TCC Podcast #287: How to Manage Finances, Pay off Debt, and Invest for the Future with Keina Newell

The people and stuff we mentioned on the show:

The Copywriter Think Tank
Copywriting Income Survey
Kira’s website
Rob’s website
Keina’s website
The Copywriter Club Facebook Group
The Copywriter Underground
Sign up for Typeform
Episode 110

Full Transcript:

Kira: All right. Keina, let’s kick this off with your story. How did you end up as a financial coach?

Keina: I, I think my, my go-to answer is that God has a sense of humor, uh, which has been the theme my entire life, but I ultimately got into financial coaching because I was really looking at what did I enjoy doing? And one of the things that I really enjoyed was budgeting, and in my own personal story, um, I graduated college and with a lot of student loan debt. And in addition to having student loan debt, I actually joined Teach for America, which anyone who knows anything about teachers teaching is not like the highest-paid position in the world. And at that time, I was making probably like $30,000 a year and trying to figure out how could I actually do something that felt very passion-aligned but also be able to work towards buying a home, saving money and paying down student loan debt. So it was like through my own personal journey of budgeting and figuring out how to buy a house, how to make more money. And that progress over, over a decade, got me into the financial coaching space.

Rob:  So as you’ve been coaching Keina and working with people on their own finances, where do you see the biggest opportunities or the starting point where we need to be thinking more about our finances?

Keina:  I would say really knowing the purpose of money in your life. I always encourage people to think about when you’re 80 years old, like, what do you wanna have achieved? And I think sometimes people think it’s like a silly question, but I don’t think that we actually kind of press pause to think about why are we doing the work that we’re doing right now? Like, what is it in service of? Um, and so when you’re 80, what does life look like? And, and really thinking about, okay, so if I am going to achieve those things, which generally people talk about, you know, wanting to be retired, I have grandkids I’m able to travel. Like, what does that actually mean for where you wanna be maybe five years from the current point in time? What does that look like for a year from now? What does it mean six months from now? But really starting to, I identify for me, what looked like financial goals. Like maybe it looks like, you know, you wanna save a certain amount of money. Maybe it looks like you are thinking about a home buying process, but I think we actually have to start to conceptualize and kind of backwards plan where we desire to be financially, so we can decide what we actually wanna work on in the here and now. 

Rob:  So can we take that to an example level? Like what do, if let’s say that one of my financial goals is to buy a home or, you know, maybe it’s to travel more? Like, what should we be thinking about a year out or six months out, three years out? What does that look like? 

Keina:  Yeah. So I would say like if just taking travel, for example, and getting kind of granular with that, I hear a lot of people talking about travel, but then when I ask them like, well, how much do you wanna spend on travel? They don’t actually have a number. And so knowing how many trips do you wanna take? Are you taking three international trips? Are you taking four domestic trips? What’s the price of all of those trips? Um, let’s say in a year. And if you know that, um, each one of those trips is, is going to cost. Let’s say $3,000 because you wanna take four domestic trips. Well, you know that you are going to need $12,000 annually to actually be able to travel. So where does that show up in your month-to-month budget that you’re actually saving a thousand dollars a month so that you have that $12,000 travel budget?

I would also say if you’re thinking about buying a home, um, the other thing that I tell people to do is like, can you create space in your current budget for thinking about what it looks like to actually be a homeowner? So if you’re paying right now $1,200 in rent and you wanna buy a house, let’s even just say in the next two years, and you expect that mortgage to be, let’s say you’ve done some numbers on the internet, you’ve looked at Zillow and you kind of know, oh, it’s probably gonna cost me like $1,500 for a mortgage; are you able to actually save an extra $300 a month comfortably without that, without that impacting other areas of your finances?

Kira:  So it seems like you’re, you’re working backwards. You’re reverse engineering, the goals and purpose. Can you talk us through what you do with your clients? Maybe this would help us work through it on our own too. Do you start with the vision and then recommend working backwards from there? Is that where we should start? 

Keina: Depends on who you’re asking for, right? So specifically, I would say talking about business owners, I think if you’re looking at your personal finances, I always tell people with business finances, I actually want you to sit down and write out what your personal expenses are. Like, how much do you actually desire to pay yourself? So as a business owner, you should be paying yourself consistently, and there’s some amount of money that you desire to be paying yourself. But what I actually find with business owners is they give themselves money when their account gets low. What I want all business owners to do is actually pay themselves as though they’re an employee. That doesn’t necessarily mean $1000 on the 30th.

