How to Become a Millionaire and Live Your Dream Life, According to Rachel Rodgers

What is your relationship with money? Do you live in scarcity mode or do you have an abundance mindset? Either way, we need to get better at talking about money if we ever want to be better at managing it, and eventually having more of it. Well, our new series, The Money Files is set to change all that by helping women become masters of their own finances so they can manage their money and their future.

Imagine having to work eight extra months just to earn the same pay as your white male co-workers. This is the likely reality for Black women in the United States as we marked Black Women’s Equal Pay Day on August 3rd this year. According to the National Women’s Law Center, on average, Black women are paid $0.63 for every $1 their white male counterparts earn. That equates to $964,400 (nearly $1 million) in lost income over a 40-year career. 

In honor and support of Black Women’s Equal Pay Day, we spoke with Rachel Rodgers—who's leading the conversation around social injustice and Black wealth—about her mission to change these statistics and close the pay gap. Through her company, Hello Seven, and her recently published book, “We Should All Be Millionaires,” she is empowering other women to hit seven figures by changing their relationship with money, stop procrastinating, and start making million-dollar decisions. 

How do you become a millionaire? What does it take to hit seven figures?

These are questions most of us have asked ourselves at least once in our lifetime and while you might think it’s a pipedream, Rodgers is here to tell you that it isn’t. The author, intellectual property lawyer, business coach, CEO of Hello Seven is on a mission to help other women hit seven figures without sacrificing their family or sanity. Over the past eight years, Rodgers has worked with New York Times-bestselling authors, tech startups, coaches, consultants, doctors, accountants, nutritionists, and so many more to take their business to the next level by creating and protecting their own intellectual property to scale their businesses to a million-dollar (or more) enterprise. (She outlines her four steps to becoming wealthy in any climate over on our Ask an Expert series on IGTV.)

In addition to her work at Hello Seven, Rodgers is also leading the conversation around social injustice and Black wealth with her Anti-Racist Small Business pledge. Instead of calling them out, Rodgers is calling companies in to have an honest discussion about racial justice and to help them determine how they can and should be part of the solution—that pledge has been signed by 2,200 businesses and counting.

So, do you want to learn more about Rodgers’ strategy for how to become a millionaire without sacrificing your family or your sanity? It’s time to stop procrastinating and start making million-dollar decisions by investing in yourself to build your dream life.

“One of my s’ heroes, Madam C.J. Walker, became America’s first female millionaire back in 1906,” Rodgers explains. “She was born to slaves. She was poor. She was Black. She was oppressed. She had every obstacle you can imagine and more. All the odds were stacked against her. Yet, she became fabulously wealthy. She launched a haircare company, built her fortune, and provided dignified jobs for hundreds of people. She bettered herself and the world. If she could do it then, you can absolutely do it now. And you can start today.” 

Of course, there is no magical solution to gaining wealth but there are fundamental objectives that can help you get there. In the words of Rodgers, “Instead of obsessing about how to trim your budget down to the bare bones, focus on exponentially expanding your income.” And you can start with as little as $100 (or less). Are you ready? Let’s go!

Photo: Courtesy of Hello Seven.

Stop procrastinating

The sooner you start building wealth, the better. 

If you’re struggling to motivate yourself to make and save more money, the main thing to remember is that having more money is never really about “the money.” It’s about the people you love and the causes you care about.

Here’s an example: A few years ago, I was traveling out of town for work, and I received a phone call about an emergency situation happening at home. I was immediately panic-stricken. All I could think was, “I need to get home now. Get me on the next flight home. I don’t care what it costs.”

I booked a super-last minute flight with three layovers and it cost $1,700. An outrageously expensive flight, but I didn’t care, and it didn’t matter. I could afford it. No problem. Done.

A typical American does not have an extra $1,700 laying around for emergencies or pleasure or any other reason. And this is a problem. 

You need more money because money provides more options for you. The option to fly home immediately if you need to. The option to send your kids to the best school. The option to leave a bad relationship without worrying if you can afford to live by yourself. The option to donate to causes like Black Lives Matter. The option to live as you choose, in freedom, in peace.

Again, if you’re struggling to motivate yourself, remember, it’s not about the money. It’s about the people you love. It’s about the lifestyle you want. It’s about having options instead of limitations. 

Look: do you want options, or not? If you do, then get after that coin!

Start Investing

Like so many things in life—jogging, cycling, twerking—investing may seem intimidating at first, but you just gotta dive in and start! 

Start small and keep it simple. I love the app called Mint which is a great way to get started with investing. You can start with $100 (or less) and go from there. Once your $100 investment brings you an extra $20 that you didn’t have before, you’ll be like, “Omg, I just made $20 bucks! Yay, free money! I love this!” and you’ll be inspired to keep going!

Make Million-Dollar Decisions

If you want to start earning more money than ever before and build serious wealth, these are the three fundamentals:

1. Stop making broke-ass decisions.

A broke-ass decision (a.k.a., B.A.D.) is any decision that steals your money or steals your time, energy, peace, joy, or power, and therefore, blocks you from becoming wealthy. For example, allowing your spouse (or child) to interrupt you 15 times an hour when you’re trying to work from home, thereby making it impossible for you to concentrate. That is a broke-ass decision. Stop doing that. 

2. Start making million-dollar decisions.

A million-dollar decision is any decision that brings you more money, and/or more time, energy, peace, joy, and power. It’s a decision that makes you feel rich—financially, emotionally, or both! Investing in a new blazer that makes you feel like a CEO instead of a shlub? Yes! That’s a million-dollar decision. Raising your hourly rate? Yes. Starting a side-hustle so you can start earning an extra $5,000 per month? Yes. Fueling yourself with high-quality food? Yes. Exercising daily? Yes. The path to millionaire status is paved with million-dollar decisions.

3. Surround yourself with people who are doing it. 

Fact: You are heavily influenced by your social circle. For instance, one study found that when low-performing students start hanging out with straight-A students, the low-performing students start scoring higher grades too. Success is infectious. It’s true with grades and it’s true with money, too.

If you want to become wealthy, start hanging out with ambitious people who are already wealthy, or, who are committed to the same goal. 

That’s why I launched my Club, a place for women who want to make serious money. Because when you hang out with millionaires and millionaires-in-the-making, the golden-money dust rubs off on you!

Invest in Yourself

To me, “investing in yourself” means doing anything that makes you feel powerful. Because the more powerful and confident you feel, the more money you’re gonna make. 

There are infinite ways to invest in yourself, and it looks different for every person. 

You can throw out your stained yoga pants and invest in a new wardrobe that makes you feel like a boss. You can invest in hiring a part-time personal assistant five hours a week so they can clear 1,000 tedious tasks off your plate and free up your mental bandwidth. You can invest in education, training, coaching, therapy, or all of the above. What’s going to help you feel your best? Whatever it is, do that.

Swap Budgeting for Expanding

Many people, especially women, are told, “You should go on a diet,” and, “You should cut back on your spending.” 

Both of these statements are deeply offensive to me because what you’re really saying is, “You should shrink and make yourself smaller.” “You shouldn’t reach for too much.” “You should find a way to be satisfied with much less.” “You shouldn’t take up too much space.” “You shouldn’t want too much, have too much, be too much.” 

Boo to that oppressive patriarchal nonsense! 

I take the opposite stance. I say, “How big do you want to live? What’s your dream life?” and then, “Cool, so what’s your plan to make that happen?” 

Try this: get a piece of paper and write down everything you would love to have. Your ultimate dream life. 

Do you want a three-bedroom house in the best neighborhood in town? Do you want a full-time nanny? A tutor for your kids? A new car with all the latest safety features? Make a list of what you truly want. 

Then, take your dream-life-list, head to Google, and find out how much each item costs. Crunch the numbers. Find out what it would cost to have your ultimate dream life. It might not be as much as you think. You might realize, “Huh, okay, my dream life costs $10,000 per month,” or $20,000, or $30,000, or whatever it is. 

Once you have this information, it’s empowering, and it leads to new questions. Now you can ask yourself, “Well, what’s it going to take to earn $10,000/$20,000/whatever amount per month so I can have my dream life? How can I pull this off?” Get creative and write down 25 different ways you could earn more and make it happen.

I do this exercise with my clients and it’s fascinating to see what they come up with. 

Instead of obsessing over how to trim your budget down to the bare bones, focus on exponentially expanding your income. 

Ditch the Debt Stress and Focus on Earning More

Stop stressing about debt, and instead, just focus on earning more money. It’s really that simple. 

Start a side hustle. Ask for a raise at work. Double your hourly rate. Text your cousin and tell him it’s time to pay back that loan. Focus your attention, time, and energy on one question: “How can I bring more money in the door?” Focus on that. Get that cheddar. And before too long, you’ll be able to pay off whatever debt you owe.

Learn to Trust Yourself

Taking a risk really just means, “doing something that’s going to change your life in a positive way before you feel totally 100% ready to do it.” And guess what? You are never gonna feel 100% ready. If you’re waiting for that moment of perfect readiness to arrive, it never will. So you might as well take the leap now. 

Part of becoming wealthy is learning to trust yourself. Trust your instincts. Trust that you will always land on your feet, one way or another. Trust in your creativity and resourcefulness. Trust in your ability to get things done. By taking a tiny risk now, and thriving, you build a little more trust in yourself. You gain evidence that it’s okay to take risks. This emboldens you to take bigger risks later on. So, start with a tiny risk today and build from there.

Diversify, Diversify, Diversify

I’m all about multiple revenue streams! In terms of how to do this, step one is, you need to leverage your intellectual property. Leverage your what, now? This just means, take something you’ve created (a system, method, process, formula, system, secret recipe, etc.) and package it so that people can purchase it 24/7 even when you’re asleep. 

A great example is, let’s say you’re a dog trainer. You have a unique training process that your clients love. They get amazing results and always rave about you but you can only see 10 clients per week so that’s limiting your income. 

So, you decide to create an online program (with tutorial videos) so that people all around the world can learn your special process. You sell your program on your website. Cha-ching! You just turned your intellectual property (a.k.a. your unique process) into a cash-generating product. 

You might be thinking, “But I don’t have any intellectual property!” but that’s not true. You do. Almost everyone does. You probably have some blind spots and you’re not seeing yourself clearly. Chat with a friend, hire a business coach, or join my Club and you’ll quickly see, “Oh, wow. I’ve been sitting on a million-dollar idea, and I didn’t even realize it.”

Make Wealth Your Reality

What’s a one-million-dollar decision you could make today? One decision (big or small) that would bring more money, or, more time, energy, peace, and power into your life? 

Do it. Make that decision. Then another. And another. This is how you will build wealth, and enjoy the freedom and options you want. “Other people have done this, and I can do it too” needs to become your new daily mantra. It’s the truth. And the more fiercely you believe it, the sooner it will become your reality.

Click to learn more about Rachel Rodgers’ business Hello Seven and start your journey toward building wealth today!

This story was originally published on August 13, 2020, and has since been updated.

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These Founders Are Bringing Fair Labor Practices, Artisanal Jobs, and Economic Development to Tunisia

You asked for more content around business finances, so we’re delivering. Welcome to Money Matters where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.

Photo: Courtesy of Fouta Harissa

When Alia Mahmoud and Lamia Hatira met, they felt an immediate kinship. “We each have a Tunisian father and an American mother and our lives were sort of mirror images,” says Mahmoud. “Lamia was born and raised in Tunis and spent time in Seattle growing up, while I grew up in New York City and spent summers in Mahdia, Tunisia,” she elaborates. Although both women live abroad today—Mahmoud in Miami and Hatira in São Paulo—their families still live in Tunisia, and the textile brand Mahmoud and Hatira founded, Fouta Harissa, is their way of investing in their “tiny but mighty Mediterranean country,” Mahmoud tells Create & Cultivate. But they’re not just investing capital, they’re investing in fair labor practices for the country’s artisanal community.

By working with Tunisian artisans to craft high-quality, hand-loomed textiles, the brand is dedicated to preserving artisanal weaving in Tunisia while also contributing to the country’s economic development. “Unfortunately, Tunisian artisans are generally undervalued and underpaid as the custodians of our cultural heritage,” explains Mahmoud. “We want to change that by bringing the world a modern take on handmade artisanal products that also support fair labor practices, use sustainably sourced materials, and contribute to economic development in Tunisia,” she notes. Not only that but each of the artisans they work with is employed in a full-time position at the brand’s partner workshop and paid an above-market rate that exceeds the living wage.

Ahead, Create & Cultivate asks the co-founders all about how they self-funded the socially-driven brand, why they recommend hiring an accountant ASAP, and what money mistake has taught them the biggest lesson.

How did you fund Fouta Harissa? What were the challenges and what would you change? Would you recommend your route to other entrepreneurs? 

Lamia Hatira: We started with a small friends-and-family investment of $20,000 which helped us start our entities in both Brazil and the U.S.A. We are definitely still working on a small budget. It’s challenging because you don’t have the resources to do everything you want to do right off the bat, but it’s also kind of wonderful because you learn what really matters for your business and how to make the most of what you have. 

Each experience is definitely unique, but if you have an opportunity to get seed investment from friends and family at the initial stages, embrace it. Just make sure you’re on the same page with your investors about how active a role they will play and get in writing in your operating agreement.

The most important thing is to do what you’re comfortable with. We knew we weren’t ready to take out a huge loan or ask for a larger amount at the beginning because we didn’t want to owe anyone money or give away too much equity before we knew more about the intricacies of our business.

Three years later, we are now ready to take on more investment because of everything we’ve learned and because we know what works and doesn't work for Fouta Harissa at this stage. 

What was your first big expense as business owners and how should small business owners prepare for that now?

Alia: Legal fees to register our business and write an operating agreement, as well as placing our first major product orders with our manufacturer were definitely our first big expenses. I would advise taking the time to build a business plan in order to price out these early costs to the best of your ability, from there figure out where that money is coming from. A great way to generate some early cash flow is to do a friends-and-family sale before your product launches officially. This can help you raise some money and generate buzz.

Lamia: Beyond your most basic costs, make sure to include the other expenses that will ensure that your first customers get the experience you want them to have when they receive their product. This not only includes the product itself and its shipping, but the packaging, the marketing, the communications—they add up. 

