What happens in your personal budget inevitably impacts your business budget (and vice versa). Business or Pressure host Allissa Haines walks through the basics of creating a personal budget, which ultimately could help your business budget.
Resources:
Erin Copelan, Owner of Erin Copelan Massage: https://erincopelan.com/resources/
Author links:
Website: www.deepbreathdigital.com
0:00:00.2 Alyssa Haynes: Welcome to business or Pressure Taking the Pain out of Massage Business with me, Alyssa Haynes. This is your no nonsense guide to managing your business money. It's our mission to make sure that every massage therapist has the tools to make a living wage in a thriving business. Let's jump in. We are talking about personal finance and why are we discussing personal finance on a business podcast? Well, we've mentioned personal finance in several previous episodes so far this year because we are just managing our money this year. And even when you are diligent about separating your business money and your personal money, it is still all connected because your business pays you and you pay your personal expenses. And an issue in one area can cause an issue in another. And we've talked about these kinds of red flags, like raiding your business funds irregularly to pay personal bills or not paying yourself enough. And in a sole proprietorship it's all business and it's all personal. And really my mission is to take the pain and stress out of business and personal finances. And finally, because money, the excess of it, the lack of it, how we handle it, has a huge impact on our mental health and happiness in general.
0:01:32.1 AH: And we are happier when we are in control of our money in a manner that is kind to ourselves and flexible. But let's jump back a little bit. Historically, yuck. Personal finance guidance, some of it is still and much of it used to be so mean, like really aggressive and angry and blamey. In my head I call it the Boomer forward approach. Full of blame, wrapped in shame, side dish of ignorance about the current state of affairs. And you know what I'm talking about, this concept that one single full time job could support a family or that four years of a college education would would allow you to get a job that would support a home and a car and recreational activities. That math that may have been true decades ago is no longer true. And so much of the personal finance guidance doesn't match up. And this financial guidance is always served with the notion that if you cannot do these things with your income, you're a failure. And it is a moral and personal failing that you can't afford everything you're supposed to have on one single income nowadays. Much of the old school, or what I call boomer forward financial guidance is simply not relevant now.
0:02:58.1 AH: But there has been an evolution in personal finance and there has been a revelation about the actual cost of things like housing and education and the very real impacts of institutionalized racism and sexism and ableism and all the isms. We have an increased awareness now of the cost of being an uncompensated caregiver, and personal finance guidance has evolved. It's so much more nuanced and so much more kind now. So let's approach this discussion of personal finance with that attitude. Let's approach with kindness and empathy towards our past selves and the money mistakes that we made, and with gratitude that we have the desire and the ability to learn better habits and more skills. And let's be mindful of the reality that none of this comes easily or quickly. It is a skill that can be practiced. So let's look at the red flags that your personal budget could use a tune up or that you need to start a budget from scratch. And some of these red flags are going to sound familiar because there's a lot of similarity to our business budget and our business red flags. So first, every big or regular expense feels like a surprise.
0:04:20.0 AH: Taxes catch you off guard every year. An annual bill causes stress like an automobile excise tax or your car registration that happens every two years. And likewise, every big deposit feels like a windfall, feels like a treat. When your little brother finally pays you back that $300 he owes you, it's a big event because you haven't seen that much money in one spot in a long time. A red flag could be carrying a balance on a credit card and still continuing to use that credit card for new expenses. Perhaps you raid business accounts for money outside of your regular draw, or you're straight up using your business accounts to pay for personal expenses. And I'm going to throw the biggest red flag kind of in the middle here. This is the one I most see in my budget coaching, which is that you might avoid checking your balances or your budget and keep spending anyways. Another red flag is that you can't accurately state what you pay yourself, how much money you receive from your business every week or month, and you can't articulate, at least loosely, your monthly expenses. And finally, if you don't have a money plan, that's a pretty big red flag.
0:05:39.4 AH: If you don't have any savings goals or retirement goals or you don't have a plan to go on vacation, like you might have a vacation scheduled, but you have not actually articulated a plan for saving and paying for it or paying yourself while you were on that vacation, those are also red flags. So if any of this sounds familiar, you might want to create or tweak your personal budget. So how do we do that? How do we put it together? Well, it sounds a lot like a few episodes ago where we talked about putting together a business budget. But let's hit this from a personal angle. You start with the last 12 months of transaction history in your primary spending accounts. So your checking account, your credit card, if you're using that, any other bank accounts, maybe even your Venmo or your Zelle or however you're sending money back and forth to other people in your personal life, ideally 12 months of transaction history. And do not let that overwhelm you because we're just gonna skim through it. This is not a detailed accounting. This is a scan through it to find less regular expenses that we often forget about.
