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Mindful Money Checklist: 10 Things Successful People Always Do

Brittney Castro
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Photo by Michela Ravasio

Money Mondays is a new series focused on the intersection of finances and well-being. We believe money is one of the last taboos in the wellness world: Why is it that we can talk about our sex lives and not our salaries? With an underlying drive to empower, we’re aiming to address all your burning questions about making money (and making more), saving it, spending it, but most of all how to use it to power the life of your dreams.

When I started my financial planning career over 11 years ago, I quickly learned that the people who were financially successful were the ones who dedicated the time and energy to regularly budgeting, managing, and planning out their finances. In other words, they had the discipline to go get a financial education and continue to expand that education over their lifetime.

A financial education is something almost no one receives growing up, and yet it’s one of the primary components of financial success. If you’re new to personal finance or simply looking for ways to expand your financial knowledge, here are 10 easy steps to gain the education you need:

1. Schedule weekly money dates.

Studies show that millionaires spend, on average, 8.4 hours a month managing and planning out their finances, according to the The Millionaire Next Door by Thomas J. Stanley. While many people say they want to be millionaires, most also don’t devote the time and energy necessary to making it happen. So don’t make that mistake. Instead, set up a recurring event in your calendar for a weekly money date and allocate at least one hour a week to your finances. During your money date, you should update your budget, review any upcoming expenses, pay bills (although you should automate those as much as possible), review your accounts for accuracy and handle any other pressing financial matters.

Make your money dates as fun as possible—listen to music, dance, light candles, or do anything else that makes the personal finance process fun for you. Because the more fun it is, the more likely it is that you’ll continue to do it—and consistency is what counts.

2. Commit to reading about personal finance for 20 minutes a week.

Don’t try to learn everything about personal finance all at once. Instead, break up your financial education into digestible chunks. Allocate 20 minutes a week (as part of or in addition to your money date), and read about personal finance topics. Choose one topic a week and read about just that topic until you understand it, then move on to something else.

3. Talk to people you look up to.

As you begin to learn about personal finance topics such as spending, saving, credit, debt, investing, retirement strategies, etc., begin to apply what you learn by talking about it with those you admire. I find that there is a lot of financial "chatter" out there and also that most of what your friends and family members know about money is wrong.

So instead, talk to your mentors and other entrepreneurs you know who are successful in their financial lives. Ask them about their successes and failures. Just like in business, I’ve found I can avoid a lot of financial mishaps by learning from the mistakes of others. Also, note that talking about money is still a sensitive subject for many people, so start small and work your way into more in-depth conversations. Be respectful of what people share with you, and always thank them for their advice.

4. Test out different money management strategies in your own life.

Most entrepreneurs realize that the best way to learn whether a business idea will work or not is to test it out. This same philosophy is true with your personal finances. I constantly remind my clients that some financial strategies work better for some people as opposed to others. Take budgeting, for example. There are tons of systems and programs out there to help you budget your monthly income and expenses, but you won’t know what works best for you until you try them. I did this in my own life. I tested lots of budgeting systems until I finally realized that the good old Excel spreadsheet I custom-designed for myself works best for me. But I had to try many other options to come to this conclusion. Until you try something, you won’t know if it’s right—or not—for you.

5. Know your magic monthly money number.

This is the gross revenue you need to produce every month in order to reach your business goals and support your personal income needs. When you can get clear about how much income you need every month to support your ideal lifestyle and fund your financial goals, you can reverse engineer this number into your business finances to come up with your magic number—i.e., the gross revenue you need to make from your business. Most business owners never get clear about this number and end up becoming slaves to their business, only to realize they aren’t getting paid enough to maintain the life they desire. Clarity is king, and reviewing your magic number year after year (or even monthly) will ensure that your business grows in the direction that ultimately supports your ideal life vision.

6. Separate your business from your personal bank account.

As an entrepreneur, you must separate your business finances from your personal finances. Make sure you set up business checking and saving accounts and run all your business income and expenses from them. If you are just starting out and operating as a sole proprietor, then transfer money from your business checking account to your personal checking account every month as if it was a paycheck.

If you are established as an LLC, S Corp, C Corp or other entity, then work with your CPA and bookkeeper to make sure you are paying yourself an income every month, either in the form of a paycheck or business distribution. Do not commingle your funds—separate them to give yourself clarity about what money is what.

7. Build a cash cushion.

It is important to have a cash cushion of three to six months of your core expenses in cash. This is to help cover any unexpected expenses that come up in your personal life. As an entrepreneur, you may decide to build a larger cash cushion of six to 12 months of your core expenses to help cover your income needs should you have volatile business cash flow. Cash gives you the flexibility to stress less, even with the ebbs and flows of business cycles, and also not rely on debt or long-term investments to cover your short-term needs.

8. Pay off your debts.

A lot of entrepreneurs create debt when they start their businesses, so it’s wise to have a debt reduction plan if this is the case. Get clear on all the debt you have and write out the type, amount, interest rate, and minimum payment. Then review your personal budget to figure out how much you can add toward additional debt payments every month. You can start by paying more toward the debt with the lowest balance while paying the minimums on the rest. While this may not save you the most interest right away, it allows for a more immediate win, which can then motivate you for the rest of the debt reduction plan. Once that debt is completely paid off, switch to the debt with the highest interest rate and add the additional debt payments toward this debt while paying the minimums on the rest. Once that debt is paid off, switch to the debt with the next highest interest rate. Continue this strategy until all of your debts are paid off.

9. Save for retirement outside of your business.

Do not make the mistake of having all your eggs in one basket. Most business owners have no other investments outside of their businesses, and therefore end up working until they die, only to leave behind a business that’s no longer sustainable because they did not have the proper business succession plan in place.

Be wise and set up your business retirement accounts to make sure you have diversity in your retirement plan. Depending on your business structure, you can set up a SEP IRA, Simple IRA, Individual K, 401(k) plan, or other retirement plan. Then make sure you work with an attorney to also set up a business succession plan that can carry out your wishes for the business once you’ve passed away. You work so hard to build a business you love, so make sure you take time to proactively plan out your retirement strategy and succession plan so that your business ultimately supports your overall life vision.

10. Hire help.

At the end of the day, everyone needs professional help from time to time. A Certified Financial Planner® can help you strategize and figure out the best game plan to reach all your personal financial goals. He or she can also educate you about your options and help you grow your business in a way that supports those personal goals.

As with any other professional, make sure you find someone you like and trust, who also has experience working with clients just like you. You may have to meet with several planners until you find the right fit, but take your time, since once you find it, you can work with this person for the long haul and really build a lasting relationship to help you grow financially year after year.

Remember, regardless of where you are on your financial journey, dedication and commitment to continued financial education are key. True mastery of any subject comes from constant practice, training, and sharpening your craft. Make sure you continue to devote the time and energy to your personal finances throughout your lifetime.

Want to get out of debt? Here are four simple steps. If you're looking to quit your job and go on sabbatical, this is your guide.

Brittney Castro author page.
Brittney Castro

Brittney Castro, CFP®, AAMS®, CRPC® is the founder and CEO of Financially Wise Women, a Los Angeles-based financial planning firm whose mission is to teach women and couples the art of managing their money the fun and simple way. As a Certified Financial Planner™, Chartered Retirement Planning Counselor, Accredited Asset Management Specialist, entrepreneur and speaker, Brittney works with busy professional women and couples who are ready to make their finances work for them and use their money to live the lives of their dreams.