5 Easy Ways to Change Your Money Habits as a Creative Entrepreneur
It’s the 20’s again, but instead of splurging, we’re taking control of our finances and keeping more of the money we make in our pocket.
This article was originally published on Medium.
Photo by Startup Stock Photos
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Ten years ago, I was a 15-year old teenager who couldn’t get my nose out of F. Scott Fitzgerald’s The Great Gatsby.
In fact, I was obsessed.
Reading of all the parties, scandal, and idea of being able to “start over” a fantasy in life when the green light burnt out years ago was so intriguing to me.
What I loved the most about the story though, was that every main character was an entrepreneur of sorts. They owned their own companies, freelanced, side-hustled, had personal brands, the works.
It was the “Golden Era” in America, and even though I wouldn’t have been able to partake in 99% of it due to my racial background, I would imagine myself in the get-up of a woman in the 1920’s, living the life.
Here we are, 100 years later from 1920, and I’m surrounded by a plethora of millennial entrepreneurs — women and men — who have built their businesses up from nothing and are maintaining their own Golden Era for themselves.
It’s even more inspiring that they’ve done so after a financial recession that traumatized a majority of us.
Being an entrepreneur myself — and one that also has a tremendous amount of debt due to student loans and some not so smart financial decisions I made in my youth that has trashed my credit — I’ve made it a personal goal of mine to get my money right in this new decade.
Keeping these tips to myself isn’t something I do (and I share a ton of creative business and marketing tips on Instagram if you want to follow me there), so here are 5 easy ways that I’m changing my money habits as a creative entrepreneur in 2020:
1. Get your money mindset right.
Something I learned to heal from in the last year when it came to my mindset surrounding money, was how attached to the lack of money I had in my life.
I was always talking about how broke I was, or how if I wasn’t always working, we wouldn’t be able to survive, and primarily, I would freak out the last week of the month, every month.
All of this was a reaction to how I treated my relationship with money, and how I wasn’t considering that my mindset with money was supposed to work together with my budget, not against it.
When I finally got a coach to help me work me through my mindset, I started using affirmations to get my mind into the right place to create more money in my life, personally and professionally.
In the past, I was taught that money was the root of all evil, but in reality, money is a tool that can be used for so much good.
The three affirmations I used every day until the day I launched my business were:
I love money and money loves me.
I am worthy of being compensated for my talents.
People love to work with me and will gladly pay me in exchange for my services.
Was it hard to say any of these affirmations to myself prior to me believing in myself or seeing results, HELL YES. However, I became more confident in myself and what I had to offer the more I said these affirmations.
The more confident I was, the more I was able to attract so many incredible humans who wanted to work with me, and the more I was able to leave an impact on each of their lives while increasing my income.
2. Build a budget and stick to it.
Um. sis, you need a budget, like YESTERDAY.
Budgeting has been both my saving grace and downfall in the past. Why? Because when I stuck to it, I was financially independent. and stress-free. When I spent my money all willy nilly, I crumbled.
Prior to marriage and children, I was the queen of sticking to my budget and rarely moved from it. But, when you move from thinking about yourself versus thinking about you and three other mouths you have to feed, you have to start making sure every dollar has a purpose.
Here are a few apps I’ve used and loved to help take control of my budget and have saved me even in the worst of financial situations:
You Need a Budget // I first used YNAB in my junior year of college and it completely changed my life. YNAB takes the money you make, splits it into the categories you dictate, and puts the rest into your budget for the future. Remember when I said every dollar has a purpose? This is that for every single aspect of your life financially, and it’s free for students. If you aren’t a student, no worries because the first 34 days are free, after that it cost $50 a year to use, but by then the money you would have saved and put away by the end of your first month of using the system will thank you.
Simple // This fee-free online bank is basically like YNAB. It moves your money into expense funds so that when your bill is due, you know it’s covered it also. It allows you to send money to other Simple users, open High-Yield Savings accounts 35X the national average, have both personal and shared checking accounts, and will have the ability to open FDIC Certificates of Deposit (or CD) in 2020. You can also select the option to round-up your spare change from expenses and automatically send them to your savings. My husband and I have been using Simple since last year, and it’s allowed us to pay our bills and enjoy our personal expenses, which has brought a lot of ease to our marriage when it came to our finances!
Quickbooks // In my opinion, this is the most important financial tool you’ll use in your business when it comes to your business. Especially if you don’t have an accountant (which you need to hire one as soon as possible to avoid any tax issues this tax season). Quickbooks is a game-changer when keeping track of your income, expenses, quarterly tax payments, and write-offs in the new year. It is powered by Intuit, the company behind Mint and Turbo Tax, and it automatically uploads all of the data into Turbo Tax for you when it’s time to file. Because I’ve used Turbo Tax to file my family’s taxes for the last three years and have had business expenses since I started freelancing in college, I get Quickbooks for free every year. If that’s not you, no worries. You can get Quickbooks for half-off using the link here.
Each of these apps all serve a purpose to help you see the big picture of where your money is going every month. The faster you’re able to prioritize your expenses, the less stress you’ll have when bills are due.
3. Cut what isn’t needed financially, both personally and professionally.
Do you really need Cable and every streaming service on the planet, or can you cut the chord and fill your time in other ways that will help you grow to meet your goals?
Do you have to have the most expensive phone plan, or can you switch to a plan with less data that’ll be more cost-effective for you?
Monthly subscriptions and other bills that we don’t use are the biggest waste of money we spend regularly, and a majority of the time we don’t even use the services we pay for.
This year, it’s time to reevaluate how much time and money you put into the subscription services you pay for.
In the words of Marie Kondo, If it doesn’t “Spark Joy”, thank the service for what it brought you, and get rid of it.
