Finance Conversations for Home & Work
I learned finance at the kitchen table. My mother worked three jobs for us to live in a “nice neighborhood” and go to school in a “good public school district” in Brooklyn, NY – shoutout to P.S. 233 in District 18, located in the white bastion of East Flatbush, Brooklyn. She knew that if we went to a top-rated school, she would not have to spend extra dollars for after-school programs because we were getting what we needed from our teachers and the curriculum. Yes, I was a latchkey kid and proudly wore my key around my neck!
The one constant that we had in our lives was my mother, older brother, little sister, and I would sit at the kitchen table on Thursday nights. What was so important about this? It was payday! On payday, essential bills had to get paid before the money got moved over to other urgent things like new soccer sneakers for my brother. Each child, regardless of age, had a say in what got paid. That way, there was no grumbling when we didn’t get what we wanted. It was a routine that became a habit.
What impressed me about my single mother was that she was teaching us finance at an early age. I did not know it was a gift then, but I do now…and that was a gift that keeps on giving to this day. I find that the way I paid my bills at home informed how I paid my bills in my company. I did not do any great analysis or research on this, but I know what I know!
What are the financial tools you should have both at home and at work?
• Create a budget
A budget is simply estimating how much money you will bring in (revenue), and how much money you will spend (expenses) over a specific period. This is the basis of your budget – you have to know what’s coming in and what’s going out. Many people are afraid to know those numbers. There’s the rub – if you don’t know, you can’t fix or manage it.
Most people think they have to make a lot of money to have a budget. I would say that the least amount of money you earn, the more need you have for a budget, so you don’t overspend. Can you extrapolate this thought to your business? I can. I have a budget for my business. It told me how much money the sales team should be spending on schmoozing, how much money I had to build a new website, how much money I can pay myself, and, in some cases, how much money I didn’t have and needed to run my business profitably.
You don’t even have to do a budget in Excel anymore because there are all kinds of apps to help you. I know Mint.com and Everydollar.com are two of those sites that help you take control of your money. And for heaven’s sake, get a bookkeeper!
• Sales, coupons, and discounts
“Never buy full price because your mother is working too hard for you to throw away her money” is what my 60-year old Jewish neighbor, Rachel, schooled me back in the 70’s. I learned from the best and used to clip coupons religiously when I was a kid – it was my Sunday pass time to supplement my mom’s income. Later, I realized that coupons or discounts would get me that item faster, especially when it was on sale! It taught me delayed gratification as I would only buy on Coupon Tuesday or wait for the Columbus Day sale.
Today, the social media and online world have taken couponing to an art. We can sign up for, and get discount coupons. When I go to the supermarket, some items are already discounted or marked down when I get to the cash register. The use of contactless QR codes has increased since COVID.
At work, I use the same principles. I’m not afraid to ask for discounts on an invoice. Many clients will pay me faster if I discount the rate or use specific applications that streamline the purchase process to get my money more quickly. I might give one-time discounts to new clients. I used my airline miles to discount my hotel room or airfare. Those miles have taken my family and me around the world. Don’t mess with my points!
• Life Insurance can save your life!
How’s life insurance a finance issue? Well, if your spouse passes away, and you find out that he had no life insurance, he took out a loan on the house and the kids college fund is decimated. What then? Your business is just breaking even—or not. Funerals are not free! Life insurance can be the thing that saves you until you can do better. You can get term life insurance that is really inexpensive! $1 million of term life insurance can cost as little as $1,000/year. Companies like Colonial life don’t even ask for a physical exam – they can provide the minimum that you need to take care of immediate expenses.
The sooner in life, you get insurance, the cheaper it is. This goes for your business as well. What if you or your business partner passes away? How is that person replaced? Life insurance gives you breathing room and time to get the right person to keep your company going. Offer it as a benefit to your employees – they will be in the same situation.
If you have not had these money conversations at home, please start. If you have it at home and not in your business, it’s never too late to start. Ensure that you are financially sound in your daily life and in the face of catastrophic events. Thanks to my mom, all three of her children are financially sound and religiously follow the same habit of paying their bills on Thursdays! I want the same for you.