0:06:57.3 AH: Scroll through those transactions and make a list of your expenses. And we're going to divide them up as regular monthly and weekly expenses and then less regular. And I'll give some examples of each year. So your regular monthly or weekly expenses are things like your rent or mortgage, your utilities on that living space, groceries and household supplies, your auto loan or your public transportation expenses, any insurances like your auto insurance, your home insurance or renters insurance, whatever you got, fuel for your car if you got one. Other weekly or monthly expenses are often like medical insurance or co pays or medications. Saving for your quarterly estimated taxes should probably be a weekly or monthly expense if you are not already doing that through your business accounts. So you got to make sure you're saving for quarterly taxes in one place or the other. I wanted to throw that little footnote in there. Any subscriptions, streaming services, magazines, any kind of subscription, anything that you pay regularly to utilize. Any other debt, maybe you've got an old personal loan or credit card debt that you've got to pay down monthly. And kids stuff, like lessons or clubs or anything they do that has a regular weekly or monthly kind of payment.
0:08:23.1 AH: Now these regular expenses, once you get rolling, once you try to use a budget for a month or so, these become quite apparent. What really trips us up are the less regular expenses, predictable or otherwise. Things that do not happen on a weekly or monthly basis that are very easy to forget when we sit down and start to make a budget. So things like your auto registration. So here in Massachusetts, I completely forgot that I was going to get a bill for my auto registration through the entire first year plus of my budget. And I was feeling all really good about my budget, and then I got this bill that I was not expecting. There are these weird things that you can only catch by going back pretty far in your transaction history. But don't let that stress you out. Just know that these things are going to pop up and ideally by the time they do, you're going to have a good budget in place that has the flexibility to cover these things. So gifts and holidays. Now holidays are predictable. We know when they're going to happen every year. But budgets for them can be less predictable, especially if you haven't planned and you don't ever really know exactly how much you're going to spend on a gift for somebody.
0:09:38.5 AH: But it is a less regular expense that tends to trip us up. Holidays, birthdays, those kind of things, and other kinds of kids activities, summer camp, occasional school field trips, things that are less regular, less predictable and trip you up if you don't have a fund for them. So the goal here is to scan through 12 months or so of transactions in all your spending accounts and make notes, make a list of the regular and irregular expenses and how much you're typically spending on them in any given time period. It's easy to name the number for your monthly rent. It's less easy to total a number for all your random pet expenses in the last year. We just want some loose numbers to work with here. And something you want to add to this list of expenses are savings or larger goals. Retirement savings. If you don't have a retirement account within your business, or in addition to that, because you can have business and personal retirement savings, your short term emergency savings account for your personal life and how much you have in there depends on your household situation. We'll have another episode about that soon.
0:10:50.0 AH: But ideally you want some kind of short term savings account so that if all the income shuts off in your home for a month or two or three, you can still cover your necessary bills. Maybe you want a savings goal for vacation or maybe you want a savings goal for a new vehicle. So now you've got this list with some loose amounts. What are we going to do with it? Well, I use a software called YNAB. You need a budget, and that's no secret. I'm a YNAB coach. But if software isn't your jam, this written list will totally do. And you can also check your bank because they might have a program to do this. Some banks have budget programs built into their online software now to help you allot money to one category or another and reference that as you need. So you got this list of expenses, everything that you know, you realize you've paid for in the last 12 months. So you've got a section of like weekly or monthly expenses and organize that by its due date every month so Your rent, let's say, is due on the first of the month.
0:11:50.6 AH: Well, when is your auto insurance due? And make that list based on when things are due in each time period. And then you're going to have that second part of the list that's less regular expenses that are every few months or once a year, what have you. But you want this list to say what you have to spend the money on, how much money and when is it due, every month or any particular time period. This can be an actual paper list, it can be a spreadsheet, it could be software, and there's plenty of varieties of that. Now, the weekly and monthly stuff is pretty easy, but with the larger bills that happen every year, we got to do a little bit of division. So it's March, my car insurance renews in May, and it's going to be around $1,000. So I have three months to save up $1,000 if I want to pay that in one shot, which I like to do. So I have three months, which means I need to save about $330 a month, set that aside in March, April and May to be able to pay my car insurance in full.