I get $1000 because maybe it costs me $2,000 in terms of my personal expenses. But I would say first sitting down and thinking about like, what’s the paycheck that you actually need to cover your, let’s just start, with your like minimum household expenses? I generally talk about it with business owners as like bronze, silver, gold. And so your bronze budget might be something that like, I know that all of my lights will still be on. I will have a roof over my head. What does that look like? Then going up a step up from there, especially if we’re tying it back to goals and saying, you know, do you desire to save more money? Do you desire to travel more? Maybe you wanna be able to invest more money in your like solo 401k, or you wanna open up a solo 401k or a Roth IRA.

What does that look like in your silver budget? And then what does that look like in your gold budget? So kind of having like three tiers. So you’re able to think about over time, what does it look like for you to be able to pay yourself? So that’s one level of where I start with clients, but then that also informs, I would say, on the business, like how you can set revenue goals. So you can really think about if I desire to pay myself $5,000 a month, what does that need? I mean, I need to be making in my business annually or on average per month so that I can pay myself consistently $5,000 a month.

Rob:  Yeah. These are really good questions to think about. Especially when we start talking about paying ourselves because it’s not just as simple as writing a check for $5,000. There’s taxes; there’s self-employment taxes that have to be paid and all of that. And so I have a feeling I know, you know, you’re gonna say, it’s never too soon to start planning this out, but you know, if I’m starting out as a copywriter, maybe I don’t have that consistent flow of clients yet. Should I still be paying myself a thousand dollars a month, or do I need to make sure that, you know, the money is going to be there before I commit to that? Or, or maybe, you know, the number is higher, you know, maybe it should be $5,000 a month or, or does committing to it help me create it, or should I make sure that I have it before I commit?

Keina:  Yeah. I think you have to know your numbers, right? And knowing where you are currently in your business, I can speak to where I was when I first started my business. Of course, I couldn’t pay myself $1000 a month because most of my money was going back into my business for expenses and overhead. What I would say is really important in the beginning of your business to establish some financial systems. So, even if you are, you end up kind of like reinvesting money into your business, you are setting up a structure. That’s going to help you as you continue to make more money, so I use a very loose kind of profit first structure in my business. I think about every single dollar that’s coming into my business, that, you know, it has a job. That dollar is not just for my paycheck, that dollar isn’t just for taxes, that dollar isn’t just for savings or business expenses.

I think about every single dollar that comes into my business, I put like 20% into a tax bucket. I put a certain amount into savings, a certain amount into my business expenses and then a certain amount into a bucket to pay myself. So in the beginning of my business, like the, there was no paying myself that was usually just going back into my business, but it was just getting into that habit. And then at the same time, I had a job that was actually making sure that I was, um, paying my actual, like personal expenses because I tracked my business income over time and, and was separating it in those buckets, what it allowed me to see was when it was going to be appropriate for me to start paying myself even, you know, I think I started paying myself like $500 a month, just so I could feel like I was getting a reward for working. And then eventually it also helped me see when I could leave my full-time job and just work for myself and really created space for me to build up an emergency fund on the business side. So I could safely transition to paying myself consistently and not being worried about missing a pay.

Kira:  Could you talk more about that? Because a lot of copywriters we know when they’re in that transition sometimes, I mean, it’s scary to leave your job and jump fully into the business, but what else could we think about or do before we make that leap? So we feel confident that we can pay ourselves. I know for me, it was more like a gut feeling, but that’s not always the best way to do it.

Keina:  Yeah, for me, it was definitely, I’m a safety girl here, and I wanted to make sure that on my personal finance side, I actually had like three months of personal expenses saved. But then in this, I also had like three months of a paycheck saved to pay myself. So on my personal side, it was like I had $15,000 in an emergency fund. But then also on the business side, I had $15,000 just in money that I could pay myself that had nothing to do with my expenses. So I had separated that out. And for me, like that was my tell sign that I could leave my full-time job. Because I knew that I had some financial security on both my business side and also on my personal side, as people are leaving full-time jobs, the things that I think that sometimes we don’t consider because they may not be as tangible as the paycheck is to also think about what benefit do you have at your job that you may now need to pay for as a business owner?

