Why do so many people make the same New Year’s resolution year after year?  Because getting up an hour earlier to go for a jog takes more than just willpower, it takes habit building.  Building a habit is a lot like building a muscle – you have to exercise it again and again before it really develops and becomes strong. Think about how much longer it takes to build muscle memory – building a habit that is as easy and routine for your body and lifestyle as driving a car or riding a bicycle takes time.  As a small business coach and money management specialist in San Luis Obispo, I teach my clients techniques to help them build effective financial habits.  These techniques will aid you as you build the habits and develop the muscle memory to do it day after day without even thinking about it.

Put it on your calendar.  This is probably the most important technique on your way to building strong financial habits.  Take things you know you need to do daily, weekly, monthly, quarterly, and annually and put them on your calendar.  While some of the annual and quarterly financial tasks may seem obvious in the moment, like renewing the registration on your car, not everything comes with a reminder in the mail.  What I see happening is that people are busy with their lives and routinely miss important dates when something is in the “out of sight, out of mind” category.  Unfortunately the fallout from missing an important date can come with an expensive price tag.

Too often, I see business owners not doing many of the important daily, weekly, and monthly tasks that would actually have the biggest impact on their financial health.  How often do you do your bookkeeping? How often do you reconcile?  How often do you need to?  I suggest doing your books no less than weekly and reconcile your accounts monthly – this means ALL of your accounts:  checking, savings, and credit cards, personal and business.  So take a look at your calendar and find a time you typically have available and reserve it.  If you start putting it on your calendar to do your bookkeeping every Tuesday at 8am, pretty soon you’ll develop the habit and know without even looking at your calendar where you will be every Tuesday at 8am.   I have found an additional strategy in this regard – if you have trouble getting it done, DO IT FIRST.

Also, limit your accounts.  I have encountered many San Luis Obispo businesses that need help simply because they have too many accounts.  As a result, they don’t keep their records current and aren’t using their cards for the right purposes.  I suggest limiting things like credit card accounts to just 2 for your business and 2 for your personal expenses.  To build the habit of using the right card for the right purpose, start by keeping only one card for business expenses and one card for personal expenses in your wallet.  Leave your other cards at home in a safe place.  If you have trouble identifying your business cards from your personal cards, try putting a sticker on your business cards.  Something as simple as a gold star sticker will catch your attention each time you pull it out to use it.  This will give you a chance to pause and say “Is this really a business expense?”  If not, put the card with the gold star back in your wallet and keep hunting for the right card.  If you have a rewards program with your credit card choose use it as your primary card.  Some business owners buy a lot of meals or fuel.  That would be the one to put in your wallet.  I find that the card I leave at home is the one I actually use the most because I use it for travel, larger ticket items or online purchases.

These tips may seem very simple, but you have to start with the basics to build smart financial habits.  When you’re ready for more advanced techniques, give me a call or click here to request a consultation.  I would love to put my expertise and business savvy to work for you!