0:12:56.4 AH: That's a big chunk of change. I might not be able to do that. And I had other bills that were priority in the last several months. So I didn't set aside from my car insurance yet in reality, because I'm a human being and I cannot necessarily reach all my goals in one hit, I'm probably going to save closer to $500, make that payment in May, and then over the next few months, pay the rest as quickly as I can. But ideally for next year, come like July ish, July-ish. I'm going to be like, okay, I paid off this year of car insurance. I have 10 months to save up for next year. It's going to be around $1,000. I need to set aside a hundred dollars a month for my car insurance and then come next May, I to pay it in full. I am going to be kind to myself and not get all down because I didn't meet my goal of being able to pay it in one payment. And I'm going to be flexible, and then I'm going to plan a little bit better for next year if I can. This is a big process and you're going to do this kind of budgeting on a regular basis.
0:14:00.5 AH: For me, it's weekly. I found that when I manage my money weekly, I do a much better job of remembering what's what and getting into the rhythm. I look at what I have in my checking account. I make a note of what I need to spend it for in the next couple of weeks, what bills monthly or non monthly or predictable expenses or unpredictable expenses that it needs to cover. I make note of that and that's how I use the money. And I have a written budget so that in a week when I get paid again, I have a guide as to what that money also needs to pay for. So we're taking all of these disparate numbers and thoughts in our head and we're putting them into software or paper or spreadsheet because your head is busy enough. This is a lot of information. And if you've never managed your money in an organized way with a budget, this is big. It could be that the best way for you to start is to budget only for your weekly and monthly expenses and anything extra goes into one big pot and your less regular expenses get pulled out of that.
0:15:04.3 AH: You could be a super nerdy detail oriented person once you dive into budgeting and you want to account for any potential expense and have a little bit of savings for each. Once you get started, you find your budget style. But starting in some way or another is the most important step. Now the next two episodes we're going to talk about how to conquer spending issues, how to handle debt and build a savings and we're going to apply all these concepts to both business and personal spending. So if you're able to draft out a business budget, if you're able to draft out a personal budget, that's going to help you a great deal in accomplishing your money goals. Now we have our chat with a colleague. My chat with a massage therapist today is with Erin Copeland who is the owner of Erin Copeland Massage in Florida with the website erincopeland.com and I'll have that in the show notes and your definitely going to want to check that out. Erin has a massage practice and teaches about caregiving and care for caregivers. Erin, welcome.
0:16:09.5 Erin Copeland: Hello. I'm so happy to be here today.
0:16:12.0 AH: This is exciting. Okay, tell me a little bit about your massage practice first.
0:16:17.8 EC: So I've been a licensed massage therapist for, this is my 13th year which feels insane to me. It's like the longest job I've ever had where, which is a testament to how much I actually enjoy the work.
0:16:29.5 AH: That is awesome. I love it. I feel like when I started there weren't a lot of long time career therapists. Like you didn't know a lot of therapists who've been doing it for more than 10 years, and now there's so many of us. So I love that. Who do you see in your practice?
0:16:43.5 EC: I see a lot of people working through chronic pain. I see a lot of folks. It's a big senior community here, and I've just found a niche where I can provide effective massage without beating people up. And so I found a whole community that loves that because they don't need elbows digging in their back, but they need some soft tissue release. And so I love that I have found that space, and I love that there's people that love it.
0:17:14.6 AH: I think the first time I talked to you, we actually talked a lot about your caregiving teaching. And I'm totally giving it a weird term, caregiving teaching. But you speak and teach and write for caregivers. What's that all about?
0:17:30.2 EC: And I do consider myself a caregiving educator versus like a coach. So you are right on it because... So I wrote a book. I'm going to back up a second, because my husband had a liver transplant. And just so that everyone knows, he is doing fantastic today because sometimes I forget to tell people, and they're like, oh, my gosh, is he okay? After his liver transplant, I had such a hard time recovering from that caregiving role, and we did almost lose him a few times. And that trauma that I lived through was so hard for me. I didn't understand I was even living a trauma. I didn't know what was happening to me. I didn't know what role I was filling. And it was actually two years after that, I was like, I have to write a book about this because other people shouldn't feel so alone like I did. Like, there have to be other people that feel this way, and they need to know it's okay, and they need to know they're gonna be okay. And so I wrote a book, Welcome to Caregiving the Things Caregivers Never Talk About.