The first one that comes up for me is healthcare, both medical and like looking at dental. And those are two pretty pricey things, especially if you’re someone who has underlying health conditions. And I always tell people before they’re leaving their jobs full time to run numbers and know like, how much are you going to have to pay in healthcare per month? Especially if you don’t have a partner that can then enroll you under their insurance policies and, and even start planning for things of that nature, because that could easily be another $700 or $800 a month that you haven’t thought about that you now have to assume the cost of that. Another benefit that I don’t think that we oftentimes talk about is like, if you have a job where your employer is paying into your 401k or a 403 B, whatever that looks like. It’s even if you can’t immediately start saving towards retirement in your business, still want people to have a plan for it and have it on your radar. Because I think if you make it a priority, then it’ll become something that you will eventually start to pay into overtime, because you’re like, put it on your radar. That being able to pay yourself for your retirement is a goal. And so when you actually do make, you know, enough money in your business, whatever enough is a, a very arbitrary word to use here, but you’ll have money to be able to set aside into a step IRA or a solo, 401k, whatever vehicle you decide to use.

Rob:  Yeah. Let’s talk a little bit more about investing because, you know, now you’re starting to talk about some of the other things that we can do with our money. Once we reach that particular plateau, we’re paying ourselves; we’re hopefully covering things like basic expenses and healthcare, dental, that sort of thing. But now maybe we’ve got a little bit more money. Where should we start with investing? And what are, you know, two or three of the kinds of investments that we ought to be thinking about?

Keina:  Yeah, so personally I’m a financial coach, so I actually work with an advisor, a financial advisor that manages all of my investments. And so I can tell you from my personal conversation here, because I don’t do investments, is that the first thing I decided to do was to actually set up a step IRA with my advisor. And so a SEP IRA allowed me to put in a certain percentage of my business income,  a percentage of the amount of the money that I pay myself. And I could prioritize that as a business owner. What it looked like for me was I wanna say I pay myself about 30 to 40% of what I bring in every single month, but then of that 30 to 40%, the commitment that I made myself was to make sure that 15% of that went into my SEP IRA.

Then after you do a SEP IRA, another thing that you may wanna consider is doing a solo 401k. And so a solo 401k can help you actually contribute more money because what you get to take advantage of is that you can contribute up to like on the personal side, there’s a, there’s an annual max that you are probably familiar with at your job. I think this year it’s $20,500. But then also on the employee-employer side, you can contribute a certain amount of money. So it might actually allow you, especially if you’re not paying yourself that much, in terms of like profitability, it might actually allow you to put more into retirement, then a set buyer, a might. And then I would say, third, you can also look at if neither one of those options kind of sit well with you right now, both of those options give you some tax advantages there that I should say are like, pre-tax advantage another option that you may wanna partake in is doing a Roth IRA as well.

But definitely, for me, my personal strategy is to work with a financial advisor to kind of forecast, like, do I wanna be when I wanna retire? And what are the investment vehicles that are gonna be best for me to take advantage of? But I know with my advisor, one of the things we actually talked about in the very beginning, she’s like, you know, if a Roth IRA makes more sense for you right now, because you don’t feel like you’re gonna be able to put that much money into one of the other investment vehicles, we could just start there. But I would just say like start having that conversation with an advisor that maybe you have a relationship with and that you trust.

Kira:  How do you look at the other investments back in your business? How do you view and make those decisions around, okay, should I invest in, and you know, working with a coach or taking this course to grow my business, how do you approach all of that?

Keina:  One of the things I tell people to do is to make like a hell no, and a hell yes investment list first. So really thinking about, you know, let’s think about the last six months to last 12 months in your business, like, where would you, when you think about the investments you’ve made, what are your hell yes. Investments like you would hands down, invest in, you know, that one-to-one coach again, maybe your hell no investment is like, oh my goodness. I know for me, it was realizing that I bought a Pinterest program because I was sure that Pinterest was going to be the thing that helped my business skyrocket. Um, but kind of knowing 1) what is your investment style. And the reason I say that is because I think mindset has a lot to do with it.

Oftentimes what I have found for myself and for my clients is that we choose to invest in stuff out of lack and scarcity. So sometimes when we’re feeling really graspy, like things aren’t working in our business, maybe there’s a dip in revenue. And so then you start going to like, oh my goodness. Maybe if I just hired this copywriter, or if I hired someone to use my social media or whatever it is like, that would be the thing that would make my business take off. And so you’re not looking at it from a productivity standpoint, maybe or something. And like, if I hired a copywriter that would, you know, outsource two or three hours of work for me a week. And so now, with that two to three hours of work, I would actually be able to focus on another area of my business that would allow me to generate more revenue.

