourselves
So what do we do? One of the main reasons we don’t take a hard look at our finances is because we believe it will be really restricting. We might realize that we’re spending way too much on our virtual assistant or that we really aren’t ready to get the office space we’ve been eyeing.
In my most successful clients, I see a really important shift. They realize that spending time looking at the numbers is actually a gift to themselves. It’s a radical act of self love. When it doesn’t make financial sense to get an office, it’s really helpful to know that. Yes, we want to have our own space but a lease isn’t worth it if it’ll cause financial stress.
Non-serving Habit #2: Self sabotage
If habit #1 doesn’t feel familiar because you feel like you’re trying really hard to be financially savvy but you’re just not making any progress, you might be self sabotaging. Those who have experienced it (including myself) have called it a toil to nowhere. Sounds fun, right?
Why would we torture ourselves like this? Simple. We’re punishing ourselves for our past financial mistakes. Maybe we opened up a business credit card and built up some debt or hired a graphic designer that turned out to be a flop. Whatever it was, we are making sure to keep ourselves “on the hook” for that mistake.
This keeps us stuck because that’s part of the punishment. If we were able to move forward and reach our business goals, it would be a reward - not a punishment. Those of us who self sabotage are often set on making ourselves pay.
Breaking Habit #2: Self-compassion
How do we get out of this one? It all comes down to forgiveness. Anyone in our same position, with our same experience and context, would have made the exact same decisions we did. We have so much working against us when it comes to our finances and even more so when it comes to being the CFO of our businesses.
Money isn’t something we learn about growing up and we can’t really talk about it - even with our closest friends and family - because it’s taboo. It’s so emotionally charged and we aren’t always rational when it comes to making financial decisions.
For women - and even more so for women of color - there are more struggles to confront. We have the pay gap, the pink tax, the investment gap, the debt gap, etc. It’s enough to make you scream!
All this to say, it’s no wonder we’re not flourishing in our personal financial lives or as the CFOs of our business. This helps us dig up some compassion for ourselves and truly forgive ourselves for the mistakes we made so we can move onward and upward with our businesses.
Non-serving Habit #3: Giving up when we’re not perfect
One of the sneakiest ways we cheat ourselves is by giving up as soon as we’re not perfect. Remember all those things we have working against us? It takes time to learn a new skill. It’s going to take time to build new habits and make progress. That’s why I call it a money journey.
If we give up as soon as we make an impulse purchase or get stuck putting together our business model, our progress has stalled. We’re done for.
Breaking Habit #3: Learning from mistakes and setbacks
Instead of (or after) giving up when we encounter a financial setback or make a mistake, we want to take the judgment out of it and play detective. It’s easier said than done, but a mistake is a perfect opportunity to change something that’s not working.
You’re back to nothing in your business bank account. Allow yourself the time to be upset but then take a deep breath and ask “what happened?” What went wrong? What I can do differently next time around so this doesn’t happen again?
You might find that in low revenue months, your revenue isn’t enough to cover your expenses. If that’s the case, it might be time to let go of some expenses, and really prioritize building up a buffer so you have funds to pull from during those times.