What are your top three biggest business expenses every month?

Alia: Beyond paying for production, our biggest monthly expenses include the shipping costs to send our Foutas to customers, digital ads on Facebook and Instagram, and investing in regular digital marketing and PR.

Do you pay yourselves, and if so, how did you know what to pay yourselves?

Lamia: Not yet! We’re working on it.

Would you recommend other small business owners pay themselves? 

Alia: Absolutely. When it’s your business, you’ll work harder than you’ve ever worked on anything else before. Your time is valuable. Your effort is valuable. Build it in from the beginning. One thing we didn’t take into consideration, that we wish we had, is the employee taxes a business incurs in order to draw a salary. Even as founders! So until you’re making enough profit to distribute in those early years, build a small salary into your costs plus taxes.

How did you know you were ready to hire and what advice can you share on preparing for this stage of your business? 

Lamia: You don’t have to go from being a founding team to hiring a staff of full-time employees. We work with a lot of brilliant people, mostly as independent contractors. At this early stage in our business, it gives us the flexibility we need to try new things, learn, and try again. We’re so grateful to the talented people who believe in Fouta Harissa enough to devote their time to growing this business with us. 

I think you know when you’re ready when you realize you don’t know how to do everything, and that’s okay! We’re still in the process of learning exactly what our strengths are as co-founders and when and where it makes the most sense to invest in a new skill versus finding an expert who can help. We look forward to the day when we can have full-time staff on the team. 

Did you hire an accountant, and if so, would you recommend hiring an accountant to other small business owners? 

Alia: 100%. We recommend hiring an accountant as one of the first things you do. They can even advise you when you’re registering your business. We asked around and got recommendations from other female business owners until we found ours.

What are some of the tools or programs you use to stay on top of your business finances? 

Alia: Quickbooks has been a lifesaver. It’s a worthwhile investment and makes your accountant’s life a lot easier come tax time. We also use Square for offline payments and inventory tracking. And of course, Excel—a classic—where all the planning and projections happen.

Where do you think is the most important area for a business owner to focus their financial energy on and why?

Lamia: I’d say focus your energy on product quality and your people. Your product has to be the best possible thing you can put out into the world. At the end of the day, if you don’t have a great product, you don’t have a business. Just as importantly, invest in relationships. They are everything, especially at the beginning. You might not always be able to pay everyone you want to but be creative. Find ways to uplift them, involve them in decisions, consult them, and barter with them.

Do you think women should talk about money and business more? 

Alia: Definitely. We’re always worried about speaking up because we think everyone else has it all figured out. When you’re a small startup, you think there’s no way others have made the same mistakes that you have. But if we can talk about it more openly, with no shame or pretense, then we can really support each other to make the best and most savvy money decisions. 

The reality is, without good finances, there is no good business, and some of us can really use all the help we can get. 

Do you have a financial mentor, and do you think business owners should have one?

Lamia: We have two. One on the more day-to-day financial management who helps us build spreadsheets, come up with pricing strategies, and analyze reports; and another one who advises more on visionary planning and fundraising. Both are women and both are total badasses.

Business owners definitely need a financial mentor, or more. Find as many quality mentors who care about you as possible, and cultivate those relationships.

What is the biggest money mistake you’ve made and learned from along the way?

Alia: Underestimating the cost of digital marketing. As an e-commerce brand, we definitely did not anticipate the challenge of competing with companies putting in $10,000+ into social media advertising every month. When you’re just starting out with limited budgets for digital ads, it can be hard to compete. This became even more acute during the pandemic because everyone became an e-commerce brand and doubled down on digital. My advice would be, plan for a bigger budget for ads early on or find creative ways to not rely on them like collaborations, partnerships with brick and mortar stores, and investments into your most loyal customer base to encourage repeat buys.

What is your best piece of financial advice for new entrepreneurs?

Alia: Whatever price you’ve determined for your product, double it. Seriously, there are so many costs you don’t even know exist, beyond your COGS, when you launch a new product. All of those should be built into your MSRP. And do as solid a financial plan as you can. 

Anything else to add?

Lamia: If finance is your thing, use it to your full advantage and help others out. If financial matters don’t come naturally to you, make sure you learn the basics of your business finances to always know what’s going on, and surround yourself with people who know what they’re doing and who you can learn from.

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5 Black Financial Educators Who Are Empowering Us to Take Control of Our Finances

Photo: Courtesy of Tonya Rapley

Welcome to 5 for 5, where we spotlight 5 women in 5 minutes or less.

It’s no secret that Black women are not paid fairly. On average, Black women are paid 37% less than white men and 20% less than white women for doing the same work, according to LeanIn.org. But despite the stats, Black women *can* build wealth. Ahead are five financial educators who are advocating for change, empowering women to take control of their finances, and pushing these stats in the right direction.

1. Dasha Kennedy

Dasha Kennedy, a.k.a. @thebrokeblackgirl, doesn’t hold back when it comes to sharing tips for assessing personal debt, reaching a big financial goal, and implementing a financial wellness self-care routine.

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2. Tonya Rapley

The “Millennial Money Expert” and founder of My Fab Finance, Tonya Rapley, is on a mission to help 100,000 people make at least one money decision they’re proud of, whether it’s buying a home or saving money on a trip.

3. Tiffany Aliche

Known as @thebudgetnista on Instagram, Tiffany Aliche breaks down big goals like building wealth, paying off a mortgage, and buying a home while paying off student debt into achievable (dare we say simple) steps.

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4. Marsha Barnes

The brains behind @thefinancebar, Marsha Barnes is a must-follow for friendly reminders to engage with your finances, adjust your budgeting plan, and start an emergency fund, as well as tips on how to follow through.

5. Jamila Souffrant

The founder of @journeytolaunch, Jamila Souffrant, is all about helping people grow their savings, get out of debt, and gain financial freedom and independence. (Psst… her podcast, Journey to Launch, is a must-listen!)

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Attention, Self-Employed Bosses! Here Are 4 Tips for Budgeting on a Variable Income

Photo: ColorJoy Stock

During my first month as an entrepreneur back in December of 2018, I made $226 as an administrative assistant. Fifteen months later, I would go on to quit my day job and make upwards of $5,000 a month as a freelance writer and content creator for Rosetta Stone. 

While I had excitedly waited to get to this point, it was still hard for me to give up the financial security of my day job. Without corporate perks like PTO, health insurance, and automatically deducted taxes, I suddenly had to make sure I had enough to get through the expected—and unexpected—costs each month without the help of a regular paycheck. 

As an entrepreneur or freelancer, it is completely normal to have an irregular income, but it can definitely make budgeting your money a little trickier. Luckily, after a lot of trial and error and some helpful advice from a top-notch financial coach, I can finally say I’ve figured out how to budget with a variable income. Since this is something I wish I had known years ago, I decided it was time to share with my fellow business owners!

1. Calculate Your Monthly Needs

Before taking control of my budget, I had no clue how much I really spent per month. Like most young business owners, in my first two years of business, I was pretty much taking whatever job I could get—mostly because I just needed to get my bills paid. Never really knowing how much to expect from month-to-month, I ignored my bank account completely.

Every month I would just cross my fingers and hope I wouldn’t get an “insufficient funds” notice from my bank. But, this method led to a lot of extra stress and negative emotions around money. 

So, one day, I sat down and went through my last three months of bank and credit card statements and looked at how much I had been spending on necessities. This helped me figure out how much I really needed to be making each month to get by. Some common needs within a personal budget include things like:

• Rent

• Utilities

• Groceries

• Gas (only for required outings)

• Debt repayments (minimum required payment)

• Phone

• Personal care (toiletries, medicine, etc.)

• Insurance (car, life, etc.)

• Essential family expenses (childcare, clothing, etc.)

I also included the needs I had for my business. Some common business needs within a budget include things like:

• Employee/contractual worker wages

• Website hosting

• Email hosting

• Insurance (health, business, etc.)

• Public relations

• Marketing/advertising

• Business-related debt repayment

• Travel

• Taxes

• Business-related software (accounting, email management, website building, social media marketing, SEO, project management, CRM, communication/messaging, etc.)

• Business-related hardware (computers, phones, printers, etc.)

And this isn’t just what I learned from personal experience. When I sat down with financial coach Yvonne Tran for one of my podcast episodes, she echoed this sentiment as well. “If you have variable income my biggest tip would be to know how much you need to pay every month for expenses or bills and make that a goal to bring in every month in your business,” Yvonne shared.

2. Reset Your Money Mindset

Like it or not, we all have certain ideas about money. Whether you grew up hearing “money is the root of all evil,” “a penny saved is a penny earned,” or any other common money-related beliefs, our society has a lot of positive and negative associations with money.

Having grown up in a family of entrepreneurs, money struggles—and the negative money mindset that comes with them—were no stranger to me. For a long time, money was something that I considered stressful and even dirty. It wasn’t until I learned to see money as a tool and something to be grateful for that the money really started flowing. 

“Money mindset is definitely really important because if you view money as so stressful, super complicated, and intimidating then I can show you all the ways that you can fix your financial situation, but if your mindset is telling you ‘no’ then it’s not going to work out in the end,” Yvonne told me. 

A few ways you can reset your money mindset are:

• Using positive affirmations around money (and putting them everywhere!)

• Learning to give money away without fear

• Evaluating your beliefs around money 

• Actively fighting off any negative thoughts about money

• Fostering gratitude in every transaction

3. Cultivate Healthy Money Habits

Creating a strong budget and resetting your mindset creates a strong foundation for making good financial decisions, but keeping up with those good financial decisions means you have to cultivate healthy money habits too. Some healthy money habits that could help keep your budget on track are:

• Downloading a money-tracking app like Mint

• Spending with gratitude, not fear by using affirmations like, “I am grateful for all that money brings me,” or “I am grateful that I can contribute my money to the economy/this cause/this person,” when spending money

• Setting financial goals each quarter

• Waiting 24 hours before buying “wants” to avoid impulse purchases

• Saving 20% of your income for the unexpected

Yvonne is a big proponent of saving, especially when you have a variable income. “If you happen to have a short month one month and not bring in as much as you need then hopefully you’ll have that extra savings already set aside,” she shared. “That way, that can come in to fill the gap for that month, and then you’ll just work harder next month to bring in more money.”

4. Re-Evaluate Your Budget Each Month

If you have a variable income it is best to evaluate your budget pretty frequently. By re-evaluating your budget more often, you’ll have a better handle on your money as your income changes.

Since I can usually predict my income for the next few months, I tend to re-evaluate my budget each quarter, but monthly works great too. Here’s the method I use: first, I calculate how much I’ll be making over the next three months. Then, I divide that up to give myself a general monthly budget. Finally, I calculate all of those personal and business needs we talked about earlier. 

Next, I subtract my needs from my income and I use that final number as my budget for the month. I’ll usually take out a percentage for savings, but the rest I let myself spend freely. Some people prefer to take their savings directly out of their income, but it makes me feel better knowing everything else is taken care of first. This works well for me because on good months I can splurge on certain items, whereas on not-so-good months I have to reign myself in a little bit. But either way, it gives me a concrete number to focus on each month. 

There are hundreds of ways to budget your money, but the best budget is the budget that works best for you. I tried a lot of budgeting methods before I found one that really worked for me, so don’t get discouraged if you struggle a little bit. For me, once I changed my mindset around money everything changed, so I would definitely suggest digging into your own stories around money before getting started. Happy money-making!

“There are hundreds of ways to budget your money, but the best budget is the budget that works best for you.”

—Calli Zarpas, Founder of the Do Well Department

About the Author: Calli Zarpas is the founder of the Do Well Department, a holistic business program created to help overwhelmed business owners cultivate a business and life they love. When Calli isn’t running her community, she’s writing her weekly newsletter and hosting her podcast called Unstrictly Business, all about how successful business owners foster success in both their business and personal lives (Yvonne’s episode is an awesome place to start!).

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Eunice Byun Started Material as a Side Hustle While Working 9-to-5 at Revlon—Here’s How She Did It

You asked for more content around business finances, so we’re delivering. Welcome to Money Matters where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.

Photo: Kirsten Francis

Eunice Byun launched her cookware company Material as a side hustle while she was working full-time as an exec at Revlon. But she knew she had to quit her day job when she kept waking up with new ideas for Material and couldn’t shake that feeling of “I’ll pinch myself later on if I don’t just do this now,” she tells Create & Cultivate. “It did help not having to worry about how I would financially make it by ironing out a lot of the vision for the business on nights and weekends, while still getting paid for my full-time job,” she adds about the decision of launching a business while working from 9-to-5.

Although the slow-and-steady approach was right for her, the entrepreneur admits it’s not for everyone. “If you’re the type of person who needs to jump in feet first and throw everything you’ve got at the business, then my approach might have been too cautious,” she says. “For me, I needed some assurance that what my co-founder and I were dreaming up was compelling enough that we could secure funding so that we could build the product and our brand right from the start.” And it’s safe to say that strategy has more than paid off. In fact, she had a number of investors who were interested in working with her before she even had a product (no big deal!).

Ahead, Byun explains what it took to launch a business while working full-time, how she secured funding before producing a single product, and why it’s important for founders to be compensated, regardless of the actual dollar amount printed on the paycheck. 

Your résumé is so impressive. You started your career in finance as an analyst at Goldman Sachs and later served as vice president of global digital marketing at Revlon. Can you tell us about your professional background and what you were doing professionally before launching Material? 

I’ve been fortunate enough to have had a pretty diverse career to date. After graduating from Northwestern University, I went into finance at Goldman Sachs. It’s a great place to start your career because you learn a lot of transferable skills—presenting information, time management, people management—at an early age. Ultimately, I knew that I couldn’t see myself in finance long-term and wanted to move into something more consumer-focused. 

From there, I spent the next chapter of my professional life in the consumer and start-up worlds, soaking up as much operational knowledge as possible. I learned about forecasting, merchandising, managing a P&L, operations, PR, and communications. Although I didn’t know it at the time, I was accumulating bits and pieces of know-how that would serve me well with my own company, Material.