I always pay attention. Like I said, mindset because you could do the same action, but you can have a different thought driving the action that then impacts your investment style. In terms of like an actual, Hey, I want the tangible, like how do I make sure that I have money to make this investment? There are like two suggestions that I have there. You may decide, Hey, 10% of everything comes into my business. I’m gonna put it into a bank account that’s just called “investments.” So when I wanna make an investment in my business, I have that money ready to go. Or if you already know that, you know, within the next six months or within the next year, maybe I wanna do a website refresh, or I know I wanna invest in that coach and I know exactly how much the coach is then can work that into your overall budget. So you’re putting money aside each month, you’ll have the money to invest with that particular person. Or it doesn’t even have to be approached by a person. It could be a program or software or whatever that may look like for you.

Rob:  So Keina, we haven’t talked about debt and I know this is something that a lot of people are struggling with. You know, we’ve talked with copywriters who have, you know, as much as six figures in student debt, you know, or others who are paying more on their student debt than they say on their housing or other stuff. Obviously, you know, we wanna pay down debt as quickly as we can, but can we talk a little bit about that and where debt should fit as a priority in, you know, money and investing? Does debt need to be paid off before we invest? Like how do we balance?

Keina:  That? I think it’s both. And, um, cuz if you’re not investing, you are potentially leaving money on the table because of compound interest. And really, I mean, like I also don’t wanna say that there’s no blanket approach here. I think something like student loans, generally speaking, you have a lower interest rate. So like, do you need to prioritize them? I know for myself when I had student loan debt, I just considered like, Hey, me and Sally Mae, we’re gonna be in a relationship for however long we’re in a relationship. So I’m just gonna make a little bit more money so she can be paid. And I don’t have to like to think about her and it doesn’t have to take up mental space. And that was, that was my approach. Then I think, like I said, in terms of investing and, and paying off debt, which to do first? I always encourage people to have both approaches.

Like I’m thinking about if you have consumer debt, for instance, on the personal side, if you’re not if you’re just aggressively paying down debt, but you’re not actually saving money, what can happen is that you may not have identified the reason that you’re in debt. And one of the reasons you may be in debt is because you don’t have any savings. So if your car breaks down, you can’t actually fix your car because you don’t have any money in savings. So that’s where I would say having an auto maintenance fund makes a lot of sense, even if you’re putting $50 a month into it because if something happens to your car, you’re gonna have money that you can pull from that allows you to get your car fixed without adding to your overall credit card debt. And just like thinking thoughtfully about that on the personal side.

I also think that on the business side, people also have debt, and I know I’ve used credit cards in my business to pay for coaching. I’m very mindful of what I’m doing. If I’m using credit card debt and really making sure that I’m aware of like, what is that? What is the return on investment that I’m expecting? And like, do I know my cash flow and, and profitability in terms of like, when I’m expecting to pay that debt off, I don’t have a really big mantra that like debt is bad. I think that in the world, there are wealthy people that actually use debt a lot to acquire other things. So it’s really thinking about how you manage junior debt, but then also like, how are you preparing yourself in terms of savings? So you’re not getting into more debt.

Kira:  I feel like there are a lot of stories we tell ourselves around money. And so, you know, I feel like we each have that story. And for some, it could be, you know, I’m really great at making money, but I’m not great at managing it, or I’m great at making it, but I can’t save it. If we’re caught up in a story, how would you work through that? Or how do you help your clients when you find out they’re really caught up in this story and this loop and they can’t get out of it, even if you can give them all the tools in the world they’re stuck?

Keina:  Yeah. I wanna know, like, what are the facts? Right. Like I used to be a math teacher when I was a teacher, and I used to tell people, my kids, those are the people you’re not allowed to say that you’re not good at math. You would never tell anyone you couldn’t read. And more so, just kind of thinking about where does that story come from? Right? And being able to insert a new thought, like I’m learning how to manage my money. Being able to put that at the forefront, I think, is going to help everything shift so that when you’re looking for evidence of managing your money. You’re gonna start looking for the evidence that aligns with the thought I’m learning how to manage my money versus looking for the evidence that aligns with: I’m not good with managing my money.

Rob:  Is that always the approach? I think about another money story that I hear a lot of people tell themselves, and that is that work is supposed to be hard. And therefore, if something’s easy, I can’t charge very much money for it. Again, is this a thing where it’s like, okay, we need to look for the facts, or, can we just simply say to some of these beliefs they’re just not true, and we need to get past them?

