Money Needs a Purpose

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Money Needs a Purpose

When I was an employee, responsible for millions of dollars, when it came to planning for the next year, I would work with my team and we would decide what we wanted to grow and what we wanted to decrease (in expense). However, the bottom line was that the CEO or the Board of Directors told us how much money we had to work with for the upcoming year, and it was usually a percentage increase over the year before. Like 2%; or 3% if it was a growth year. While we felt we had some autonomy, it wasn’t true. We were caught up in a game hosted by others.

As an entrepreneur, there isn’t a random ceiling for earnings established. I am the Board of Directors. I decide how much I want to earn.

When I make my plan, the first thing I do is make a list of all the things that I want the money for. I do it twice. The first is like my corporate days where I take last year’s numbers and add a percentage, such as 10%. That is really for my accountant and budgeting.

The second round is making a list of all the things I want the money for… in my new upgraded life. For example, let’s say I order in pizza every Friday night for dinner. With tax, delivery, and tip, that could be $40 a week. In my new upgraded life, I go out for dinner once a week and share a bottle of wine with my husband. There is candlelight and a linen tablecloth and napkins. Service is attentive and the food is delicious. That dinner is $200 a week if it is just my husband and I, closer to $300 if I bring my daughters. The value of the tip would pay for the pizza dinner.

When you make your money plan, use your ideal life numbers. Get out a piece of paper and do the planning work.

Here is a start:

Car insurance
Health and life insurance
Dry cleaning
Credit card payments
Kids sports
Hair cuts


Add as many categories as you need. Spend some time on this. I have spent a few hours on this each year and will check out the price of a vacation to Paris or an all-inclusive trip to the Mayan Riviera. Instead of a Ford Escape, which I love, I research the payments for a Volvo XC90.

Then make your plan. This is your stretch goal.

By |2018-12-11T04:11:32+00:00February 16th, 2016|business plan, money|0 Comments

About the Author:

Michelle Hamelin provides business consulting and coaching services, working primarily with owners of small businesses. I am a planner by nature, which means I work with you to gather facts, analyze the work, and then help you create a plan to get to your goals.

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