Right before launching Material, I was in the beauty industry, deep in digital storytelling, community building, and influencer-focused marketing, much of which has informed our current marketing strategies. 

What was the “lightbulb moment” for Material? What inspired you to start your business and pursue this path? Did you always envision yourself becoming an entrepreneur?

I was that kid growing up who never knew how to answer the question, “What do you want to be when you grow up?” As I got older, I eventually realized it came down to surrounding myself with talented, driven people (who I could learn from), and building something that people cared about. That rubric served me pretty well as I navigated through a few different industries. 

But it wasn’t until I had my daughter that I realized there had to be something more. I wanted a place where I didn’t have to leave parts of myself at home, especially as a new mom. When my co-founder and I started piecing together the concept of Material, we envisioned the idea of our company but also the type of place and people we wanted to spend our time in and with. We felt there was a need for our company to exist (e.g. to bring more beautiful, high-performing designs to the home cook), but we also knew we wanted to build a company with values that matter and motivate us and our team. 

You had a number of investors that were interested in working with you before you even had a product. What were some of the challenges you faced in raising funding pre-product and what would you change? Would you recommend your route to other entrepreneurs? 

Product is central to our business, as we aren’t a one-product-shop where we focus solely on a singular item. In our case, we launched with a collection of seven items, so raising a pre-seed round was necessary in order to deliver the quality of products we envisioned. However, we made sure not to take too much money from the beginning as we didn’t want to automatically put us on the hamster wheel of raising more and more capital as quickly as possible. We also were specific on having a diverse set of initial investors, which proved to be one of our best decisions. With a mix of venture, angel investors, and houseware industry experts, we’ve received different opinions and guidance which has allowed us to chart a growth plan for Material that feels more dimensional and sustainable.

What was your first big expense as a business owner and how should small business owners prepare for that now?

Public relations and communications. We invested right from the start in a top-notch, start-up-focused PR partner. The way we saw it was we only had one company launch moment, where we could come out and tell the world who we were and what we are about, so we wanted to make that moment count. What we’ve found is that many of those press hits quickly got our name out and generated buzz, but longer-term populated our branded search results and filled the pages with articles. These still pay off for us years later. 

What are your top three largest expenses every month?

Payroll, fulfillment, and platform-related costs (e.g. processing fees and hosting). We used to spend a lot more on top-of-the-funnel marketing but have found that our lower-cost acquisition tactics are more effective and produce more loyal, long-term customers.

Do you pay yourself, and if so, how did you know what to pay yourself? 

Yes. One of our early investors advised us from the start to pay ourselves what we needed to focus on the company, and not how we’d make ends meet. That being said, my co-founder and I believe in hiring the best talent we can so we allocate our funds to the team (meaning we make less than other team members).

Would you recommend other small business owners pay themselves? 

Yes. It’s important to feel compensated for the work being put into the company, regardless of how much that dollar amount actually is. 

Photo: Kirsten Francis

How did you know you were ready to hire and what advice can you share on preparing for this stage of your business? 

An angel investor of ours broke this down for me once. He said there are two buckets of hires: superchargers and doers. You need both and you’ll eventually hire for both. 

Superchargers are those that you bring in slightly earlier than needed—and might overpay for at the time—but they are meant to exponentially grow your business. They might have done it before elsewhere or they have some experience that will immediately add value. 

Then there are the doers, where you hire them when you’re essentially past the breaking point. They help make processes move more efficiently or allow you to go faster, but you can afford to drop some balls here and there and not have it affect the business in a significant way. This ensures you aren’t building up a team too quickly and spending too much before it’s needed. 

What are some of the tools you use to stay on top of your business financials? What do you recommend for small business owners on a budget?

Excel. My co-founder and I look at spreadsheets daily as things are shifting quite regularly. We also have an outsourced CFO who we can tap into with more specific questions or analyses, as we’re not quite at the place where we need that skillset full-time.  

Do you have a financial mentor? Do you think all business owners need one?

I have different people whose opinions I seek out on various financial matters. I like speaking with other operators and founders about budgets because while investors may have a POV, I want people who are sitting with spreadsheets and making hard decisions on where you can spend your money and where you can’t. For fundraising matters, I like speaking to a number of people—not just one—because there’s more than just one path forward on how you finance your company. 

What money mistakes have you made and learned from along the way?

Inventory can help and hurt you. Too much, and you’re stuck. Too little, and you can’t grow fast enough. We recently invested in an inventory management system to help us work through these growing pains, as we try to be as capital efficient as possible and not have too much tied up and sitting in a warehouse.

Where do you think is the most important area for a business owner to focus their financial energy and why?

Know your pathway to profitability. There used to be an overabundance of focus on top-line growth, no matter the costs. Nowadays, the focus has shifted towards profitability which is important because it means you have greater control over your financial future if you don’t always have to rely on bringing in funding. 

Do you think women should talk about money and business more?

Yes! The number of times I’ve walked into a meeting where a potential investor focuses marketing questions to me and financial questions to my male co-founder have been absurd. The fact that my gender leads one to believe that I may not know much about my company’s financials is an antiquated perspective. ANY business owner should be well-versed in how their company will grow and what it’ll take to do so.

You’re a mom and a co-founder/CEO! How has being a mother changed your priorities and your focus in terms of your career? Do you think motherhood has made you a better business person? 

It deepens my reasons for why I do what I do. Having my daughters see that they too can write their own narrative and build something of substantial value is important to me. 

What is your best piece of financial advice for new entrepreneurs?

Get comfortable with it and don’t let someone else take the reins because they “know more about finances than you.” Your financial statements are simply a different way of telling your company’s growth story.

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How My Experience as an Investor Prepared Me to Be a Founder

Photo: Courtesy of Naomi Shah

It’s difficult to think of anything in my life that has required a wider or more dynamic skill set than founding and running a company. Unlike the way founding is sometimes described in pop culture and media, you can’t just have great ideas for products and services. You have to be capable of building a healthy company culture, understand how markets evolve, and anticipate what consumers will want in the future. Personally, the last year and a half have honed a higher tolerance for uncertainty, an irrepressible curiosity about our market and users, and the ability to communicate exactly what the company is trying to achieve to inspire all of our people. 

While there’s nothing quite like running a start-up, I’m grateful that I had an opportunity to work at a venture capital firm before taking the helm of my company Meet Cute. Because VCs work directly with founders every day, they need to be capable of seeing the world from a founder’s perspective, which means identifying gaps in the market, crafting the right narratives about promising companies and ideas, gathering a lot of information from disparate sources, and making informed decisions in the face of incredible uncertainty. Due diligence is the central task for VCs, but they also have to be willing to take risks on the companies they believe in. 

Investors and founders are on the same team. The best partnerships are often described as a marriage. That analogy rings true especially because of the ups and downs of founding over the years, which requires an intense trust in the people you work with that they will be there when you need it. Aligning on the direction of the company, personnel, and emerging market opportunities is critical. Ahead, I’m sharing some of the many lessons I learned as an investor that have also served me well as a founder.

Lesson #1: It all starts with curiosity.

Successful VCs are always on the lookout for companies that capture and hold their interest and users’ trust. Founders should want to work with investors who have thoughtful questions about their products and services, understand their industry, think differently, and believe in the founding team. It isn’t just a matter of cutting a check and hoping for a quick return. In turn, VCs should add value by thinking creatively about what the market will look like in the future and advising the company. I learned from shadowing partners at USV that the best VCs were also the best listeners, and think of VC as a service industry. 

This starts with genuine curiosity about what a company does and what impact it could have on the world with the right guidance and resources. The average holding period for VC investors is eight years. This is a reminder that investors need to be mission-aligned as they will work with companies over the long term and are investing in the sustainable success of their portfolio companies. 

VCs and founders should establish open lines of communication right at the outset. I’ve never been afraid to ask questions or contact experts who know more than I do about a subject, and these skills served me well as an investor and a CEO. 

When I was at the VC firm, the best way to learn about early-stage companies was to work directly with them on forecasting, marketing strategy, fundraising, and other issues and consult with experts outside of the company to bring new perspectives to the table. The same collaborative mentality is an essential part of the culture at Meet Cute today. If we need to talk to an expert about something specific, we are not shy about asking and learning. Time and time again, smart people in the industry who we look up to make time for those who are genuinely curious. 

Lesson #2: Make the best decision possible with incomplete information.

Early-stage investing offers unique benefits, such as the ability to identify innovative companies before other investors, help steer those companies in a positive direction, and ultimately secure more growth over time for taking on a much larger risk. These are all reasons why it’s no surprise that early-stage VC investments have surged over the past decade from $14 billion in 2011 to just over $47 billion in 2019. Early-stage investing is on pace to set a record this year. The first quarter alone saw greater deal value than the entire year in 2011.  

Early-stage investing also comes with quite a few obstacles, and a lack of information is one of the biggest. Early-stage investors don’t have as much data about a company’s growth, operational efficiency, etc., so many of their decisions are based on pattern recognition and intuition. The founders of early-stage companies face similar constraints. There’s no playbook for what many of these companies are doing, so we have to be comfortable making decisions with limited information. Just as investors need to accept the fact that they will sometimes make the wrong call, founders should be willing to fail. If everything is going too smoothly, you should ask yourself if you’re scaling ambitiously enough. 

All of that said, founders and VCs should be as fastidious as possible in their research. Due diligence as a core focus means putting in the time to learn and develop opinions and perspectives. But due diligence always has to be placed in the context of the realistic constraints you face, especially in building something completely new, and knowing what level of risk you’re willing to tolerate. 

Lesson #3: Always tell your story

A company’s story is integral to its identity, and it serves as one of the most effective ways to reach your audience and let them trust our brand, galvanize employees around a common message, and attract the best investors. As an investor, I frequently told stories about innovative companies to convince my colleagues that we should back them, often in the form of an investment memo or a short and sweet presentation in a team meeting. I also helped start-ups craft their stories when they launched fundraising rounds or needed to prepare for board updates. Storytelling is the most powerful tool we have as humans and we know that the emotions of a story are remembered far better than facts.  

Moreover, I’ve realized how sharing your story internally is vital to improving morale and helping employees rally around a consistent set of values and objectives. Gallup reports that only 27 percent of employees strongly believe in their company’s values, while less than half say they strongly agree that they understand what the company stands for or what sets it apart. By telling the company story and vision often and consistently, the team can rally around what they’re working toward and why it matters. 

Reflecting on the last year, there is a significant overlap between my experiences as an investor and a founder. By making a conscious effort to understand how my experiences tie into and bolster one another, I hope that I can show where founders and the VC firms that support them can build stronger relationships and thereby more unique and impactful products in the world. 

Photo: Courtesy of Naomi Shah

About the author: Naomi Shah is the founder and CEO of Meet Cute, a venture-backed media company that has produced over 300 original light-hearted romantic comedies in podcast form. The company celebrates human connection and the full spectrum of love with the core mission of having every person feel like they are reflected in Meet Cute stories. Since its inception in February 2020, the podcast has had over two million listens across over 150 countries and has been featured in the top 10 of Fiction on Apple Podcasts and Spotify. 

Before starting Meet Cute, she was a member of the investment team at Union Square Ventures, a technology venture capital firm in New York, where she spent most of her time talking to companies in the consumer and well-being space. Prior to that, she was a macro equities trader at Goldman Sachs and studied mechanical engineering and human biology at Stanford University.

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This Former Scuba Diving Instructor Is Reducing Single-Use Plastic Waste, One Beeswax Wrap at a Time

You asked for more content around business finances, so we’re delivering. Welcome to Money Matters where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.

Photo: Pink Palm Media; Courtesy of Evan Guiton

Before Evan Guiton started Bee Kind, she was on a very different career path. “I was working as a scuba diving instructor on the Great Barrier Reef in Australia, and all I wanted was to spend as much time as possible hanging out with humpback whales,” she tells Create & Cultivate. But she couldn’t ignore the devastating effects of plastic pollution on the ocean. “As someone who was spending significant time underneath the water, I had a front-row seat to the suffering and destruction ocean plastic pollution was causing,” she explains. “Every single dive I went on I would encounter a fish or marine animal who was having some sort of interaction with a piece of plastic.”

After a while, it became hard for her to reconcile enjoying the ocean without being a part of the solution, which is how the idea to launch a business that reduces single-use plastic, came about. “I wanted to educate people about the seriousness of the problem and empower my community to become more sustainable in their everyday lives,” says Guiton. “By creating trendy, accessible, and affordable products that could replace everyday plastics, I knew I could bring zero-waste into the mainstream,” she explains of the concept behind Bee Kind. “Shortly after this revelation, I quit my job as a dive instructor and flew home to Canada to begin working on my first beeswax wrap prototype.”

Here, Guiton explains why she decided to bootstrap her business, shares the money mistakes she’s made along the way, and offers her best advice for entrepreneurs.

How did you fund Bee Kind? What were the challenges and what would you change? Would you recommend your route to other entrepreneurs? 

I bootstrapped Bee Kind from the ground up, which means I never took any funding or investment. In the beginning, I spent a few thousand of my own dollars fleshing out a website, a logo, production supplies, and raw materials. I was lucky enough that I was able to make a profit almost instantly through local craft markets which encouraged slow but steady momentum forwards without digging much further into my own wallet.

While I am grateful I did it this way (as now I am happy to say I still own 100% of the business), it was a financial balancing act for many years. Without funding, I had to completely rely on company profits to slowly grow, in addition to being hyper-specific when it came to forecasting the purchase of raw materials. When you make these bulk purchases, your money is tied up in these raw materials for approximately four months before you begin to turn it around in sales of finished products. Knowing this, I had to be incredibly accurate when forecasting our growth.

What was your first big expense as a business owner and how should small business owners prepare for that now?

The first time I purchased our custom printed fabric I was horrified to learn about MOQs and the amount of customized product I would have to commit to upfront. I had very limited dollars to play with at the beginning, so I had to make compromises in what we could afford while still ensuring we created a really special product. 

I recommend that business owners do A LOT of digging into any big purchases they are about to make. Is there a better deal out there? Are you absolutely sure that you need to spend money on this? Is there a better (or just different) way to achieve the same result? The more you can think outside the box in growing your business, the more you can help your bottom line. There are a million ways to achieve the same result, so don’t feel like you are cornered into throwing money at a problem. 