Keina:  I mean, definitely to that point, right? Like, I think for that belief specifically is when I’m working with clients, I’m also helping them see the purpose of money in their life. And so I’ve had that story of like, I shouldn’t charge a lot of money for that, but it’s being able to identify like, what is the root of that thought? And when you think about like, you know, even earlier, when I was talking about thinking how much you wanna pay yourself, and so what does that mean in terms of like how much money your business needs to create and generate? When you start looking at the facts of, okay, if you wanna charge people a $100 dollars for something that takes you five hours to do, how many people are you gonna have to work with to actually pay yourself, let’s say $60,000 a year because the facts are that you would wanna make $120,000 minimum in your business?

And so do you actually wanna do work with that many people to create generate $120,000? So really just helping, I think people break down; what does that actually mean to not charge people a lot of money? What’s the value, like being able to really just break down the value of like what’s a dollar in your life? What does that actually mean? And being able, I think it’s still going to the facts, but it’s being able to play around with people’s thoughts and helping them think about what could also be true.

Kira:  Is there anything else we could do if we know what we want to start charging more and kind of, you know, reach that next level in our business? Are there any other exercises we could walk through to help us get to that point where we feel comfortable throwing out, you know, a higher rate for our services?

Keina:  Yeah. I would say like, listen to what your clients are saying about the great work that you do, listen for the value that you’re bringing and really sell yourself on why your services are worth more and think about what happens if you doubled your prices where they currently are in their business? Like would you be able to work with your top clients instead of maybe having to choose from all the clients? But just, really being able to play with numbers for yourself.

Rob:  Tina, I am curious, you know, when somebody comes to you to be coached, you know, maybe they, you know, need to get it out data or they wanna invest more – there are, I’m sure, a myriad of reasons why. How often is the solution cutting versus earning more? I guess, you know, it’s like, okay, I’m in the situation that I’m in, probably because I don’t have enough for what I think I need to be spending on whatever. So obviously increasing, you know, doubling my income could solve some of those problems maybe. But how, how do you balance that?

Keina:  I would say, generally speaking, it’s both. And because I think we can talk about all the things, you can cut, or I think we can talk about the ways that you can create money. And so first, like with my approach, it’s just meeting people where they are and seeing what actually is happening. I would say naturally, just kind of how I lead and walk clients through. We’re able to see whether we’re looking at personal expense expenses or even business expenses. Like, do you actually realize what you’re paying for? I think people sometimes don’t know the things that they’ve said yes to. And so now naturally there are things that you’re like, oh, I don’t wanna keep this. I wanna cancel it. One of the exercises I do is, like, going through your expenses and deciding what do you wanna keep? What do you wanna cancel? And what do you wanna revisit? So I would say like that’s one side and then, um, being able to also look at, like, if we see that you, um, are maybe overspending, then being able to identify, what is the financial gap? How much more would you need to be making in order to fill this gap for where you actually desire to be?

Kira:  What changes, if anything changes when you start to think about growing a team and you start adding these team members, you know, whether they’re part-time contractors or not, is there anything new that we need to factor in when we think about that type of growth?

Keina:  I mean, I would say making sure that you can pay them once again, going back to looking at your business expenses, if you are looking to bring on a VA or, you know, some, a podcast editor, whatever that is. And you know, that’s, that’s going to be a $1000 a month expense or $500 a month expense, can you start paying yourself like that or saving that amount of money every single month? So, you know, that it’s an expense that you can afford as you start to think about bringing on employees, especially as you’re building more of a team and not really just thinking about being a solopreneur, also thinking about it, are there benefits that you wanna offer the people that are working for you and, and with that usually comes, comes more financial responsibility and just being able to make sure that we’re, you’re monitoring your cash flow so that you know, that, you know, even in slow months of business, I’m still able to pay my team, whether that’s three months or six months or nine months, just really being able to know your financials, know your numbers in a way that you’re able to forecast that out and, and not just solely looking at your numbers as what can this money do for me this month.

Rob:  So one of the things I love about your story Keina is the concept of the money dates that you talk about. I’m curious if you could walk us through that idea where you’re, you’re basically having a date with your money-self, right? Like share that story and maybe help us make that idea work for us.

Keina:  Yeah. I think having a money date is really about understanding that you wanna have a proactive relationship with your finances, business or personal, and committing to it. I tell business owners whether you wanna have a Money Monday or a Financial Friday, being able to dedicate that time to look at your QuickBooks and make sure that you’re updating QuickBooks or whatever accounting software you have. Looking at outstanding invoices or being able to keep track of clients that you know, are coming in the next couple of weeks or months. And, and being able to kind of update, like I know for my business, I keep a spreadsheet of like clients that I’m forecasting out or like clients that I know are going to be paying me. And that helps me just have a pulse on what the kind of my average, actual vs. projected revenue for a specific month, but even I can look at quarters there.