0:18:33.1 EC: And it debuted as an Amazon Bestseller. And I'm super proud of it. And I've just continued, the teaching I work with medical social workers, nurses. I also work with caregivers. So on the medical side, I try to educate on what the caregiving experience is like and how people can support caregivers. And then for caregivers, it's really an experience of validation and understanding and teaching what you're going through. Because, like I said, I didn't know what I was going through. I didn't understand it at all. I was just going through the motions and checking the boxes. And so when people can get into that place of understanding, then they can take better steps and make better choices so they don't end up sick themselves on the other side of the experience. And then both worlds can joyfully come together. Because I talk to my caregiving people, and then they learn I'm a massage therapist, and they get super excited. And I have people come to me for massage because they see that I'm a caregiver, and they're in that role, and they're like, oh, my gosh, she gets it. And so it just comes together beautifully for me.
0:19:39.4 AH: Okay, you're here today to tell us, what is the thing that you would do differently if you could go back in time and start your business again?
0:19:47.9 EC: If I could go back, I feel like I would have been more mindful of my mentors.
0:19:56.6 AH: How so?
0:19:58.5 EC: So way back when, 13 years ago, I feel like there were not as many resources as there are today. Now you have Facebook groups, you have different communities. I mean, you run a beautiful community. What you have set up did not exist.
0:20:12.1 AH: It did not.
0:20:16.5 EC: 13 years ago for people.
0:20:16.8 AH: That's why I made it.
0:20:18.9 EC: And there's beautiful organizations like ABMP, and so there's all kinds of resources you can access. But I feel like for an industry that is so intuitive, because that is how we work. We work intuitively as massage therapists. When it comes to the business side, we abandon our intuition, and then we start to follow other people without checking in with ourselves to see if it's the path that's right for us. Because what works for one massage therapist, whether it's the kind of massage they do, how much they charge, the hours they work, all of the things may work beautifully for them. They may have been doing it that way for 30 years, and they are kicking butt. And it might not be the same for you.
0:21:11.6 AH: Dang. I have so many things to think about now.
0:21:16.1 EC: Well, everyone to have all the things to think about.
0:21:19.0 AH: But it's so true. Like, I remember when I went to... Oh, I got a a business mentor through Score. Like, through the small business, I don't know. It was through the SBA, and it's called score, and they give you, like, all these business advice and guides and templates, and one of the things you could do is get a mentor. And they paired me up with this woman who is an attorney, and so I went and went with her, and I told her about my little sole proprietorship and how I had my massage practice and I rented space to a few other massage practitioners and acupuncturists. And she spent the rest of our meeting, like 45 minutes telling me that I should expand into the office next door, hire everybody as employees, definitely become trained in yoga so that I could teach yoga in that space next door and a whole bunch of other things. And I was just like, that's not, I don't want to be anybody's boss. I really like subletting space. What I'd like to know is XYZ about business stuff. And I think I needed to know a little bit more about marketing and stuff at the time.
0:22:23.3 AH: And it was so not fitting for me. I can't believe, like, I think I wasted another meeting with her too. I think about how much time I wasted on people who gave me terrible advice.
0:22:35.8 EC: If your mentor isn't asking you to check in with yourself and see if it feels right to you or ask you what feels good, you might need to stop and pause and think about that relationship. And if it's a very technical thing, like how do I do this bookkeeping. That's one thing. But when it's coming to as being individual business owners and solopreneurs, how we get that luxury of building a business that works for us. And so I think it's such a beautiful opportunity and worthy of sitting with our intuition to build something that really does suit our world.
0:23:21.2 AH: Mindful of your mentors. Erin Copeland, thank you for that little bit of wisdom. And everyone, remember, you can go to the show notes@abmp.com/podcast and you will get a link to Erin's website including the caregiving book and other materials. There's some free materials, free downloads and stuff too, so y'all definitely need to check that out. Thank you so much, Erin.
0:23:46.3 EC: Such a pleasure to be here. Thank you so much for having me today.
0:23:50.1 AH: If you have a question about running your business or an idea for an episode, I would love to hear from you. Reach out via email at businessorpressure@abmp.com. You can also find me building websites and coaching massage therapists at deepbreathdigital.com. Make sure you subscribe to ABMP podcast so you don't miss a beat. I'll see you right back here for the next episode. I can't wait.