Our money, much like our time, is a tool to help bring stability and happiness to our lives. If you’re spending multiple hours binge-watching Netflix while your other streaming platforms hardly ever get used: it may be time to cut them out, and decrease your watch time in exchange for research, journaling, and personal development.
Additionally, you may not even need those streaming services at all.
There are a ton of public libraries across the United States that provide free books, audiobooks, movies, tv shows, and various forms of entertainment for free and online.
For me in Houston, both the Houston Public Library and the Harris Country Public Library offer all of these services and more on apps directly to my iPhone and iPad. All I need is a WiFi or hotspot connection to download and have access to what I want to stream.
This is also the perfect time to look at that brand new budget you just built and reevaluate what’s a necessity and what’s a luxury.
For my family, we switched our streaming services to the basic plans (we’ve never had cable), cut down on all of our spending, and are switching to Mint Mobile at the end of this month, which will save us $2500 on our phone expenses alone (I’ll write a review on the company later on once we get some experience with the service).
4. Don’t just save your money, invest it.
Growing up, investing seemed like that scary thing only rich people got to do. Today, anyone with a mobile phone and a few dollars in their bank account can invest.
Investing in your future is more important now than ever, especially with most savings accounts only giving an interest rate of .02%, which is basically nothing. You don’t want your money to just sit in an account, you want it to work for you at all times.
Putting your savings into a High-Interest Yield Savings Account (which Simple does offer) is one way to have your money work for you passively, but another way is investing in the stock market, opening a 401K account through work or a Roth IRA through companies like Ellevest.
Some apps will even pay you in exchange for signing up and investing in their service, and partner with companies you already purchase from to put your money back into your investment account.
I’ve been using these accounts below since I was in college to invest my money and have it work for me, and have had awesome experiences which each of them:
Acorns: Acorns rounds up your change from an expense to up to the nearest dollar and invest it into a diversified portfolio for you automatically. You can also open a retirement account with them, earn “Found Money” from companies you spend money with that they’ll invest into your account, open a debit account with them that will track your expenses and invest into your account for every transaction, and they give you $5 when you open an account. I’ve been using Acorns since my sophomore year of college, and seeing the company grow the way it has since I started using it has been very cool to see!
Stash: Similar to Acorns with the retirement and debit account opportunities, however, Stash offers users the ability to invest in the companies of their choice based of off individual stocks, or through An ETF (Exchange-Traded Fund), which is a basket of investments, like stocks and bonds, bundled together into a single fund. Stash categorizes all of the funds based on interests, beliefs, and financial goals. They also offer $5 when you open an account, and the ability to create accounts for your kids as well!
Ellevest: This is one of my favorite investment companies in the industry right now. Ellevest is made for women, by women, and builds an investment portfolio for you based on all of your goals, background, and circumstances. Their commitment to creating more financial opportunities for women is outstanding, and they work really hard to represent and create financial freedom for all women. Are you a single, recent college graduate trying to beef your Roth IRA up? Ellevest can help you do that. Are you a Married, mother of two wanting to save up for your home and fund your business? Ellevest can do that too. And if you sign up for Ellevest here, they’ll give you $20 for starting an account. How cool is that?
Fundrise: Want to invest in real estate without having to fork out thousands of dollars at a time? Fundrise offers various plans for first-time investors in real estate with a 90-day money-back guarantee (which requires a $500 investment), to investors looking to create supplemental income, have a balanced portfolio, or create a long-term investment with a bigger return in the end. The company does a great job of communicating when a new property has been acquired and completed, and dividends are distributed quarterly. I haven’t touched the account since I’ve opened it after I graduated, and I reinvest all of my dividends back into the account automatically every quarter to keep cash flowing into the account.
5. When setting your rates, keep your expenses and taxes in mind.
For a lot of us, we don’t want to just survive as a creative entrepreneur, we want to thrive financially as soon as possible.
This can be difficult if you aren’t confident in your rates just yet, or don’t feel like you have the results or training to justify how much you want to charge for your time.
A way to cover your bills personally and professionally every month is to make sure your rates take your bills into account, and that you know how many clients or sales you have to have per month to make your bills.
When I first started, I knew I had to have at least 8 consultations a month to cover my business expenses, taxes, and contribute to family bills as well on top of working the coffeeshop to cover my family expenses.
Marketing to call in the dream clients to make that happen got a lot easier when I knew where it had to come from and where my dream client was most likely to be. I’ll talk about that process later on this month.
Now, even with all of these tips, the key to them working is ACTUALLY APPLYING THEM and staying disciplined.
Even with the increase in income, there was and is a ton of debt my husband and I are working to pay off due to student loans from university and personal financial mistakes we made in the past that yes, we’ve learned from, but have to pay back. It is not easy, and especially as an entrepreneur some months are better than others.
However, I’m super proud of all the progress we’ve made and am excited to apply all of this and more into my family’s journey to financial freedom.
2020 is about to be full of huge financial wins, and I’m looking forward to seeing all of us win together in our own “Golden Era” of entrepreneurship.
If you’re looking to shift your money mindset while applying these tips to your life, I highly recommend checking out the Master Your Money Course by Tori Dunlap and Alexis Rockley. It’s an 8-week all-you-can-eat online course to finally get your financial shit together — plus the psychology tools you need to get your self-sabotaging brain on board. Pay off debt, stop emotional spending, build your savings, and start investing — all in the first two months of 2020.
Want more financial tips and tricks? Episode 12 of The Creative’s Corner Podcast with Tori Dunlap from Her First 100K is full of so much information that’ll help you shift from struggling artist to thriving creative entrepreneur.
You can listen to the episode below, or on your favorite streaming platform here or check it out below.