Another thing that I encourage people to do on money dates,  I personally have shared with you guys that I have a loose profit-first structure in my business. And so I would say twice a month, I try not to do it every week just for QuickBooks purposes and like reconciling my accounts, but any revenue that’s come in, I make sure that I allocate it to different buckets for taxes. I allocate for savings. I allocate for expenses and owners pay and just really make sure that I have a pulse on like, what is the money in my account for? And being able to also, you know, set other revenue goals maybe for the next month, or even looking like the next quarter out

Kira:  For someone listening to you speak about this, it’s not new, but they haven’t focused on it, they’re not having the money dates, what are some initial steps? Just like the baby steps to help them? Of course, they could work with someone like you, and that would help dramatically. But if they’re not quite ready for that, you know, is it just sitting down and just like opening up, opening up FreshBooks, opening up the accounts? Um, how could they inch towards the dream for financial management?

Keina:  Yeah, I’m thinking about like, what’s one thing you wanna achieve in the next 30 days? Like, make it doable for you. I think oftentimes we come from an all or nothing approach where, you know, if we’re gonna sit down with our numbers, it needs to be this two or three-hour extravaganza, which I don’t subscribe to. Cuz that sounds really overwhelming. And it’s a reason you haven’t gotten started, but really thinking about how can I use 10 minutes today to get me closer to my goal. So maybe I would say for some business owners, it’s as simple as separating their personal and business finances. And maybe your goal in the next 30 days is to make sure that you have business accounts open for yourself, maybe in the next 30 days, it’s to make sure that you are paying yourself consistently. So maybe you’re gonna, you know, set up an auto-transfer from your business account to happen on the 15th and the 13th that simulates a paycheck to your personal side. So really just thinking for you, what’s like a, a milestone that you desire to hit and how can you set a goal to do something in the next 30 days and be able to work on that in, you know, 10 to 15 minutes a week,

Rob:  Do you recommend that we create and live on a budget? And if so, how strict should that budget be?

Keina:  I do support budgeting. I don’t know that I would say like – I don’t know what, what do you actually mean by how strict the budget should be?

Rob:  The reason I ask is I have struggled with this, you know and I think probably a lot of businesses struggle with this too. You know, if you sit down and say, okay, we have, you know, $500 for food and $100 dollars for automotive or you know, this much for a house payment, whatever. And then when things come up suddenly, you know, there’s not enough in one budget category and you know, enough of those exceptions start to happen and the budget kind of falls apart and, you know, to restart you kind of feel like you’re starting over. So I’m curious about your approach and how you make that work? Not just from a personal standpoint, but also from a business standpoint, because in business, you know, expenses are coming up, they’re always changing, especially in businesses like ours. Yeah, so I’m curious how you make that work, you know, again with a tight budget, if that is how you would define it or if it has to be loose?

Keina:  Yeah. I don’t, I don’t wanna use either one of those words cuz I dislike them. Um, and I feel like that’s the reason people don’t want to budget.

Rob:  Totally fair. And maybe that’s why I’m so bad at it, right?

Keina:  But I actually just recorded a podcast on my podcast about this, which was like managing the secret is to manage your budget proactively. So like, yes, set a budget, right? Think about what’s true. But also understand that your budget and I call it a spending plan, cuz it’s really a plan for how you wanna spend your money. But your spending plan is going to be flexible. It’s a living document, and of course, things are gonna come up because you’re an adult and apparently that’s what we subscribed to. And so when I talk about being proactive, let’s say you said you wanted to spend $500 this month on groceries. If I went to the grocery store and, you know, I’ve spent $200 this week, like how are you accounting for the fact that you’ve spent $200 and technically speaking, you have $300 left, right? But just, it’s being able to monitor your spending habits because sometimes the conversation is just about being aware.

If you’re aware throughout the month, then you can say, oh, well, you know, this week, let me actually make sure I eat all the groceries that are in my refrigerator. Cuz I would find even with myself, sometimes I go to the grocery store, I’m hungry and I’ve bought a lot of food, but then I’m wasting the food. So it’s me having this awareness of my spending habits, my patterns, and realizing that that’s going to support me. And hopefully being in closer alignment with my budget, if I’m going over the budget, there’s a couple things that I would tell anyone to consider. One is your budget realistic because I have a client, I wanna say she put like $250 for groceries. And I looked at her and I was like, you know, that’s not realistic. Not because I’m like a negative Nancy, but like, let’s just be honest.