Photo: Courtesy of Bee Kind

What are your top three largest expenses every month?

Payroll, raw materials, and our photographer on retainer /social media content creators.

Do you pay yourself, and if so, how did you know what to pay yourself?

I’m four years into the business, and to this day I prefer to pay myself just enough to cover my bills and necessities. Putting as much money as I can back into the business so it can grow is my best investment. In all honesty, there came a point in time where all I wanted was a new production warehouse, and that meant infinitely more to me than having extra personal pocket money. The decision was that simple.

Would you recommend that other small business owners pay themselves? Why or why not?

I think business owners need to cover their bills and be comfortable so that they can mentally and creatively show up for their business every day. However, when they choose to start properly paying themselves completely depends on their personal situation. I think they also need to realize that putting money back into the company, in the beginning, could create much higher returns later on, and that might be worth it to them in the long run. 

How did you know you were ready to hire and what advice can you share on preparing for this stage of your business? 

For many small businesses, the founder is the accountant, the maker, the marketing specialist, the delivery person, and everything in between. While this was a stressful way to go about running a business, it was the only option financially for me for the first couple of years. I hired someone to help me make the beeswax wraps when I physically could not keep up anymore. Once I realized that hiring help was in fact not a financial burden, and instead, a fast track to growing the business, I was much more relaxed in adding more people to the team.

I knew that I had a lot on my plate as a business owner and that I absolutely did not want to add “becoming a manager to a team of people” to my to-do list. From the beginning, I clearly defined my employees’ roles as independent, self-starting, and with “choose their own schedules.” To this day, I have never written out a staff schedule and my team is there on any given day because they want to be, not because they have to. I wouldn’t have it any other way!

Photo: Courtesy of Bee Kind

Did you hire an accountant? Who helped you with the financial decisions and setup? 

If I had one piece of advice to small business owners it would be this: hire a bookkeeper from the beginning. You don’t need anything fancy, but where it comes to your books, you want a professional keeping them straight. When you get bigger, you can look at getting a CPA, but at the start, a budget bookkeeper is all you need. For too long, I thought I could do it myself on Quickbooks online, and it was a giant learning experience.

What tools or programs are you using to manage your business finances? What’s worked and what hasn’t?

Quickbooks online and a great filing cabinet system are what I swear by. What hasn’t worked? Going at it alone without an accountant.

Do you think women should talk about money and business more? Why or why not? 

Absolutely! As someone in charge of hiring new employees, I have often been in a position where I didn’t know what I should be offering in terms of compensation simply because no one likes to talk about what they get paid. If wages were talked about more casually, I think everyone would also become more ambitious in achieving salary milestones.

What money mistakes have you made and learned from along the way?

Every opportunity that involved us providing free (or almost free) product in exchange for “exposure” has been a hefty disappointment. In my humble opinion, the majority of companies that promise you exposure so that they can make money off you or your product should be approached with a great deal of caution. Put your time and efforts into organic engagement and creating genuine connections with your followers.

What is your best piece of financial advice for new entrepreneurs?

If you have a good idea and a blossoming business, you will get approached ALL the time for investment opportunities. If you’re thriving, people will want a piece. While this is incredibly flattering and exciting (especially at the beginning), the people you want on your team are not the ones asking for a piece of the pie during their first conversation with you.

Also, save money for a rainy day. Opportunities will come that you want to take advantage of which you need money for RIGHT NOW. Keeping a nest egg is an incredibly wise decision as it allows you to make big moves.

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How Samara Walker Launched Auda.B While Working Full-Time as a Senior Financial Analyst at Amazon

You asked for more content around business finances, so we’re delivering. Welcome to Money Matters where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.

Photo: Courtesy of Samara Walker

"Balancing a full-time job and a start-up is extremely demanding and requires a different level of patience, organization, and ability to challenge yourself," Samara Walker, the founder and CEO of the luxury vegan nail lacquer brand Àuda.B, tells Create & Cultivate. “Time is of the essence because every minute counts when you have to delegate between your 9-5 and your startup,” she explains. But Walker was more than up to the task of managing her minutes and balancing her full-time role as a senior financial analyst at Amazon with building her beauty start-up. And for good reason.

Walker launched Àuda.B because women of color aren’t often represented within luxury beauty. “Oftentimes, luxury beauty brands omit the celebration for women of color,” she explains. “I was truly inspired to launch Àuda.B to create a brand that reflected women of color from A-Z. Through product curation, branding, and marketing, I knew that I wanted to build an inclusive brand that kept women of color top of mind,” she adds. And major retailers have taken notice. Earlier this year, Àuda.B launched on Nordstrom, becoming the first Black-owned polish brand to be sold by the retailer.

Ahead, Walker shares when she knew it was time to quit her job at Amazon and go all-in on Àuda.B, what the biggest challenges in scaling her business have been so far, and how she’s pushing the beauty industry forward and making a difference.

You started Àuda.B while you were working full-time as a senior financial analyst at Amazon. Would you recommend starting a business while working a full-time job? 

As I reflect back, I would recommend starting a business while working full time because this allows you to put your passion and work ethic into perspective. Having a stable income allowed me to invest in my business by relying on my paycheck and helped me bootstrap my company to the next phase. Working a full-time job while starting a business put my life into perspective and really encouraged me to go after my dreams!

How did you know when it was time to quit your job at Amazon and go all-in on Àuda.B? What was your strategy for making the transition and what, if anything, do you wish you’d done differently? 

The day I signed my partnership agreement with Nordstrom, I knew I had to prepare myself to leave Amazon. As a small start-up, I had to manage and develop the supply chain strategy for the business and onboard new systems to become compliant with the retailer, which is no small undertaking. The demand for Àuda.B became overwhelming (in the best way!) between the influx in orders and the partnership with Nordstrom. I was tasked with the decision of pouring my energy into Àuda.B or Amazon, and the decision was not difficult at all. I had worked tirelessly for this day to come, and I was prepared to put all of my efforts into it! 

As a founder, I positioned myself from the very beginning to save aggressively because I knew that bootstrapping would allow me to have total control while building my company until we eventually secured an investor. I made strategic moves such as setting up direct deposit from my Amazon paycheck to the Àuda.B business account each pay period to build our business account for expenses and to budget for part-time contractor payments.

It's important to build out a real plan between personal and business expenses in order to set realistic expectations of what your savings should reflect to allow you to step away from your full-time job. Founders need financial security in order to operate from a healthy mindset—shelter and food shouldn't be optional. I wish I had the ability to establish this plan earlier on in my career, but I am thankful that I finally had the courage to fully step out and embrace the abundance of Àuda.B.

Photo: Courtesy of Àuda.B

Earlier this year, Àuda.B launched on Nordstrom, becoming the first Black-owned polish brand to be sold by the retailer. What has been the biggest challenge in scaling your business and what lessons have you learned along the way? What advice can you share on how to scale a business sustainably? 

The biggest challenge in scaling has been producing enough inventory to keep on-hand, as well as implementing systems to scale with limited cash. I've since learned how to prepare your business for the next phase and have strategies and plans in place to anticipate the arrival of growth. My advice would be to plan your business for the next phase before the growth actually impacts your company. Research potential partnerships to help scale, whether that's a 3PL or EDI system to manage your growth and scale effectively. 

How did you fund your business? What were the challenges and what would you change? Would you recommend your route to other entrepreneurs? 

I bootstrapped my business by funding through my full-time salary and personal savings. Some of the challenges I faced were not having enough cash on hand or the ability to order new inventory to keep up with customer demand. Managing expectations is important. Having a well-balanced inventory is essential to keep up with customers’ needs and demands. 

At first, we didn't have the ability to expand our color selection or significantly increase inventory without the guarantee of customer’s purchasing. I would change the way I handled inventory by ordering more to create a surplus for an unexpected increase in sales. I would highly recommend bootstrapping your business until funding is secured via an investor if that's the route you decide to take. Bootstrapping gives you the grace of building at your own pace and learning all aspects of your business from the ground up.

What was your first big expense as a business owner and how should small business owners prepare for that now? 

Our first big expense was hiring a lawyer in order to apply for our trademark. Small business owners should create a list and prepare for start-up costs that can be accomplished over time but are necessary for the business’s growth. Putting aside a few dollars that are dedicated solely to start-up costs will help prepare business owners for anticipated expenses. 

What are your top three largest expenses every month?

1. Part-time contractors

2. Monthly business systems: EDI and catalog systems for retailers

3. Influencer agency

Do you pay yourself, and if so, how did you know what to pay yourself?

I don't pay myself as of yet. 

Would you recommend other small business owners pay themselves? 

Depending on revenue and personal finances business owners should pay themselves. It's important that founders sustain themselves while building a business.

How did you know you were ready to hire and what advice can you share on preparing for this stage of your business? 

I knew that we were ready to hire when I couldn't meet due dates for deliverables and there was an increase in revenue which allowed us to dedicate additional income to part-time contractors. I didn't have the bandwidth to complete deliverables on time, which is a clear sign that additional help is necessary in order to scale.

What apps or software are you using for finances? Are there any tools or programs you recommend for bookkeeping? 

I personally use QuickBooks to manage our finances, which I would highly recommend. It also has a feature that allows you to manage and pay contract workers, so that way all of the information is synced and saved in one place.

Photo: Courtesy of Àuda.B

What are some of the tools you use to stay on top of your business financials? What do you recommend for small business owners on a budget? 

I set time aside both weekly and monthly to review our expenses and revenue. The weekly meetings are used to review expenses and log receipts. Monthly meetings are focused on reviewing P&L statements and detailing expenses for the month. I recommend that small business owners review their expenses and create a quarterly budget in order to efficiently manage cash flow. 

Where do you think is the most important area for a business owner to focus their financial energy on and why? 

Decreasing expenses upfront and being “lean”. It’s important to focus on increasing revenue without having to increase expenses.

Do you think women should talk about money and business more? 

Absolutely, I believe women should talk about money and business more. Only 2.4% of venture capital funding goes to women, according to CrunchBase. There is clearly a gap within the industry due to the lack of support and knowledge for women business owners. It’s vital that we share information with one another to encourage women despite the many hurdles we may face.

What money mistakes have you made and learned from along the way? 

Paying for expensive tradeshows without building a strategy and being under the impression that sales would cover expenses. Tradeshows are very expensive, and it’s not just the booth rent. There are a lot of hidden costs on the logistics side for both the business and the tradeshow. I've learned that market research and case studies can come in handy when evaluating new business opportunities. 

What is your best piece of financial advice for new entrepreneurs? 

Build personal savings before starting your business, if possible. Create a budget from the beginning and start using personal funds to save for the desired budgets if your revenue doesn’t cover expenses. Keep all logistics in-house until your business has scaled!

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How to Perfect Your Pitch and Attract Investors with Venture Capitalist Visionary Arlan Hamilton

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In 2020, venture capital funding boomed—but women’s share shrank. Startups, overall, raised 13% more from venture capitalists in 2020 than in 2019, but female-founded companies raised a staggering $190M less in 2020 than in 2019.

As the founder and managing partner of Backstage Capital, Arlan Hamilton aims to turn these discouraging stats around. Her mission is to minimize venture capital funding disparities by investing in minority founders.

Since she founded the firm in 2015, Backstage Capital has raised more than $15 million (!) and invested in more than 180 startup companies. 

At our recent Money Moves Digital Summit, Salah Goss, SVP of Center for Inclusive Growth at Mastercard, sat down with Arlan to chat with her about her incredible career and gain her insights into how entrepreneurs can perfect their pitch, attract investors, and raise money for their businesses.

ICYMI, we’re sharing a few of the highlights from the conversation below.

Let’s start at the beginning – you have a very untraditional background compared to the traditional VC world–how did you break into the industry and set yourself up for success?

I think what actually helped me break into the industry was the fact that I was different. I'm a woman, a person of color, LGBTQ, I lived in Texas at the time, outside of the major markets, I did not go to college, I didn't have any sort of formal financial education, I did not have any contacts in Silicon Valley––and the list goes on and on. Often, I think the qualities that make us special or different that help us find success, but it takes curiosity and strength to actually lean into them.

I was interested in starting my own company at the time and excited about the prospect of fundraising until I came across some staggering statistics, including the fact that 90% of venture funding goes to white men. Demographically speaking, that means 90% of venture funding goes to a third of the country. It didn’t make sense to me. I began to ask, what if there were funds that did the opposite? 

Over the next three and a half years, I had the patience to talk to people–founders, investors, etc. I received as many ‘no’s’ as one human can get in a lifetime but I kept digging into that question, ‘what if’? I began investing in women, people of color and LGBTQ because that's what I knew. Over time, we've expanded our reach, but there are millions and millions of potential people in this demographic alone.

How do you choose which businesses to fund? What do you look for in a business and/or an entrepreneur?

It's a bit of a moving target because I feel that I continue to evolve as a persona and as an investor, but the one thing that has remained the same–from the time I was homeless and on food stamps and had no money to invest, to investing in almost 200 companies later–is this spark when I look across the table and see someone who reminds me of myself. I look for an entrepreneur who is what I call hungry not thirsty: there’s a passion without desperation. 

As far as the companies and ideas themselves go, if it's something that would take me a decade or more to even hope to accomplish then you have my attention.

It’s safe to say you have been privy to a lot of pitches and pitch decks—What are three crucial elements everyone should include in a pitch deck when raising money and why? 

1. This may be different for different people, and it will be different for different investors. For me personally, it really comes down to authenticity. You do not have to be an extrovert or try to entertain me. It's not necessarily about having a talent for being an entertainer, but rather a combination of pragmatic and passionate, and being able to articulate their story in a way that allows me to dream with them. As Katy Perry says, the best storyteller wins.

2. I speak with thousands of companies and receive thousands of pitch decks a year. I better not know more about your company than you do–or about your competition. Before you go out and ask other people to invest in you, you better invest in yourself and look for the answers in all the different ways that you can. Learn and talk to your peers and talk to people who have been there before you. Talk to the CEOs of fortune 500 companies and find mentorship through other people who are maybe slightly ahead of you in the game or through people who are doing this all with you. There's something that they figured out, or that they learned, or that they heard about that can help you––and you’ll probably help them too!

