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Never say the B-word

Never say the B-word

May 31, 20232 min read

Personally, I gain and lose the same 10 pounds over and over….and have been within 20 pounds of my high school graduation weight for my entire adult life. When clothing gets a bit snug, I refuse to buy a larger size.

Note that I did not use the word “diet” or refer to the choice as being an all-or-nothing proposition. That’s because the words we use, even to ourselves, are important and none of us like to feel restricted. It sets me up for success to reframe the process as following an eating plan and knowing that food is restricted rather than taboo.

This approach manages finances in our e-commerce businesses as well. Never use the word “budget,” but instead refer to it as a spending plan. I know how many calories I can consume in a day and can spend them however I wish – ditto for a spending plan. A budget feels restrictive, while a spending plan puts you in the drivers seat by providing choices.

A major difference between a spending plan and an eating plan: We can’t “bank” calories to plan ahead for a big blowout on vacation. But with a spending plan, I can set aside funds to handle big expenses.

An analogy that clarifies how to do it – Picture funds coming in through various channels as gross wages. If you’ve ever received a paycheck, you know the amount you can actually put in the bank is less than the amount you were actually paid. Taxes and sometimes other things are deducted from the full amount. So you need to do that with monthly business deposits – set aside funds that allow you to pay your income tax bill in full and have a cushion for those times when expenses are higher than income.

For the majority of entrepreneurs, business and personal finances are interwoven – if business is good, they pay themselves more or if the family is going on vacation, they withdraw more, even if the business can’t “afford” it, or they might inject personal funds to cover payroll then struggle to make their personal car payment….

The circumstances and scenarios are endless.

The truth is all of us encounter these types of challenges from time to time. In addition to offering bookkeeping solutions, GoBookkeep provides personal bookkeeping. We understand the unique financial dynamics faced by e-commerce business owners and can help you synergize both business and personal finances.

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