You know, like groceries are expensive. We both live in the DC area. That’s just not, I mean, I don’t know what you’re eating and so she wanted to try it out. So she tried it out for, you know, a couple of weeks. And so what I’m telling her to pay attention to is like, look, it looks like you’re spending $80 here. You’re going back. You’re spending another $30 here. So sometimes it’s a matter of not living on a strict budget, but more so the fact that we need to come back and realign so that numbers actually make sense. And you might have another, another category where you’re like, oh, you know, I did overspend my grocery budget, but I’m gonna take it off some other area of a, of an expense that I’m not actually using right now. And I also know that it’s not going to impact something later on down the road.

So I just want everybody to hear that budgets can be flexible. And like when you’re proactively managing your money, you’re going to also see what your patterns are, where you want to adjust and be able to have a budget that ultimately, I would say, brings you joy and that you feel really confident with. And then on the business side, I still have a budget on my business side as well, because I want, especially as business owners, I think there are so many $10 subscriptions you signed up for that you think you ultimately need, but you don’t. Or you forgot you, you know, paid for Trello or Asana and you’re not using that anymore because you moved to ClickUp or whatever that kind of looks like for you. So being able to have a budget, being able to look at your bank statements, your credit card statements in your business is going to allow you to see where your money is going. To kind of account for not only monthly expenses but also thinking about, you know, you have a Showit website or you know, whoever Wix, Squarespace they host your website.

How much are you spending annually with them? You have something like Dubsado. How much is that annually? So you can really start to be more in control and be more planned. 

Kira:  I feel like I need to go through all of my subscriptions after this conversation so I can cancel all the ones I’m not using and currently spending money on. Yeah.

Keina:  Cause like you’re like, oh it’s $10. And like no $10 is not going to make or break you. But, but it’s being like, it’s what I was saying earlier about Rob, you asking me something about, do I make people, you know, spend less money? But at the end of the day, you’re saying I’m not using this, so if you’re not using it, just cancel it.

Kira:  Yes. Okay. So how do you recommend we approach money conversations? You know, it could be for people who aren’t as comfortable talking about money and they’re just getting into this space, talking about it with their partner, you know, their life partner or talking about it, I mean, in our case, we’re Rob and I are business partners, for the two of us to talk about it. Do you have any best practices that you recommend when it goes beyond the individual and becomes a bigger conversation?

Keina:  I mean, I can tell you like with partners that I work with, partners on the personal finance side, when people are like talking about money, I think the exercise of like, Hey, where do you wanna be when you’re 80 or where do you wanna be in five years from now a year from now, six months? I think that that leverages the playing field. Oftentimes we talk about it when we’re frustrated. And so money becomes like the thing that you only talk about when we don’t have enough, but really being able to talk about it from a space where you’re dreaming seems to break the ice. And so knowing that, that we have, like, there are like shared goals and we have a shared vision. Now you’re able to say like, oh, you have a goal of paying off your credit card debt.

How can I support you with that? Or like we have a goal to travel more. How can we support each other with that? So we’re having a different type of money conversation than, oh my goodness, you spent this much money. And I would say the same is true. Even on the business side. Right. It’s like thinking about what are the goals? And what are the milestones that we wanna hit within, you know, a three-year timeframe, one-year timeframe, a six-month timeframe? So what do we need to check in on? And when we think about our financials, where do we wanna be able to hold each other? Like not even accountable, I’m careful with my words, but I think accountability is in there, but just being able to let that other person know that you’re there to support them.

Rob:  What about tools, Keina? I know there are probably as many tools as there are ideas about investing and budgeting and all of that, but what tools do you recommend we use to do some of this stuff?

Keina:  Yeah. I just use Google Sheets, but I would say if I had to recommend an app or a program that people wanna use, You Need a Budget or YNAB. I think is probably the only one that I’d really recommend in terms of having a budget. And the reason is that you can use it on your business side or on your personal side even, but the reason I like their platform is because I believe in a zero-based budgeting approach. So being able to account and give every single dollar a name, so it’s not just helping you track your expenses and how much money went out. But so you can kind of see in real-time, you know, I have $4,000 in my account, but I can tell you exactly what that $4,000 is for. I personally have grown to love QuickBooks online for my accounting and have found that it’s really clear and easy after I got over the initial hump that I shouldn’t just use a spreadsheet for my accounting. Um, especially as someone who’s like running more of a six-figure business, a multiple six-figure business and like just wanting everything to be in one place. So it can easily be sent over at the end of the year to my accountant.