3. I understand that for some, it’s not only pitching a business, it’s their livelihood. But when I continue to ask someone more questions, it means I’m interested, even if the questions are tough. Sometimes people will shut down, get defensive, or quick to end the conversation when they feel it’s too much work to find the answers. Remember that you're also asking people for tens of thousands, hundreds of thousands, maybe millions of dollars, so that's going to be part of the process and you have to be prepared to put in the work. 

Black women are among the fastest-growing entrepreneurs in the U.S.—yet they only receive a fraction of venture capital funding. How can we turn this statistic around and ensure the small business community is actually representative of society as a whole?

That’s a lot of what we're doing at Backstage and hopefully we’re one of many. It has to start with a global conversation and understanding that when companies are backing black women, they're also backing a progressive infrastructure, they're backing healthcare, they're backing all sorts of innovation. It’s not just what the country can do for black women to repair damages, it's also what black women are going to do for the country–and what they have been doing.

5 of Your Most Pressing Money Questions–Answered

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COVID has shown us how quickly unexpected events can throw our plans off course. Now, more than ever, it’s important to plan ahead–especially when it comes to your finances. Whether you're bootstrapping your business, setting up your retirement fund, or simply learning the financial basics, it pays to pay yourself forward. Investing in your future will pay back dividends. 

To help you master your own financial future, we teamed up with Ally for our recent Money Moves digital summit to host a mentor power-hour with five financial experts to answer your most pressing money questions.

In case you missed it, we’re sharing a few of the Q&As from our Money Moves mentor session. Read on for some sage financial advice from our five mentors who know quite a bit about the importance of investing in yourself, your business, and your financial future.

Jack Howard serves as the Senior Director of Wealth Advisors Operations for Ally Invest.  In this role she manages the day-to-day operational processes of the Wealth Advisor business.  She is also responsible for the Ally Invest Inclusive Wealth strategy that is part of the Ally enterprise Financial Social Inclusion (FSI) efforts and serves as secretary for the Ally Charitable Foundation. Prior to joining Ally Invest, Jack served as Senior Director of Ally Corporate Citizenship.  She was responsible for the creation and execution of strategic programs for the organization’s financial literacy program, corporate giving initiatives and employee giving/volunteerism programs. 

Jack graduated from Michigan State University with a Bachelor of Arts degree in Journalism and is currently a student in Syracuse University’s Master of Science in Communications Management program. An active professional, Jacqueline is a member of Alpha Kappa Alpha Sorority, Inc. and Jack and Jill of America, Inc. She also serves on the national board of directors for the American Bankers Association Foundation and Society for Financial Education and Professional Development (SFEPD), as well as the Boys and Girls Club of SE Michigan.

Jacqueline has a deep passion for helping Brown and Black communities build wealth through economic mobility. Her work has earned her a spot as one of the 15 women on the inaugural Next list - an extension of the American Banker Most Powerful Women in Banking program.

Q: Investing can be intimidating–what advice do you have for someone who’s new to investing and doesn’t know where to start. How do I overcome the intimidation factor?

JACQUELINE: As a first-generation stock investor, I know what it feels like to be paralyzed with fear because you don’t know what to do first. I am the daughter of a police officer and teacher who had pensions to fund retirement, so the stock market was not a topic of discussion at my dinner table during childhood. After graduating from college, I realized the importance of owning stocks as a piece of my wealth building strategy. I started small and made a $25 contribution to the 401K provided by my employer. As my salary increased, I contributed more, hired a financial advisor, and opened a Roth IRA account.  I also worked hard to eliminate credit card and student loan debt.  Over time, I became obsessed with understanding money and wealth building.  Now, I am constantly listening to audio books and podcasts, watching CNBC or reading the Wall Street Journal and Barron’s.  All of those efforts helped me to better understand money and investing.  So, my top tips for new investors: start small, automate the process and make a commitment to learning.

Allyson Byrd is also known as the “Profit Accelerator™ and she is celebrated as one of the world's most trusted leadership advisors and sales experts for entrepreneurs and small business owners. Today, her and her team executive produce exclusive virtual membership communities for influencers with online audiences over 1 million in reach. Allyson’s clients generate a collective $33 million-plus in sales revenue annually. She and her team have coached 7500 entrepreneurial leaders to create $260 MILLION in NEW revenue over the past 9-years. You’ll be able to hear more of Allyson’s journey to success from an underprivileged life on food stamps, a dad in prison and single mom raising two kids to the ultra-passionate successful leader she is today and the undeniable stand she has for women rising into their greatness in her latest collaboration with Amazon Prime TV. Allyson’s press features include CNN, USA Today, NPR, Time Money, Forbes, Yahoo Finance, Business Insider, CNBC, MSN, Black Enterprise, Essence and Entrepreneur.com.

Q: If this last year taught us anything, it was the importance of planning for the unexpected. As a small business owner, how can I be better prepared financially for emergencies?

ALLYSON: The last year taught us many lessons and brought significant stress to women business leaders all over the world. We found ourselves questioning how to properly position our services, pivot our product lines and staff our teams amidst a global pandemic and a world-wide racial reckoning. This was not easy, but we survived. 

There are (3) things that I shared with our clients averaging $250,000+ annually to keep them on track and committed to success. 

1. When money stress hits, do NOT discuss the stress. Focus on the pivot. Ask yourself, “What is my lowest hanging fruit to sell and position to the market?” Your job is to sell with intention, sell fast and secure your cash flow.

2. Get LOUDER in your marketplace. Our tendency when stress hits is to go quiet and enter protective mode. Choose from a place of power and connect with your audience like never before. Do the things others aren’t doing so you can curate success for your business in ways others are not. 

3. Finally, as the business leader–center yourself. Know your numbers, meet with your accounting team (bookkeeper, accountant, heck… this may be you having a meeting with you) but whatever you do, don’t hide behind your numbers, stand on them. Have a clear picture of where you are so you know where you’re taking the business. 

Financial stress can cause us to take our mind off our business goals, slide away from leading with discipline and throw us quickly into a state of overwhelm and fear. 

Use affirmations like the one below to kick off your breathwork or meditation because if you’re riddled with anxieties and high-stress emotions, your business and your bottom line will soon follow.

REPEAT AFTER ME: I am a vibrational match for financial prosperity because I choose to only allow massive well-being. I stay in the place of already receiving monetary abundance from all sources that are for my highest good and greatest joy.

Stay the course. It’s the ebb and flow of business and keeping your mind centered, your energies focused and your intentions clear will get you through the storm and back into the sunlight of your success. 

Britney “Jeanine” Canidate is the owner and founder of Britney Jeanine & Co., a business coaching firm based in the heart of Atlanta, Georgia. Serving as the head Business Coach and Pivot Strategist, Britney believes that every entrepreneur should build a business they are most passionate about—even if it means slapping fear in the face and pivoting accordingly. Wife, mom of 2 and a business owner for over thirteen years, Britney has established herself as an industry leading business and brand strategist, and has supported clients across a multitude of industries. From corporate executives, high-ranking government officials and thousands of creative entrepreneurs, Britney has intently positioned her expertise in order to build a business focused on greater results, revenue and retention. Known for her spunky-tough-love approach, creativity, strategic mind and attention to detail, Britney is a proud graduate of Georgetown University where she received her Masters in Public Relations & Corporate Communications, and a Florida State Seminole with a background in Finance & Marketing. Using her signature system, you can find Britney working with experienced [yet transitioning entrepreneurs] who are ready to confidently plan their pivot without compromising their coins and credibility.

Q: I am currently working full-time for an employer but I plan to launch my own business soon–where is the most important area for me to focus my financial energy right now in order to take the leap?

BRITNEY: What a great question... and it's awesome that you're starting to think of this now. A mistake I often find those starting new businesses make is: investing based on what others are doing, and not based upon their OWN goals/needs.

So here is my advice:

• First define your brand by outlining your what, why, how, who and who not.

• Then focus on the who and determine how you can solve their problem(s).

• Now that you have the solution to their problem(s), package it up... is it a product, service and/or program...

• Now it's time to launch it into the world... who are the key people that can help you make this happen?

So to answer your initial question... your financial energy will go into "the key people that can help you make [your launch] happen".

 Maybe it's inventory samples? Maybe it's a business coach? Perhaps it's a brand designer or operations strategist... but the question still remains—who are the key people that can help you make the launch of your new business happen? Start there.

Alaina is an accountant, certified financial coach, author, and content creator. She helps busy people who struggle with budgeting and time management use a paper planner to get organized. She shares her easy approach to productivity & finances through her YouTube channel and has amassed over 75,000 subscribers and 3.5 million views on the platform. Her work has been featured in Yahoo Finance, Martha Stewart Living, Wired, The New York Weekly, The Huffington Post, and she was recently selected as one of LA Wire's 40 under 40. Alaina lives in New Orleans, Louisiana with her husband Torrey and their two daughters Tori Michelle and Alyssa Jade.

Q: I’m reevaluating how I split up my finances in the wake of 2020. How much cash should I keep in my savings and checking account?

ALAINA: Here is how I break down cash in my accounts:

Checking Account: I keep a small cushion in this account (no more than $200 - $500) just to cover any unexpected expenses from my daily spending. I don't like to keep more than that just in case my debit card is compromised.

Short Term Savings Account: With my short-term savings account, I am keeping money for any repairs or things that don't happen every month (like birthdays). In this account I keep one month of expenses. 

Long Term Savings Account: This is my emergency fund. I would keep 3 - 6 months of expenses in this account in case you may lose your job. If you have a very secure job or you can get a new job very easily, I would keep 3 months, however if you are self-employed or your job is unstable, I would keep 6 months of expenses.

Savvy Girl Money is a financial platform created to inspire women to reach their financial goals.

Q: I’m saving up to buy a home, but I’m worried that my credit score is too low. How can I increase my credit score and maintain it?

ASHIRA: The best way to increase and maintain your credit score is to start paying all your bills on time. A late payment can have a substantial effect on your score.

You want to keep your credit card utilization ratio under 30%. Your credit card utilization ratio is calculated by dividing your credit card balance by the total credit card limit. Make sure each individual credit card utilization is under 30%. Credit utilization makes up roughly 30% of your credit score, this makes it one of the most important factors in increasing or maintain your credit score.

You could also dispute negative or inaccurate items reported on your credit report. The best option is to write a letter to the three credit bureaus explaining why the information is inaccurate and provide evidence. Make sure to mail the letter certified mail with return-receipt requested as proof you sent the letter.

Why Adopting This Simple Money Mindset Could Change Your Life

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“Did I really just do that?”

That was my immediate thought after hiring my first business coach a little more than a year ago. It was the most money that I’ve ever spent on myself—$7,000 to be exact—and honestly, the most money I had spent on anything in my life.

Putting that amount down was scary beyond belief. I thought I was crazy, but I was also done playing small. I was done thinking that I or my vision wasn’t worth it. I was done having a money mindset that dollar bills were scarce and hard to earn.

And I knew deep down that to get a return, I would need to invest. In myself. Pretty big jump considering that at the time I felt hesitant to spend $35 on a workshop. But this is what I realized: money is meant to be in a healthy cycle of giving and receiving, making and spending.

If one part of that cycle is blocked, like when you try not to spend money at all or don't ask for what you're worth, the whole cycle gets thrown off and creates a clogged financial situation that feels strained and uncertain. Maybe you’re good at spending money, but if you feel guilty about it, it blocks the flow just as much. Spending and investing your money should feel good. 

So here’s a thought that can turn things around…

"There's always more where that came from."

This mindset reminds me that whatever I spend or invest comes back to me in some way. If I end up paying more on a dinner bill split among friends, I’m convinced it'll come back to me in some way. If I invest in an online course, I believe a return will come back to me in some way.

But without some sort of initial investment, there can’t be a return. And if all or most of your money is going towards rent, food, and Ubers, with little to no personal development expenses, you’re missing out on one of the biggest ways you can change your life. 

As a life and business coach, I've worked with dozens of women who, at first, had a strong resistance to spending money on themselves, and here’s what one of them has to say about this:

“Working with my coach has confirmed that I am worth investing in financially, emotionally, and spiritually. I’m worth that investment, and because I’ve decided that I’m worth it, I’m reaping the benefits, and that investment is being returned to me in the form of clients, improved relationships, and a better version of myself.”

So, if spending money on yourself feels selfish or indulgent, ask yourself these questions: 

1. Are the financial decisions I’m making right now leading towards the most fulfilled version of myself? 

2. Are they helping me reach my biggest goals and dreams?

3. Are they amplifying my impact in the world along with my quality of life?

If you answered no to some or all of these questions, what could you invest in to help you grow and develop financially, emotionally, or physically? Maybe it’s by investing in the online therapy you’ve been thinking of, your own business coach, or a personal trainer that you’ve been dying to work with. 

If at least a portion of your disposable income goes towards those types of expenses, then you’re bound to have a more fulfilling life. So don’t hold yourself back by not investing in the things that’ll help you grow.

It’s not self-indulgence. It’s self-investment, which is arguably the best expense on your bank statement.

About the Author: Kimberly Lucht is a life and business coach who helps female entrepreneurs make their dream business a reality. Degree-trained in psychology, Kimberly has previously directed and grown start-ups that help women blast through limitations and go after their dreams. As a life coach now, she has helped dozens of women massively increase their income, productivity, and overall fulfillment in life through in-person workshops, online programs, and one-on-one coaching. Kimberly has been featured in Money.com, Thrive Global, along with a variety of other media outlets and she currently lives in New York City.

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This story was originally published on September 13, 2019, and has since been updated.

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Don't Live Paycheck to Paycheck—This Is How to Save Money in Your 20s

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A lot of people in their 20s are dealing with large amounts of student loans and credit card debt and living paycheck to paycheck, dreaming of days when they can begin to use their money to reach their financial goals. While it's easy to that think financial planning at this stage in your life is pointless, the truth is there are some basic strategies you can implement, regardless of how much debt you have or how much income you’re earning.

