I just came back from speaking at the Creative Freelancer Conference in Denver. Besides the fact that I saw the most beautiful and creative selection of business cards, I also met a group of super nice, unassuming, creative (of course!) and smart people from all over the country.
I’ll start with this quote: “Galia I’m scared of money!” I proceeded to ask her what she was scared of. “I’m scared of everything, opening my cre.dit card bills every month and looking at what I spent, not managing my business expenses and not even dealing with my old 403b from my previous job”. Now this woman was clearly talented from looking at her work. It was a lot to consume just listening to her. I calmed her down immediately by asking her to take little baby steps and pick one of the following:
- She knew her credit card bill was over $2,000 per month and really wanted it to be only $1,000. She was able to pay it off every month but it was eating up her savings. I suggested putting a post-it on her credit card and every time during the week she charged something, she just wrote down the dollar amount. When she was up to $250 for the week, she had to stop using the card. That should easily allow her to not spend more than $1,000 per month.
- She was just starting out – even though this was her second career. She was unsure of how much to take from savings and was spending unconsciously for her business. I quickly asked her if she was ready to spend $30,000 from savings. “NO!” she quickly responded. How about $10,000? That was more manageable. We then took the $10,000 and created a plan for it over the next 3 months (website, marketing, new business cards).
- She had spent many years as a professor. I knew she would have accrued a tidy 403b from her time there. She knew nothing about it. Given that she was not that far away from retirement age, I insisted that first thing Monday morning, she contact her old HR department and find out the current status. That was too much money to be left lingering.
A few new things I learned from my own presentation “It’s Your Money, So Take it Personally”.
- Most of the room knew their FICO credit score – good for them!
- Sharing their money strength was a fun exercise and the room couldn’t stop talking. Everyone has a money strength- what is yours?
- Stop worrying! Find out your numbers and you will immediately not feel so stuck. For example, do you know how much you need to save monthly or annually to retire? Find that number out, stop worrying and then you can move on to start actually saving that amount.
- Build your team. Have a good accountant that can help you with your estimated taxes, and define your deductions
Ilise Benum, Founder of Marketing-Mentor, and co-organizer of the CFC event opened up with “You Are a Business”. While her talk focused on freelancers taking themselves seriously as a business, many of her points are relevant to my clients when tackling their personal finance matters. Plus, many of you reading this are freelancers. I knew these points but it was affirming to see them in black and white. You could see the heads shaking in agreement throughout the large room.
- Think of yourself as a business and take yourself seriously. Believe in the value of your work and it will convey to others.
- Always put your agreements in writing.
- Always get a deposit.
- Never work for free. If you are going to do it, choose it and don’t have it forced on you.
Dyana Valentine, who helps passionate creative entrepreneurs get unstuck, www.dyanavalentine.com, walked us through a hands-on roll up your sleeves exercise on “Pitch Perfect”. While I was filling out the exercise, which was something I hadn’t done in years, she asked to write how my clients felt after working with me. I came up with:
- Relieved: Most people realize their situation isn’t as bad as they thought it was and it is easy to figure out the next step.
- In Control: Once we figure out their snapshot, what they own, owe, spend and earn, there is an instant feeling that they are in control of their money and the fear is gone.
- Have a Plan to Follow: Most people just want to know what to do for the next step. If they have old IRAs, where should they roll them over and what funds should they pick. Coming up with a plan that is easy for them to do themselves and follow creates serenity.
Luke Mysse, owner of Cross Grain, talked about managing your clients. As he was chatting about being clear on the clients you want to work with and creating boundaries with how you work, I had an AHA moment myself! Check out on my site for two characteristics of my ideal clients:
- Someone who doesn’t just get information overload to collect information. But rather someone who can get the information they need and will follow the action plan.
- Someone who is willing to make changes with their money habits.
In my seminars and individual sessions, I often suggest different ways to budget or different places to open an IRA. However, not every method works for every person. One idea is to really examine your habits – not money but overall. What works for you? Are you the type who loves lists? Or are you the type who needs a deadline? Or are you the type who really uses online tools? If so, think about how you can change some of your money habits to fit your lifestyle; rather than the other way around. Don’t put yourself in a pigeon hole of not fitting in with your money. He also discussed setting policies about being a business owner. How does this apply to your personal finances?
- Is your policy to start understanding mutual funds or ETFs?
- Is it to save at least 10% of your income?
- Is it to start checking out one website every week relating to personal finance?
Finally, turn off the outside chatter when dealing with your money. Don’t answer emails, turn off your facebook alerts, don’t watch TV. Yours bills will get paid faster, you will be clearer on your cashflow and your savings account and you might even want to tackle the Morningstar page of your mutual funds!