My name is Lauren Simmons and I made history by becoming the youngest trader at the New York Stock Exchange, as well as the second Black woman to work as an equity trader on the floor in 2017. Oh, and did I mention doing this all while being the only female in the room? Being in a male-dominated space was an incredible experience. I was energized by being in a world where I was at the center of capital markets and understanding why and how money moves. What was striking was that one could be in the middle of money and not have a basic foundation of financial literacy. What does it mean to make a lot of money and not have a healthy relationship with money? Truth is, having a money mindset and strong understanding of financial literacy is significantly more important.
Many things that I do today I attribute to my money mindset, understanding mind-body wealth, and how our relationship with money dictates everything. I'm so glad to be teaming up with QuickBooks to give insights on my journey and how I've used QuickBooks to advance and streamline my entrepreneurial endeavors.
What is a money mindset?
A money mindset is your mind, body, and wealth being connected. Ask yourself: When you think of your relationship with money, what adjectives do you use? Do you use negative adjectives such as greedy, needy, dependent, fearful, or complicated? Do you use positive words such as healthy or independent? I believe that your relationship with money is parallel to your relationship with yourself. How are you caring for your body? How are you taking care of your wealth mindset? Are you eating healthy, working out, reading things that motivate and inspire you?
My money mindset is ongoing and will change at different phases of my life as I come to understand even more about money. Money mindsets are often dictated by factors like the community we were raised in, our parents' relationship with money, and the financial values they passed down to us. But at its foundation, the goal of a good money mindset is to not live in fear and stand confident in your power. It’s being open to opportunities, not living above your means, and being grateful for the present moment. Money is one of the top contributors to stress, but by acknowledging and taking the proper steps, you can avoid these unnecessary stressors.
Start creating a healthy money mindset
I often ask my clients to break down their budgeting techniques and how often they check their bank accounts. I know that might not sound interesting, but being honest about where you stand with your money and the spending habits you have is not only enlightening but powerful. Which brings me to being an entrepreneur. I do believe how you spend money in your personal life is going to be a direct reflection of how you spend money in your business.
Step 1: Create a business checking account. This separates your personal and business spending. My business is not a traditional business in the sense of having payroll or employees; I am my business. For example, I don't have a profit and loss sheet like most companies. Even so, maintaining a budget and understanding what your expenses are is important. I am confident that other entrepreneurs, content creators, and small business owners reading this blog will be in the same category as me. Over the past couple years, there has been a great resignation, and people are turning side hustles into full-on businesses. One of the first things I was taught was to make sure that I set up my own S corporation and a business checking account. An S corporation helps you understand how much money you are bringing in and better understand how to file your taxes. But there are many different organizational options for entrepreneurs or small business owners—such as being a loan-out, S corporation, LLC, or being self-employed—and it is important to evaluate and find the right fit for you and your business.
Step 2: Create a realistic budget. The 50/30/20 rule not only helps in your personal life but can help with budgeting for your business. This rule breaks down like so: 50% of your earnings go to your company's fixed expenses, 30% go to your professional development, and 20% go to long-term investments.
Step 3: Check your accounts weekly. Do you avoid checking your account because you are scared to face how much you’ve actually spent? Negative emotions will only generate negative outcomes. The solution is to be proactive with checking your account.
Step 4: Discipline your spending. You can have a budget but still not discipline yourself when it comes to spending, especially if you make money irregularly or in large sums. For my clients, if they have large sums of money coming in, I suggest that they not deposit their checks until a few days before expiration, which is typically 90 to 120 days in the U.S. This is not official financial advice but rather a suggestion of something that works for me personally. It helps keep me from spending money as soon as I get it. For clients who don’t have large sums of money coming in, I suggest they give themselves and their business a strict allowance. If it is possible to operate at 50% of what is coming in, then take that 50% portion as earnings and set the other 50% aside. This helps build a safety net and strict discipline.
Your personal relationship with money parallels your business relationship with money, so understanding how to have an overall healthy relationship will benefit all aspects of your life.
How changing my money mindset helped my business
This is where QuickBooks has been helpful, because I now get to see how much money I bring in and spend on a monthly basis. Checking these numbers weekly forces me to be honest about my income and what I spend my money on. I use QuickBooks to work toward my goals, and at the moment, I’m saving a majority of the money I make so I can put those profits into a larger business down the road.
While my journey hasn't been perfect, it has allowed me to gain valuable experience and learn so much about my personal finances. So, to anyone who is trying to start a small business, I'd like you to realize that it takes hard work. Success will not happen overnight. Instead, celebrate each small movement and achievement. These tiny wins will help you gain momentum, and it'll become easier to wake up every single day and be proud of what you've created.