Learning these strategies will help set up the financial foundation you need to move through this challenging time in your life and set the stage for a strong financial future. Read on for eight simple steps to get out of that paycheck-to-paycheck cycle and start saving money ASAP.

1. Create a budget.

Even as a young adult who may not be making that much money yet, budgeting is critical because it allows you to see how much money is coming in and going out every month (it’s all about tracking your spending!). Although most 20-year-olds understand they should budget, the reality is most just don’t do it.

Get a budgeting system as early in place as possible and review how you are spending your money so you can make adjustments, if necessary, to ensure you are living within your means and able to save for your financial goals. There are apps that can help you now too such as YNAB.

The basic budget formula for after-tax income is:

• 50% for fixed expenses, such as housing (28% or less for housing expenses), basic food, insurance premiums, etc.

• 20% for financial goals. This would include extra debt payments, your cash cushion, retirement, etc.

• 30% for variable expenses, such as dining out, entertainment, travel, etc.

2. Set up weekly money dates.

Set up weekly money dates to review your budget and manage and plan out your finances. During your money date, you should pay your bills (although most should be set up as auto-pay), update and review your budget and take care of any other financial concerns. By calling this allocated time with your money a “date,” you can begin to bring a fun, exciting element into your financial life to help you stay committed for the long haul.

3. Open up a savings account and set up automatic contributions.

Most people don’t save because they make it way too difficult for themselves. Instead, review your budget and aim to start saving toward your financial goals by following the “pay yourself first” strategy. Under this method, you set up your savings to be automated every month and you save before you spend money on variable expenses. 

The goal is to save 20% of your net income but don’t let that amount scare you. Even if you can only start with $10 a month, that’s better than nothing. Every year, review and see if you can increase your savings amount. 

4. Build up a cash cushion.

The goal of a cash cushion is to have three to nine months of your fixed expenses in a savings account to pay for life’s unexpected incidents. Life always throws curveballs—your car breaks down, your computer crashes or you receive an unexpected medical bill—and having money in the bank to cover those expenses will help you maintain your financial peace of mind.

If your fixed expenses are $3,000 per month, you should aim to build a cash cushion of anywhere between $9,000-$18,000, depending on your comfort level, job security, etc. That sounds like a lot, I know. But remember, just start with what you can to build your cash cushion over a few years. Again, even if it’s $10 a week, that’s still one step in the right direction.

5. Keep an eye on your credit score.

Our credit score affects nearly everything in our financial lives. It affects the interest rate on the car loan we apply for, the mortgage loan, the credit cards—and even employers and landlords can reference your credit score when reviewing your application.

By monitoring your credit score, you can see where you stand and what you can do to improve it if necessary. Use websites like creditkarma.com to view your credit score (not your actual FICO) regularly for free and then pay to see your actual credit score at least annually using annualcreditreport.com.

6. Create a debt reduction plan.

The first step is to make a list of all your debts. Get clear about how much you owe, the interest rate of each debt, and the minimum payment due. Then review your budget to determine how much you can realistically add toward extra debt payments and start with the debt with the highest interest rate while paying the minimums on the rest.

This will allow you to save the most in interest payments. Once the debt with the highest interest rate is paid off, move on to the second-highest, and so on.

7. Start saving for long-term goals.

If you have the ability to start investing in your retirement accounts after you’ve allocated some monthly funds toward building your cash cushion and paying off your debts, then set up an automatic contribution into your retirement account. By starting early, you can allow compounding interest to work in your favor on your investment accounts.

If you are new to investing, make sure you do your homework and read investment books so you are clear about what to expect when investing in your future.

8. Focus on building your earning potential.

Income is one of the biggest factors in wealth creation over time. After all, if you don’t make money—or don’t make enough money—it is very difficult to save for your financial future. So if you can’t save as much as you would like to due to your income level, focus on ways to increase your earning potential for the long run. There are a lot of free courses you can take online, and even watching YouTube videos to sharpen your skills is something anyone can do. Also, there are so many ways you can earn extra money on the side. Ramit Sethi teaches this to his community at I Will Teach You To Be Rich. 

Think outside the box, and continue to focus on increasing your earning potential every year.

About the Author: Brittney Castro is the founder and CEO of Financially Wise Women, a Los Angeles-based financial planning firm for women. She specializes in working with busy, established professional and entrepreneurial women who are passionate about life and want to finally understand money—how to manage it, save it, invest it, and protect it—in a fun and simple way. Follow Brittney @brittneycastro.

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This story was originally published on June 15, 2017, and has since been updated.

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5 Things To Do Before You Start Investing

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Investing can be intimidating. But if you’re looking to build your wealth, buy a house or set up a retirement fund, investing is not only one of the best money moves that you can make –– it’s a must. For most people, understanding the basics and choosing the right investment strategy is enough to get started. But the most important question to ask when it comes to planning your financial future is whether investing is right for you, given your current financial situation.

So, to have a candid conversation about making strides toward the financial future you want for yourself, we tapped Lauren Anastasio, CFP® (Certified Financial Planner) at SoFi, during our recent Money Moves Digital Summit to share some tips on building wealth through investing, including what you need to know before you start, and how to really know if investing is right for you.

She identified five financial goals to accomplish in chronological order, before you begin investing in order to build the best possible financial foundation. ICYMI, we’re sharing them below, along with Lauren’s tips to yield your best benefit.

1. Establish a Safety Net

   The first thing you want to do before you consider investing, is establish a safety net. Think about this as a cash savings equivalent to approximately one month's worth of your essential expenses. If you don't have at least enough cash to cover all of your living expenses for one month, then saving is your very first priority––that's the thing you should be doing, before anything else.

2. Seek Employer Match

   Step number two is to obtain any employer match you might be eligible for. If you're not strictly self employed or you do have access to an employer sponsored plan, you will want to make sure that you're maximizing any match that you might be eligible for––you never want to leave free money on the table!

3. Protect Your Income

   Third, protect your income. This means pursuing an appropriate amount of disability or life insurance, depending on your circumstances.

4. Attack Bad Debt

   Next, you want to eliminate any bad debt, It’s important to make the distinction between between good debt and bad debt. Bad debt includes things like credit cards or personal loans, essentially anything charging 7% interest or higher. You will want to eliminate these in their entirety before moving on to investing. The reason is, there's an opportunity cost if you're investing and you can expect realistic average annualized returns of seven or 8% –but if your credit card is charging you 20% that's compounding daily, your money is going to be far more valuable going towards paying off that high interest rate debt than it will be going into the market. This is one step you absolutely do not want to skip.

5. Build an Emergency Fund

   Step five includes establishing a fully funded emergency fund. This is when you take that safety net and build it up to a balance that's closer to between three to six months worth of your essential expenses. This is vitally important, because if you do have an emergency that comes up, including some type of loss of income, you don't want to have to take money out of the market and possibly trigger a taxable event or have to dip into that money when the market is down. You will want to make sure you always have cash on hand.

Once you’ve accomplished steps one through five, you’re likely ready to start investing! To learn more about investing and how to align your approach to your goals, visit SoFi.com/Invest. 

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ABOUT SOFI: 

SoFi is a different kind of finance company whose goal is to help people get their money right. Whether you're looking to save, spend, earn, borrow or invest, SoFi is a one-stop shop for your finances, designed to work better together. Our products are built around our members—so that they have the tools they need to take control of their financial futures. Learn more by visiting SoFi.com.

DISCLAIMERS:

Advisory services are offered through SoFi Wealth, LLC an SEC-Registered Investment Adviser.

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

Permission to Spend: Why A Budget is This Couple's Secret To Reaching Their Goals

Whatever it is, the way you tell your story online can make all the difference.

Welcome to this special episode of WorkParty titled Money Talks, a Budget Broadcast Series in partnership with You Need a Budget (YNAB), designed to educate everyone on the power of building a budget.

Whether it’s starting the business, going on the trip, or renovation projects at home, a budget (of all sizes) can help you accomplish those dreams. YNAB is the leading personal finance platform that has helped hundreds of thousands of people take control of their finances–including our guests today.

In the second episode of the WorkParty and YNAB Budget Broadcast Series, Jaclyn sits down with Chris and Julia Marcum, the duo behind the dreamy home renovation, DIY project and lifestyle blog, Chris Loves Julia, to chat about how to use a budget to plan, prioritize, and not only set–but actualize–your financial goals, and why you should start today. 

Get your notepad ready and press play on episode one! Your budgeting game is about to change. Join the party on social @workparty and stay in-the-know at workparty.com.

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Why This Founder Wants You to Adopt a "Profit First" Mentality

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Being a small business owner means always being flexible, able to pivot quickly, and willing to veer from the plan as needed. The COVID-19 pandemic certainly put those skills to the test this year, and my team at Provenance Meals was able to step up to the task and propel us forward. 

Before founding Provenance Meals, I was a certified holistic health coach in Brooklyn. I encouraged my clients to follow a simple elimination diet replacing processed and packaged foods with wholesome ingredients, and their overall health, vitality, and energy levels dramatically improved. But finding the ongoing time, motivation, and know-how to cook healthy meals at home—and sustain these life-changing benefits—was a challenge for most everyone I worked with, and I knew I could help. After finding this clear gap in the market, I launched Provenance Meals in 2012, making it easy for time-pressed humans to achieve their wellness goals, nourish their bodies, and replenish their spirits with 100% gluten-free, dairy-free, and refined sugar-free meals designed by wellness experts, and made from scratch with thoughtfully sourced, local ingredients.   

Launching Provenance Meals was not my first entrepreneurial venture—I invested my heart, soul, and just about all of my savings into a small gourmet market in 2016 that sold semi-prepared, organic meals to busy New Yorkers. Shortly after opening, my business partner decided that to back out of our business deal and sue for all of the money she had invested. It was an incredibly stressful time, and I went into a great deal of debt to buy her out, but I appreciate that the experience taught me valuable lessons that would help propel me to launch Provenance Meals.  

The biggest lesson I learned was to maintain a healthy cash reserve to stay afloat through unforeseen challenges. Since then, I have followed the “profit first” mentality, setting aside money for a small profit and taxes from our sales, and only then allowing myself to spend what was leftover to operate. I didn’t know anything about raising money or wooing investors when I opened my first business. As the daughter of immigrants, I was taught that to get ahead, you must work hard, spend frugally, and save money. Now I also know that you need to start with a business model and unit economics that work from the get-go, and you will be that much more prepared for emergencies in the future. 

This system is how I’ve been able to bootstrap Provenance Meals without relying on investor life support. We have been profitable since launch, with $0 raised until this year's community-driven campaign on Republic, our first-ever fundraising effort (at 742% of the minimum goal), which allows for angel investors and Provenance Meals' longtime community members to buy a stake in the company. Since our nationwide launch this spring, we’ve seen revenue increase 78% month over month. 

For small businesses looking to expand their brands during a time of uncertainty, here are some additional pieces of advice that have served me well over the years: 

React quickly and assertively in the short term.

But be aware of longer-term consequences. Right when COVID-19 hit New York City in the spring of 2020, we realized quickly we needed to pivot to meet our community’s changing needs (as many New Yorkers fled to second homes). We expanded our local courier zones in New York to include Connecticut, Westchester, and Long Island in order to follow our clients, and have seen demand soar in these regions. This led us to begin shipping nationwide and expand our offering to include new products. Because we’re now in a position to reach a larger audience and garner higher total revenue, we’re able to lower prices to make our products more accessible—our Daily Essentials program now starts at $52/day (originally $68).

Double down on your values.

Don’t be wishy-washy when it comes to why you do what you do. Your mission statement, your company’s core values, and your voice are your “North stars” in making business decisions. The more authentic you are about why you’re doing what you’re doing, the more you’ll love your business and the more you’ll attract customers. I see so many starting founders comparing themselves with other entrepreneurs. Truthfully, we’re all figuring it out as we go along! Stick to what makes your business uniquely your own and you’ll find success in your field. 

Celebrate your strengths.

A perfect company, strategy, or plan doesn’t exist, but what does exist is my own confidence in the future, which I pass on to my team. I like to think my perpetual optimism helps show everyone how bright the future can be and inspires my team to share the dream with me. That’s one of my strengths as a leader. What are yours? Celebrate your strengths and use them to your and your team’s advantage.

Balance is key.

As the founder, in many ways, you are the business. When you take care of yourself, you’re also taking care of your business. Having two young children when I first started Provenance, I had no choice but to prioritize my family. The process was a stressful juggling act at the time, but in retrospect, forced me to be fully present in my home life and separate my work life. Over the years, I’ve learned strategies to cope with the stress and holding the responsibility of my business and my staff’s livelihoods on my shoulders, with practicing presence and meditation at the top of the list.

Give back where you can.

The coronavirus pandemic has exposed a lot of problems that already existed in the food industry, including the tremendous amount of food waste, the working conditions of farm and factory workers, the tenuous nature of the hospitality industry, how the way we grow and eat food affects global climate change, how representation matters, and the amount of food insecurity that exists in the United States. As Provenance Meals grew, we knew that we wanted to prioritize giving back to our community. We forged a nonprofit partnership with Kiss the Ground, underscoring our mission to support independent farmers and further provide widespread access to nutrient-dense ingredients. 

Founding and running my own business is a dream come true. I have so much pride in what my team and I have built, and feel like we’re only just getting started. Especially in challenging times such as these, I rely on our spirit and determination to further our mission to improve the health and lives of others through the power of (delicious) food as medicine.

About the Author: Caroll Lee launched Provenance Meals to make it easy for modern, time-pressed people to achieve their wellness goals, nourish their bodies, and replenish their spirits. Caroll believes nutrition is the bedrock for feeling good, performing well, and living a longer, happier life. She launched the meal program in 2012, and in eight successful years, Provenance Meals has amassed a dedicated community, including noteworthy fans like Naomi Watts, Taryn Toomey, and Rachel Brosnahan. The nourishing, anti-inflammatory food offerings are all 100% gluten-free, dairy-free, refined sugar-free, and composed of organic, local ingredients.

