I’m honestly pretty embarrassed to say this - but finances in general has been a topic I’ve avoided like the plague. And not just on the blog, like in my actual life.
I live in one of the most expensive cities in the world. I started off living here with loads of bills, a low paying job, and student loans. Every single time I’d try to budget, I’d end up beating myself up over the numbers I didn’t like to see. Have you ever logged into a finance program to see big, red, flashing numbers showing negative net worth? Well I have. And it SUCKS.
Imagine being reminded day after day that you’re “worth” -$20,000. It made me want to vomit. So what did I do? I ignored it. Obviously. Super mature lol.
The loans are gone now, I’ve since moved companies, earned promotions and raises. My finances have changed a lot…but for some reason I still ignored budgeting for so damn long.
All this to say - I’m not perfect. I’m no financial advisor. I’m someone who is about to go through a major life change (marriage), someone who has a full time job and also owns my own business, and someone who is constantly learning. So what I really wanted to do today is talk through a few steps/tools that I use to manage my personal finances. Because ya’ll - I’m finally “owning” up to it!
How I manage my personal finances.
Budget building.
Sort of like looking to establish better health habits, you can't make any changes unless you know what your status quo is. Budget building is like food journaling, but for finances. Before building out a budget, I went through past bank statements to get an understanding of what categories I was spending money in, from food to personal care to entertainment. Once I had that baseline, I was able to set realistic budgets for myself. For example, I noticed on average I was spending $450 a month on groceries, so I set my budget at $500 to give myself some cushion.
Tracking past spending also allows you to flag any areas you may be overspending in. I noticed (HAAA BIG SURPRISE) I was spending a load of cash every month on "personal care" AKA beauty items. KB and I also noticed we were each spending a lot of money eating out - which is crazy talk considering our monthly grocery bill is $500. We made a personal choice to really be aware of how much we were eating out and get strict with that specific budget.
Tracking spending on the go.
Once we established a budget, we wanted to find an easy way to track spending on the go. KB originally had built out an Excel spreadsheet and was entering in transactions from his band statement...but I got lazy lol.
This is not sponsored in any way shape or form, but the app I've found most useful is Mint. Basically you connect all your bank accounts and investment accounts, and Mint is able to track your spending and categorize purchases for you. I entered in those handy budget numbers I had established into the app and Mint notifies me if I'm under or over my budget per category each month. I try not to be too obsessive - I check Mint every couple of days to get a pulse on where I have room to spend and where I really need to save.
FORGIVENESS + PATIENCE
Here's the jam - we're going to fuck up. We're allll going to fuck up. We're going to overspend some months. We'll have cravings for takeout dumplings and end up spending $70 because sometimes it just feels good to order exactly what you want. It happens. I try to remind myself to be patient with myself - new habits take time to form!
How I manage my business finances.
Separate personal and business accounts.
Honestly I could do an entire separate post on blog finances alone, but I thought we'd talk briefly about the topic here. The long story short is I learned pretty quickly that once my small business started making money, I needed to separate out the accounts. I now have a personal checking (among other accounts) and a business checking. Having all my finances separated out really helps when it comes time to pay my taxes.
Tax season is every season.
SPEAKING OF TAXES lol. Everyone's FAVE subject! But seriously - when you "own" your own business, tax season is every season. Unlike more traditional jobs where your employer takes taxes out of each paycheck (contributing for you), being self employed means that the responsibility of saving for taxes falls on your shoulders only.
Business owners actually have to pay taxes quarterly. I found keeping track of all this (and paying the appropriate quarterly tax amount) really confusing and intimidating. I don't have "a numbers guy." It's just me.
Personally, I use Quickbooks Self Employed to manage my blog finances. Quickbooks connects to my business bank account and is able to calculate out estimated quarterly taxes by tracking my business income and expenses. Having a clear understanding of how much I need to expect to pay each quarter really helps me make sure I actually have that amount of money on hand to make payments.
Automate invoicing where possible.
I love the creative side of blogging, but the admin side can be a total pain. I'll be honest - there have been several times when I've just straight up forgotten a brand owed me money.
Like, really. I just FORGOT.
Billing also gets incredibly confusing because it's not like a "steady" paycheck - some contracts are net 30, net 60, or even net 90 from either the contract signing date or the content live date. It's a mess to remember everything! I've started to automate my invoices using PayPal. As soon as I sign a contract, I head over to PayPal to schedule my invoice for delivery. PayPal allows you to postpone sending your invoice and also allows you to edit the payment due date - it makes invoicing a total breeze.
Spend less.
My biggest lesson from 2018 in taking a look at my Quickbooks report was that I really just need to learn to spend less. I have a big habit of investing back into my business and while that's totally legitimate, eventually I need to learn to make due where I can rather than constantly upgrading to the next laptop, camera, or eyeshadow palette.
...I should take this advice for my personal life more often, too. Wink wink.
What tips do you have for managing your finances? I'd LOVE to hear them in the comments below!