Kira:  What type of growth do you like to see for your clients year over year? Like how can we think about that type of growth if we want healthy growth? And I guess how do you advise your clients around thinking about the growth of their business?

Keina:  I would say like the growth of your business, being able to know that like 1) your overall income is increasing, but then like your profitability is there. And when I say profitability, I mean, like you being able to know tangibly in your business accounts like I have business reserves. I can, if I wanted to, take off of my business, I could do that without being really stressed about income. If you know something, I mean, we’re still in the middle of a pandemic, but if the entire world’s shut down again, right? And there’s the pivots that happen naturally with that, that I have reserves to start sustaining my business? But I would say definitely I look at it very much. So from a saving standpoint and do you have, you know, a month of expenses? Not only to pay for your expenses but also to pay yourself or pay your team? And so then it’s at, you know, after a month, two months, three months and eventually you’d probably want at least a year of income within your business to think about like we are a profitable business that’s able to take care of itself financially.

Rob:  So let’s say I’ve been listening to this discussion, and I haven’t been serious about money or budgeting in the past, but I’m thinking, okay, maybe it’s time. What are some first steps that you would recommend so that we don’t bite off more than we can chew and give up. But we can actually make some progress?

Keina:  Yeah. Um, earlier, I was saying, make sure that your personal and your business finances are separated, then I would tell you another great step you could do is like pull your numbers for the last 12 months and actually look at your revenue and see what do you make on average per month then after you figure out how much you make on average, being able to actually sit down and see how much does it cost to run your business per month. If you go into QuickBooks, you could easily pull that. Or you could also take a stab at just making a budget for your business. So you can see the average amount of money that you make per month. What percentage of that are you actually using towards business expenses? I generally would say, especially for your audience, that it shouldn’t be probably more than 30% of your overall revenue per month that you are using towards your business expenses. So I think that could be just a great place for you to start because then you could work on getting some of your expenses down if need be. If it’s not at 30% yet, you could also think about like, how do I wanna use that other percentage to support my business and do some of those things that we talked about earlier in the podcast, like maybe you wanna do invest in a team or you wanna invest in your own professional development and growth.

Rob:  And just to be clear, you’re not including what we’re paying ourselves as one of those expenses, right?

Keina:  No

Rob:  That’s separate from business expenses, OK.

Kira:  Uh, I wanna shift gears here and talk a little bit about your time management just because I’m always curious how other business owners manage their time. What does a typical day, or, you know, if easier just a week look like? How are you managing your time while in your business today?

Keina:  Um, that’s a really good question because I don’t feel like I’m the best at time management.

Kira:  I’m just nosy. So even if you’re not doing it well, I just wanna hear about it.

Keina:  Mainly because it’s just me, and I play every department in my business. So, currently, my client days are Tuesday, Wednesday, Thursday. So I’m like, those are when I meet one-to-one with clients. And then I have Mondays and Fridays kind of like admin days or that’s when I actually do consults for new clients. And when I’m doing content creation. I mean, my typical day is like, usually about nine to four. And I would say on Fridays, that’s questionable. I probably end about 12, but yeah, like it’s, I would say I’m always open to experimenting with my calendar. I’m able to talk to you today because like today is actually one of my CEO days that I have started to institute into my schedule more intentionally. So, you know, all those things that come up for you while you may be working with a client where you’re like, oh, I should change this? Or should I, you know, put the time in my calendar to think about this? I am creating a more predictable structure where I at least have, you know, two or three days a month that I can, that may be a, on a typical client day where I can just focus and be in my business and, and get my juices flowing.

Kira:  And what’s coming up for you next? What are you excited about what’s happening in your business?

Keina:  I mean, I feel like my business is pretty much on autopilot right now. I am just living in my one-to-one coaching space. I’m working on a webinar for, you know, my audience, just to help them understand that money is easy and money is simple and actually building out my podcast. And then sometime later this year, I’m gonna go into group coaching.

Rob:  Awesome. If somebody is listening, thinking, okay, I wanna check out that webinar, or I want to be on your email list Keina or even the future group coaching programs, where should they go and what do they need to do?

Keina:  Yeah, I would say follow me on Instagram. So if you follow me on Instagram, I’m @weathovernow.

Kira:  All right. Thank you so much. Keina for sharing all your insights with us today. This definitely was a conversation I needed. There’s a lot of improvement in this area for me. So thanks for being here today.

Keina:  You’re welcome. Thanks for having me.

Rob:  Thanks.