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This Mom Founded a Kid’s Clothing Company to Spend More Time With Her Family

You asked for more content around business finances, so we’re delivering. Welcome to Money Matters where we give you an inside look at the pocketbooks of CEOs and entrepreneurs. In this series, you’ll learn what successful women in business spend on office spaces and employee salaries, how they knew it was time to hire someone to manage their finances, and their best advice for talking about money.

Photo: Courtesy of Fiona Sahakian

In 2010, Fiona Sahakian was a hairdresser and new mom working long hours and daydreaming of spending more time with her growing family when a client introduced her to Etsy. “I was so intrigued by working from home and using my creativity to generate income through a platform,” Sahakian tells Create & Cultivate. Less than a year later, she launched the first iteration of Posh Peanut, a line of handmade accessories that eventually evolved into the beloved children’s clothing brand that it is today.

Fast forward to 2021 and Posh Peanut is a favorite among celebrity moms by the likes of Chrissy Teigen, Gabrielle Union, and Eva Longoria, to name just a few. If you’re not an A-lister you can still add the brand’s coveted pieces to cart—but you’ll have to act fast. Last year, Posh Peanut launched at Nordstrom and Saks Fifth Avenue, and the brand’s weekly collection drops have been known to sell out within five minutes (!). But the business wasn’t an overnight success. “I funded my business one sale at a time,” the founder explains. “I spent $500 from my own account for my first ‘big’ inventory purchase. Every sale and every dollar went back into inventory.”

Ahead, Sahakian talks about what it takes to slowly but surely build a successful brand and why hiring an accountant ASAP will save you money in the long run.

Take us back to the beginning—What was the “lightbulb moment” for Posh Peanut? What inspired you to launch your business and pursue this path?

I really wanted to stay home with my growing family. I was a hairdresser working crazy hours over the weekends. When I had my son in 2010, a customer turned me onto Etsy and I was so intrigued by working from home and using my creativity to generate income through a platform. Posh Peanut has evolved over the years from handmade accessories to the softest essentials you can imagine. Although I now work more than ever, it has given me the opportunity to also work on my own terms and around my kids’ schedules. 

Today, Posh Peanut is beloved by celebrities including Chrissy Teigen, Gabrielle Union, Mindy Kaling, Eva Longoria, and more. How did you create buzz around your business in the beginning?

In the beginning, we had no marketing budget but we used social media outlets to rally up fans and our community. Our community built the buzz surrounding our coveted designs with lots of hashtags and resharing. 

Last year, Posh Peanut launched on Nordstrom and Saks Fifth Avenue. Congratulations! What has been the biggest challenge in scaling your business and what lessons have you learned along the way? What advice can you share on how to scale a business sustainably?

Our biggest challenge has been keeping up with demand and diversifying our supply chain. Our collections are known to sell out in 5 minutes and our production lead time is 8-12 months out on the calendar. We have had exponential growth in the past two years. Finding new supply chains to meet our growth and finance the business has been our biggest hurdle. We are 100% bootstrapped, and in order to scale to our projected numbers, we need capital.

We have been lucky to have great relationships with our suppliers and banks, and have learned that it is better to grow slow and sustain that growth rather than raising a bunch of capital. We don’t put ourselves in a corner or bite off more than we can chew. I suggest negotiating with your suppliers, banks, and find funding yourself if you do not want investors. There are many great lending programs in the e-comm space. 

How did you fund Posh Peanut? What were the challenges and what would you change? Would you recommend that route to other entrepreneurs? 

Don't run, walk. I funded my business one sale at a time. I spent $500 from my own account for my first “big” inventory purchase. Every sale and every dollar went back into inventory. I didn't pay myself out until many years later. I was lucky enough to have a supportive husband. I also kept my job as a hairstylist until I was able to save enough to focus 100% on Posh Peanut. I didn’t take any loans out or seek investors. 

This path of course is a slow growth, but I wanted to be self-funded. I think many entrepreneurs seek out funding very early on without getting their feet wet. As we scaled, it did become more difficult and with larger inventory purchases we needed more capital. I don’t think I would change the way we funded the business. Although it took us a bit longer to scale, I think it taught us a great lesson of not over-investing in products, growing too quickly, and then figuring out how to sell them. Slowly growing taught us to invest in the correct places. 

Where do you think is the most important area for a business owner to focus their financial energy and why?

Payroll. I think you can add tons of people to your team who don't add value, making your financials top-heavy every month. 

What was your first big expense as a business owner and how should small business owners prepare for that now? 

Inventory. Inventory was our biggest investment but also the only way to sell. Negotiate. Negotiate. Negotiate. If you are a product-based company, your inventory will always be the biggest expense. Ask vendors for terms, don't bite off more than you can chew. You can always buy more and replenish when you see demand.

What are your top three largest expenses every month?

Payroll. Inventory. Paid media.

Do you pay yourself, and if so, how did you know what to pay yourself? 

I started paying myself four years ago. I didn't pay myself in the beginning as I used all the money to fund the business. However, every time I hit a goal of X I would take a little bit of the revenue and spend it on myself on something I really wanted. I believe in setting goals and rewarding yourself with a gift, trip, or whatever that thing is that really motivates you to get to that next step.

Would you recommend other small business owners pay themselves? 

If you can, yes! I was lucky because my husband had a good job and paid for the necessities and I was able to save all of Posh Peanut’s earnings to pay for the business expenses. I was able to put every dollar made back in the business. I don't see a wrong or right answer. It's how your personal financials pencil out while sustaining the growth of the business.

Did you hire an accountant? Who helped you with the financial decisions and setup? Are there any tools or programs you recommend for bookkeeping?

We did hire an accountant early on. He helped set up our corporations and made sure our finances were aligned. I did not do any accounting or financials in-house. We did hire a controller a few years ago as the company was scaling quickly. I think hiring an accountant or financial advisor is very important as soon as you see traction in your business. You'll save more money outsourcing finances than trying to do it all yourself. I know how to make the money but I would never have been able to scale without the guidance of professionals.

What apps or software are you using for finances? What’s worked and what hasn’t?

We currently use Avalara for all of our e-comm state taxes and our controller does all the other finances through our ERP system. 

How did you know you were ready to hire and what advice can you share on preparing for this stage of your business? 

Jack of all trades, master of none. When you get to the point of, “Oh, shit,” you need to hire someone ASAP. You have to spend money to make money. Unless you have a degree in finance or lived in this space, don’t try to carry everything on your shoulders. Having a great accountant, CPA, etc. will save you a lot of money in the long run. 

Do you think women should talk about money and business more? Why? 

Yes! Yes! Yes! Why not? Women need to start sharing their experiences more and talk about capital. In a male-dominated space, it is incredibly nice to find other women you can relate to. Hopping on a call to get advice from another woman that understands the struggles is refreshing. You don't feel alone. Women are often more reserved or don't want to ask questions. I wish more women would find confidence and open up with what they are doing in their space.

You’re a mom of two and a founder! How has being a mother changed your priorities and your focus in terms of your career? Do you think motherhood has made you a better business person?

I always say I have three babies, my two kids, and my business. I love what I do. I love my kids to death but I also love working, building teams, and creating community. My career has made me a better mother. My schedule is always run, run, run, but my kids understand why I am doing it, and in the end, it's for them. When I am not working, I am 100% with my family. My career has taught me to slow down and do everything 100% with intention. Especially with my kids.

Do you have a financial mentor, and do you think business owners need one?

Yes, we have consultants for finance. I think when you become seasoned in your industry it's great to have different eyes and mentors in all aspects of your business.

What is your best piece of financial advice for new entrepreneurs?

Know your numbers.

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The Simple Trick That Helped Me Double My Income in a Month

Photo: ColorJoy Stock

I’ve always felt chronically underpaid. With a master’s degree in history and a passion for social media marketing, I applied for 347 jobs in a single year before I got my first “real” job (yes, I kept a list)—working four part-time jobs at once during that time—and my first-ever salary clocked in at a whopping $30,000. I thought I’d struck gold, and I foolishly believed that my salary was going to be enough to pay for rent in Nashville, living expenses, insurance, my phone bill, building a savings, and the massive chunk of student debt I had after earning two degrees. 

After my dream job turned out to be a nightmare, however, I started to get desperate. I took a part-time paid internship at a publishing company hoping to turn it into a full-time position and—surprisingly—it worked. A month later, the owner of the company pulled me into his office and asked me if I wanted a job taking over as the director of marketing.

Obviously, I said yes. I went from intern to leading a department overnight, and I happily accepted the $35,000 salary—completely unaware that it wasn’t anywhere near the industry standard—and clung to the promise of a raise within six months. Six months later, armed with countless spreadsheets and a report on everything I’d accomplished on behalf of the company, I walked into my boss’ office and asked for my promised raise. 

And he laughed at me. 

Even though I quit the job soon after, I’ll never forget that moment or the way it impacted my career (and more importantly, my salary growth) from that point on. Even though I knew I should negotiate, I found myself wavering in every conversation about money for years to follow. At my next job, when I discovered that my predecessor had been paid a whopping $25,000 more than I was, I accepted it—telling myself that they’d get me up there eventually—but after two years spent trying to prove myself worthy, I was told to “be grateful” for the amount I was given.

Eventually, I started believing that I would never break past $50,000. It was too much—too high to achieve—and despite ten years of experience, two director-level positions, speaking gigs, and a slew of clients who were obsessed with my work, that belief turned out to be a self-fulfilling prophecy. No matter what I did, no matter how many books or courses or life coaching sessions I took, the line didn’t budge. And my self-worth tanked.

I’d always believed that something was better than nothing, so I found myself accepting every opportunity that came my way. A freelance writing gig that barely paid above minimum wage? I’ll take it. A $3,000 class that promised to teach me how to build a successful online business? I’ll buy it. An unpaid speaking gig? I’ll do it. I wrote and published my first novel. I launched a podcast. I created digital products. I sold an online course. I hustled and created and pushed myself to do more, but no matter how much of myself I gave away I felt like I couldn’t get anything in return.

I barely made $10,000 during my first year of self-employment. 

Eventually, I knew something had to give. Work felt like I was attempting to lift a 500-pound weight, and—even though it wasn’t budging—I was constantly exhausted from the effort. Instead of letting myself continue to feel like a failure while half-heartedly juggling everything I’d built over the past several years, I made the difficult decision to let everything drop. I was grateful and privileged enough to have a partner who kept most of our finances afloat, so I maintained my core clients and said goodbye to maintaining my podcast, my writing, my social media platforms, my course, and more. I needed time to decide whether or not I even wanted to pick those things up again, or if I was ready to admit defeat.

Barely able to function, I remember telling my therapist that I was ready to give in, but that I wasn’t sure how I could survive a desk job. Over the last three years, I’d learned to love my independence and my ability to set my own schedule, and I was terrified that the only way I could be “successful” and hit that $50k mark was if I threw myself into a 60-80 hour a week corporate job that obliterated my free time...and my happiness.

“Forget the $50k thing, that’s a separate issue,” my therapist said. “What is your time worth? Not just the time you’re working, what is your free time worth?”

“Like, hourly?” I asked. 

She nodded. 

If I was honest, I didn’t spend a lot of time thinking about my hourly rate. I accepted whatever was offered because I was grateful for the work, and the idea of my free time having a dollar amount next to it didn’t sit well. Why would it have an hourly rate attached to it? It’s just the time I wasn’t working. It doesn’t have worth. 

Except it did. If my time had value—and even my free time had value—then that could change everything I did, and not just in my career. Later that day, I told my partner about the question and he asked if I had an answer. I laughed awkwardly and joked, “I don’t know. Seventy-five dollars an hour.”

It was more than double the amount that I was making as a freelancer, but it was a joke—it wasn’t real—so it felt safe to dream. It was just a post-therapy conversation, after all, not a quote for a potential client, so it didn’t mean anything...until I found myself watching a movie on Netflix that I didn’t even enjoy and wondered, “Is this worth $75 and hour?”

It shocked me when the answer was no.

Slowly but surely, I found myself asking that question more often than not. It shaped my decisions of how I spent my time, and I realized just how much time I was wasting on things that didn’t even bring me joy. It was like I was Marie Kondo-ing my free time, and—while sometimes the answer was a resounding yes, like when I took a much-needed break to play three hours of Animal Crossing on my Nintendo Switch—it changed the hobbies I engaged in, the people I talked to, and even my business. 

I started saying no to low-paying work. I ditched the mentality that something was better than nothing and started looking for clients who could afford to pay me more. I quoted higher than I ever had, and within a month I doubled my income. Eventually, I realized that I was earning the same amount of money working part-time that I made at my first full-time job. I was ecstatic, and I even started turning away work that no longer fit my goals. Because my time had value, because I had value, the decisions I was making as an individual and as an entrepreneur started to change.

Slowly but surely, I stopped undercutting myself at every turn. Over the next few months, my business exploded. I doubled a massive proposal to a new client at the last minute—fully expecting them to negotiate for a lower rate—and was stunned when they accepted it as is. I hired an assistant, plucked up the courage to fire a client who was mistreating me, and even walked away from my lowest paying gig.

In the end, I realized that feeling underpaid was just that: a feeling. I didn’t have a $50,000 upper limit. I was my upper limit. I was the one holding myself back, I was the one consistently accepting less, and I was the one who let my imposter syndrome talk me out of tens of thousands of dollars. It was only once I decided what I was worth—and owned it—that other people could see it too.

“I ditched the mentality that something was better than nothing and started looking for clients who could afford to pay me more.”

—Jandra Sutton, Founder of The Wildest Co

About the Author: Jandra Sutton is a writer, entrepreneur, and founder of The Wildest Co, a creative agency specializing in content creation, branding, and marketing for busy entrepreneurs and small business owners. She's also the host of The Wildest Podcast, a weekly personal development podcast in 10 minutes or less. You can follow her on Instagram @jandralee.

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A Millennial's Bucket List for Achieving Financial Freedom (Step 1: Start ASAP)

Photo: Smith House Photo

If you’re a millennial who wants to achieve financial freedom sooner rather than later, there are several important money moves you should be making now. If you wait too long, you’ll spend your later years catching up rather than going on vacations, upgrading your house, or taking early retirement.

Ideally, you want to start making these money moves while you’re in your 20s and 30s, so you’ll be able to reap the benefits of your financial strategy for a maximum length of time. Here are the bucket-list items you should start checking off to set yourself up for financial freedom.

