Everyone has to deal with money in life. There are those who choose to ignore it and let the bills pile up, or just delegate the finances to someone in the household, or you’re the one handling someone else’s estate. At the end of the day, dealing with money is something that all of us have in common.
Entrepreneurs and small business owners generally run the finances of their pride and joy. Blood, sweat and tears were poured into the creation of their business, but now the hard part actually begins. Keeping the business afloat and making sure more money comes in faster than it does to disappear is on every single mind of the small business owner.
So many small businesses fail, especially the young ones, because of poor management of money. Learning about your own behaviors towards money can help bring self-awareness and propel change towards the way one approaches money. Time to take a deep and honest look into our behavior with money.
The psychology of money is essentially the study of our BEHAVIOUR with money. It doesn’t matter if you’re a wiz with money, or can remember formulas. Psychology explores the roots beneath our behaviour with finances. Why do you do what you do? What is it that pushes you to save or spend or invest your money the way you do? How do you view money? Is it something that you dread? Do you spend money freely like it grows on trees? Do you keep all of your cash hidden behind that painting in your secret safe?
Which One Are You?
The spenders are the ones most easily recognizable. Got money? Not for long! Spenders will find a way to spend their hard-earned cash by spending on extravagant shopping sprees, or during a midnight sale online. Savers, on the other hand, will save everything they make. These money habits become unhealthy when taken to extremes, if spenders spend everything they have and go broke, or savers never spend a dime and never have quality life experiences.
Another set of money behaviors involve the details of finances. Numbers. There are those who are so into the minute details, are very organized with their bills, balance their checkbooks regularly, and love total control of where their money is going. Then there is the complete opposite – the ones who have no interest in money. If one has no interest in money, then most likely they will not know what to do with the money or don’t care enough to do a deep dive into their accounts. Budgets are boring!
Money provides safety and status for an individual – but which one is driving you? Knowing that there’s an emergency fund you can dip into, or survive a job loss, or having a good retirement, can provide a good night’s sleep for those who view money as a safety net. Status bestows a vision of success to the world around us. People’s idea of success is different, whether it’s regularly vacationing, owning 10 cars, or owning a booming business; success is measured differently for everyone. Safety versus status is greatly influenced by your childhood upbringing and family.
How did Mom and Dad talk about money? Was it easy to tap into money, or was it difficult to achieve? Your attitude towards money was shaped by the way your family dealt with finances. If your mother tended to relegate unopened bills to your father, you may do the same thing as an adult, deferring responsibility to another person. If Dad was a workaholic and never spent a dime, even for badly needed new shoes, then you may become a reflection of him as well.
Small Business Struggles
The struggles of small businesses are REAL. Especially with the COVID-19 pandemic in effect, small businesses are feeling the stresses of running their dream job even more keenly. Most small businesses are run by one person, or a family, that wants to build something as their legacy, so most don’t have the luxury of having a marketing department, financial planners, and top notch social media gurus. Most learn these skills while growing their small business. More than ever, becoming aware of how you spend, save and invest your money, is important for the health and growth of your small business.
The top struggles of small businesses are:
- Finding customers
- Managing workflow
- Hiring the right people
- Financial planning
But there are ways to fix this!
On June 17th, we invite you to join myCareBase for a webinar where we discuss Small Business Finances – Creating Your Money Map! We will be joined by Michelle Cooper, CEO, Alchemy Accounting & Bookkeeping; Tara Lamond, Small Business Advisor; Jordan Hopper, Portfolio Manager, Vancity Savings Credit Union; and Nazlin Sunderji, Portfolio Management Consultant; Vancity Savings Credit Union. We will be discussing ways to help business owners expand their awareness about money matters.
Register in advance for this informative session that is sure to set you on the road of self-awareness and personal and professional growth!
Just click the link and we’ll see you there!