1. Create a budget.

A budget is essential. Make a list of all your income and expenditures, and add them up to see how you’re making out, monthly and annually. If you’re seeing a surplus, that’s great—but if not, you’ll need to tighten your budget by figuring out the amounts you need to make, save, and spend in order to make ends meet.

Even if it looks like you’re doing okay balancing your monthly budget, if there is room to scale down your spending, you should. Save a little extra and reroute that money into an investment.

2. Build an emergency fund.

One major car repair, injury, appliance replacement, or other big-ticket items can really set you back financially. Create an emergency fund against these possibilities and only dip into it when absolutely necessary. This way, you aren’t maxing out your credit cards or depleting your other funds if something unexpected pops up.

If you struggle with building up your fund, have extra money deducted from your paycheck so you’ll get a refund at tax time, then funnel that money into your emergency fund. And think of it this way: If you’re fortunate enough not to need your emergency fund, then you’ll be ahead of the game financially when your 50s arrive.

3. Set up a retirement fund.

Too many people wait to start saving for retirement until they reach middle age, which is way too late. Many millennials are tracking to follow suit, with two-thirds of them having saved nothing yet, despite the fact that they see retiring around age 61 as a reasonable goal.

Experts typically recommend that young adults should open an IRA or other retirement accounts,  and definitely should invest in their 401(k) accounts, especially when employers offer matching funds. In fact, many Americans, in general, are missing out on this financially smart benefit. A solid rule of thumb is to put about 15 percent of your pay annually into a 401(k).

4. Think big.

A savings account is a smart idea; however, it’s not going to yield a big return via interest nor ferry you to early retirement. But if you do have money saved, then you have the option to make significant and potentially lucrative investments.

For instance, you could buy a rental property. You can list your home on vacation rental sites, collect rent, pay your mortgage, stash away the remaining funds, and build some equity. Over time, you might even want to add a property or two to your portfolio.

Or start your own business. Got an idea, passion, or golden opportunity? Take an entrepreneurial leap! Many businesses can be launched right from home on a shoestring budget. Put a plan together, get the word out on social media, then attend trade shows and other networking events to promote yourself and build your company.

These two options or similar ones put your wallet to work, and can eventually position you for solid financial footing down the road.

5. Take a few investment risks.

Even if you're risk-averse, it’s not a bad idea to know how the world of investment works. Done right, it’s a venture that can be quite lucrative. Look into investing just a little at first, whether in stocks, bonds, commodities, real estate, your sister’s promising business, or another opportunity. Then watch your investment carefully to see if and when it pays off. If it doesn’t, look to shift into another type of investment.

6. Rethink your location.

If you’re living in an expensive city, consider a change of scenery. These younger years are a perfect time to try out new places, anyway. So why spend thousands a month on sky-high rent or property taxes? By moving to a more affordable city, you could save loads on rent and living expenses. For example, Omaha is a cheaper market than Los Angeles. Take your savings and put them to work toward your financial goals.

7. Watch your credit spending.

As millennials, we are firmly a part of the digital spending revolution, which is convenient but makes it easy to overspend. When you can’t pay off your credit card bill every month, you’re charging too much.

To avoid accumulating credit card debt, pay close attention to your spending, delete shopping apps off your phone (or at least keep yourself logged out), and track your receipts. If you’re already in debt, consider debt consolidation so you can get back on track. (And speaking of debt, if you’re still carrying student loans, look into loan forgiveness programs or refinancing.)

At this point in your life, you’re young enough that small moves can make a big difference to your financial future. While age 60 might sound far off, the passage of time can surprise you. If you’re looking to get on track toward fiscal stability, now is the time. Check off these bucket list items and watch your financial freedom begin to become a reality.

Written by Molly Barnes, Digital Nomad Life.

Love this story? Pin the below graphic to your Pinterest board.

This post was originally published on June 5, 2019, and has since been updated.

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How to Stress Less, and Find Joy in Your Finances with Ashley Brooke

Welcome to this special episode of WorkParty as part of our Budget Broadcast Series in partnership with You Need a Budget (YNAB), designed to educate everyone on the power of building a budget.

Whether it’s starting a business, saving for a trip, or taking control of your finances once and for all, a budget (of all sizes) can help you accomplish those dreams. YNAB is the leading personal finance platform that has helped hundreds of thousands of people take control of their finances–including our guest today.

In this third and final episode of the WorkParty and YNAB Budget Broadcast Series, I’m sitting down with Ashley Brooke to chat about money mindset–how to overcome common obstacles, manage money stress, and budget for fun–not just for fear. Join the party on social @workparty and stay in-the-know at workparty.com.

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10 Money Questions to Ask Yourself (So You Can Afford the Life You Want)

What is your relationship with money? Do you love to save and budget for the future, or are you all about enjoying that hard-earned money and prepared to go into debt for it? Either way, we need to get better at talking about it if we ever want to be better at managing it, and eventually having more of it. Especially when you consider that globally, women control upwards of $20 trillion in annual consumer spending. But sadly, when it comes to managing money and planning for their financial future, women aren’t as independent as you’d expect. A study found that more millennial women cede control to their husbands than women of older generations. Well, our new series, The Money Files is set to change all that by helping women become masters of their own finances so they can manage their money and their future.

Photo: Smith House Photo

Money. We all love spending it and we all want more of it, but saving it is the hard part. It’s not that we don’t want to see more money in the bank (duh) but striking a balance between saving for the future and living the life you want isn’t always an easy one to master. Too often, the pendulum swings farther into the spending camp and before you know it, you’re in the red and playing catch-up with the interest charged on your credit card debt.

Don’t worry, we get it. That’s why we asked Priya Malani, partner of Stash Wealth, to help us all get our finances in order. So, she sent us 10 important money questions to ask ourselves so we can bank that cash, pay off that debt, and live life like a millionaire (well, that’s the dream).

1. What can I realistically do to improve my income level?

Negotiation is never a bad idea as long as you’ve planned for it. Most managers plan for you to negotiate and so there’s wiggle room in your salary range. An annual negotiation is perfectly appropriate. Use the months leading up the conversation to prime your manager and document the proof that you’ll use when going in for the ask.

When is a negotiation not smart? When you go in cold and demand a raise. You’ll want to have data to support your request and documentation of your value-add (even if it’s qualitative, not quantitative). Stay factual and unemotional and above all, leave politics at the door.

Side note: IMHO, wanting to upgrade your lifestyle is not a strong reason to demand a raise. I was recently speaking to someone who was advised to use this strategy and as a business owner, I can say that not only would it not work, but it would leave me with a poorer opinion of the employee’s ability to #adult. Taking e-courses that are tangentially related to your field is an excellent way to demonstrate a commitment to increasing productivity and value and certainly supports your case for a raise.

2. What can I do to reverse bad credit and get my score back on track?

This may sound counterintuitive but start using a credit card and paying it off in full every single week or more often. This is one of my favorite FICO hacks (FICO is an abbreviation for the Fair Isaac Corporation, the first company to offer a credit-risk model with a score). It’s a quick and easy way to positively impact one of the most important parts of your credit score—your credit utilization ratio. Make sure to never charge up more than you can pay off.

If your credit cards are maxed, find ways you can pay down that debt ASAP. Consider selling stuff on FB Marketplace or via Poshmark, getting a roommate, cutting any unnecessary expenses that may free up cash that you can put towards your debt. And once you find the extra money, set up a regular debt repayment automation, so you don’t accidentally spend it.

If you want to explore other actions that may bump your score, download the CreditWise app (it’s free) which includes a credit score simulator. It shows you how different actions will impact your credit score before you actually commit to doing them. I’m a huge fan of this app and use it myself.

3. How much should I be saving for retirement?

There’s no easy answer here because retirement is not one-size-fits-all. You can start by using an online calculator to find out how much you’d need to put away to ensure you’ll replace a portion of your current income by the time you hit your desired retirement age.

Here are the main things you need to think about:

• How much you earn now?

• Is it just you in retirement or are you providing for someone else?

• At what age do you want to retire?

• How long do you expect your retirement to last (aka life expectancy—MORBID, I know!)

Once you determine these things, you’ll have the major inputs that will help you decide how much you should be putting away for the exact retirement you picture for yourself. Yes, it’s very hard to picture what your life may look like years from now, but I have three words for you: Playing. Catch-up. Sucks.

4. If I’m planning on having children, how can I ensure I have enough funds to take care of them on one income? When should I start saving for their schooling? 

A good exercise is to stash away 10-15% of your income today and see how it feels. That’s the percentage of your income that will go toward your children for basic day-to-day expenses (not including schooling). If you feel you can manage on 85-90% of what comes in the door, that’s a good indication that you have room for kids, financially.

When it comes to saving for school, it all depends on how much support you want to provide them. 100% of four years at a private institution? 50% of four years at a public institution? Once you have a sense of what your priorities are here, you’ll be able to back into your savings goal. Add that savings goal to the 10-15% I spoke about earlier and plan to live without that money—is it doable? If so, start saving as soon as possible.

Once again, it’s no fun to play catch up and the longer you wait, the more you’ll have to save to be on track for your goal.

5. What would happen if my spouse passed away? How can I plan for that?

This is a not-so-fun thing to think about and plan for but it’s pretty important to do so. When it comes to the financial support your spouse provides, the first step is to decide whether you feel dependent on your spouse's income or if you own property or have kids together. If so, life insurance may make sense. A life insurance person can help you evaluate how much coverage to obtain to ensure that if your spouse passes away, you wouldn’t have to change your lifestyle, in other words, you’d still be able to pay your mortgage and take care of your children in the same way you are now (monetarily speaking).

“Yes, it’s very hard to picture what your life may look like years from now, but I have three words for you: Playing. Catch-up. Sucks.”

6. When should I start investing money? And how do I know what to invest in?

This question deserves a whole article in and of itself. But the long and short of it is this. Investing is a way for your money to grow over time, not overnight. If you think investing leads to a “quick win,” you’re thinking about it all wrong. Wall Street loves to portray investing more like gambling but the fact of the matter is that the sooner you start investing, the more successful you’ll be because money grows with time and you need to be patient for it to work. 

As far as what to invest in, this is another area that Wall Street (and the media) portrays completely incorrectly. They make it seem like you're supposed to pick stocks and trade frequently when the opposite in fact is true—slow and steady wins the race. If you’ve ever heard of index funds, you’re on the right track.

Investing is a means to accomplish your financial goals and so technically, no one should tell you what to invest in until they know what you’re investing for. Goal-setting is the first step to knowing what to invest in.

7. How can I save for a house? What do I need to do?

Speaking to my point above, the first step to take is to commit to homeownership as a financial goal. If you’re in a relationship, you’ll want to have this conversation with your significant other. Define the timeframe in which you’d like to accomplish buying a home. Using sites like Zillow can help you evaluate what kind of home you’d like to buy and how much it will cost. Once you know what you’re aiming for, you can back into how much you’ll have to save for a down payment. About 20% is a relatively standard down payment, but many Millennials are opting for 10% down to get into a home sooner. This is totally fine as long as you have the cash flow to cover the mortgage with wiggle room. You don’t want to end up #housepoor.

8. How can I make a budget that still allows me to live the life I want? Are there any apps that I can use?

YNAB is a great app that helps you segregate your cash into different buckets so you can set money aside for your priorities first (rent, bills, student loan payments) and then blow the rest, guilt-free. At Stash, we call it reverse budgeting.

9. Should I have a financial planner? How do I find one that’s right for me and isn’t going to cost too much?

Financial planners serve many purposes, but their main job is to help you consider your short-, mid-, and long-term financial goals and then reverse engineer a game plan that puts you on track in the most cost-effective, tax-efficient way. Some people feel comfortable figuring this out on their own while others feel they might benefit from a guided conversation. A good financial planner can also serve as a mediator when you’re in a relationship and provide that unbiased outside opinion that’s sometimes the exact thing your spouse needs to hear from someone else. Some people feel they’ve done things right and use a financial planner simply for a second opinion from an experienced professional.

Finally, a financial planner knows that you may not know all the things you should be thinking about and makes suggestions to make sure there aren’t any holes in your plan. Stash Wealth is a virtual financial planning firm for H.E.N.R.Y.s™ (High Earners, Not Rich Yet) who are in their 20s and 30s and want to take their financial life to the next level. Stash Wealth is a fiduciary (no conflicts of interest) and charges a one-time flat fee to build you a customized game plan, called the Stash Plan®. Is the Stash Plan® right for me?

10. Do I have enough for an emergency fund? How much should I keep in that fund?

Unlike most financial professionals, Stash Wealth believes your emergency fund should be no more than three months’ worth of your fixed expenses (rent, bills, etc). Most personal financial gurus talk about six to 12 months, but we think that’s crazy for four reasons:

1. Your emergency fund is supposed to be your first line of defense, not your only line of defense.

2. Millennials are hustlers. If sh*t hits the fan, we’re at a time in our careers where we are able to reset our incomes pretty quickly (of course, you know your industry best)

3. We have so many other financial priorities. Waiting until we’ve saved up 6 months in cash, has us wasting precious time that could have been better used to help us achieve other financial goals.

4. That’s way too much money sitting in cash. As good as the online banks are (and that’s where we’d recommend you keep your Emergency Fund), your money is technically still losing value every year thanks to inflation. Millennials want their money to work harder for them. 

“If you think investing leads to a “quick win,” you’re thinking about it all wrong.”

-Priya Malani, Entrepreneur and Founding Partner at Stash Wealth

About the Author: Priya Malani is an entrepreneur and founding partner at Stash Wealth, a financial planning firm for H.E.N.R.Y.s™ (High Earners, Not Rich Yet). After years of working on Wall Street, Priya left to work with millennials, who are largely ignored by traditional financial firms. Stash’s clients are 20- and 30-somethings who make good money and want something to show for it. In addition to running Stash, Priya serves as the resident financial expert for Refinery29. She is a featured expert on numerous sites and speaks regularly at businesses and universities around the country. She appears regularly as a Millennial Money Expert on SiriusXM.

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This story was originally published on August 1, 2019, and has since been updated.

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