The one with Kristen: Financial Fitness

PODCAST TRANSCRIPTION

Kendra
So today I have with me, Kristin Recupero. She is the founder and financial coach at financial fitness coaching. Welcome, Kristin. Thank you so much for hopping on with me today.

Kristen
Thanks Kendra. I really appreciate you having me.

No problem. So why don’t we start at how did you end up here? We’re How did you become interested in finance? And what was your history there? You know, it’s always a long story. So let me try to cut it as short as it can be. But I originally, you know, I went to college thinking that I would be an athletic trainer that didn’t work out I learned that I needed to know biology and that wasn’t in my brain. So I quickly switched to HR and I am and I was a restaurant GM for about 10 years.

Kristen
I left the restaurant industry because of the hours and you know, starting to get a little older thinking about family and worked for a small family business doing all of their like running their behind the scenes in their accounts payable, accounts receivable.

payroll, all of that kind of stuff and learning a little bit in-depth of business there.

So, while working for them, I was making a fairly good salary. But honestly, I was living paycheck to paycheck and I, I never understood I couldn’t understand, like, what was going on. I mean, I was single, I had no kids, I had nobody to take care of, but myself, I made good money, and I was living paycheck to paycheck. And so my passion for finances and personal finance and helping entrepreneurs. It really started right there in 2013. I had a breaking moment that I was I mean, I didn’t sleep at night, I was worrying about how could I pick up a second job? What would I do with my dog? Like, you know, like, how would I fit this into my life? And I mean, it stressed me out I was putting groceries on credit cards and it didn’t make sense and numbers on paper didn’t make sense.

So I started learning everything about personal finance that I could, and I dug myself out of $26,000 a debt in about 18 months.

And I mean just through hard work perseverance, changing behaviors, working on behaviors, learning how to do a written budget, and it was life-changing, life-changing. And from there some time went on. And

I never really thought about this as a career. I didn’t really think it could be like, how can you like to earn money by teaching people about money who are struggling.

But when I made it,

you know, when my son was born, I knew that there was something more to my life. I didn’t want to be a stay at home mom. But I did want something with more flexibility. I did want to make bigger changes in the world. And my husband was fully supportive of me to leave my job. I worked on this as a side hustle. I grew it and when my daughter was born, I left my full-time job to do this full time. Wow. So yeah, it’s I mean, it was a long time coming. It was seven years of my own journey before

While not quite it was three or four years of my own journey before really making it you know turning it into a business and learning there was such thing as a financial coach.

So it’s it’s been interesting it’s been fun I’ve developed from working with mostly one to one people who have a traditional daytime job w two paycheck to my specialty is working with small business owners and entrepreneurs in both their business and their personal life because it’s so impactful. Right? Oh, it’s like huge I mean if you don’t have this piece of the puzzle figured out like you said you you you’re not understanding why it’s not working. Why are you work living paycheck to paycheck when you’re working so hard? Right, exactly. And even more so when you want to start a business you start a business because you are good at your craft you’re good at — you know, I call the technician but you are a great photographer. You are a great artist. You’re a great marketer. You’re a great speaker, but the money stuff like we don’t realize what comes

And behind the scenes and how you have to manage it and all these other things that you have to be able to do and decide how much you’re going to spend on it. So it’s just, it’s to be able to have the surviving and thriving business. It’s just imperative that you get the finances down in some foundations in place that can really help you so that you can focus on what you love and what you do so well. Right. So I do work with a lot of creative entrepreneurs. I do and you know, I’ve been so back and forth about actually specifically niching myself and saying, like, I work with creatives, I work with a lot of photographers in particular, as well.

But, you know, I guess that’s a big step to make. Right? Yeah. From your, your point of view, as I know, it’s important, but that’s a big step. But I do work with a ton of creatives. Because what I do is I teach money, how to be visual. And I think that it really works with that brain. So well.

sent me. Well, one of the systems that I use to like to implement in your business is I work with a system called profit first, and I’m a certified profit first financial coach and business coach, and show. Profit first is using grandma’s old envelope system, basically for your business finances. But when you’re looking at your finances in your bank accounts, you can visually see how much money are you going to be taking home? How much money are you setting aside for taxes with every dollar that comes in? When you open up your bank account to look and make a financial decision of should I be spending money on marketing or self-development? Or can I buy that chair or not buy that chair. It’s black and white right in front of your face. And it’s a picture of your finances literally, instead of having one big bank account and that’s the first place that I start with most small business owners. Okay, we break it into that visual breakdown. I’m sure that’s super helpful for someone that is so visual. I know for me, you

When I started my business, I, like you said I started it because I was really good at my craft, but when it came to the finances of things, I mean, it took me at least 10 years before I really understood.

Okay, this is something I really need to focus on. It was somewhat of a little bit of a mess before that, but

so what about the difference between a small business owner and a freelancer? Do you have different recommendations for a freelancer?

Typically a freelancer, you know, as far as when we look at the numbers that they’re doing, they can usually push more towards what they’re actually taking home. They typically have less operating expenses and overhead, because it’s just them.

You know, and, you know, depending on what that what your craft is, again, you’ll get some of you the people that you’re working for to pay for certain things and expenses that you would normally pay for, as you know, a small business owner technically separates yourself. So that’s the one big difference. But otherwise, it’s still the same, you still need to have separate bank accounts, from your personal, you still need to make a clear separation between your personal and your business finances so that you can know exactly what it takes to make your business profitable and your business successful and thriving. And you can know exactly what it makes it takes to bring into your household and to have your household thrive and to build wealth. So my favorite line in the saying is that I don’t want to just teach you to make more and bring more home at the end of the day, but also how to take that at home and make it do the most for you and whatever it is that you’re looking to do. Or you’re looking to build wealth or leave a legacy or change the world or start a nonprofit or whatever that might be.

Money is just a tool that helps us get to our goals in life. Yeah, oh, that’s so incredible. Because I mean, people usually want to start their own business because they

Kendra
Want not only to do what they love but to have the freedom to make their own choices? And I think when it comes to the money end of things, oftentimes, we don’t look at it the same way. I love your take on that.

Kendra
So, starting a business. I mean, where do you recommend somebody start? How do they start thinking about their finances? Do you recommend a coach right away? Or is that something that they can work up to?

Kristen
You know, I guess it just really depends. It depends on the business. Are you starting it as I usually suggest that you start certainly as a side hustle, you know, in so many senses, like make sure that you love what you’re really doing, make sure that it is your calling? I actually see this with other financial coaches a lot, which I, I love to mentor other coaches because we need more. We need more people who can talk about money and help with the emotions and the behaviors and teach about this stuff. But I find that a lot more will start a business and not know exactly what they’re getting into. And then by the time you know it, they’ve gone all-in and thrown everything all in at something, they decide that it’s not exactly what I want. So for somebody starting a business, I really suggest you started slow, started. As a side hustle in a sense, make sure that you love what you’re doing, and grow at the speed of cash. I think that’s a number one biggest part of advice and one of my steps to growing a profitable business is making sure that you grow at that speed of cash so that you are never paying for past, you know, mistakes or choices with future money.

Kendra
Right. That makes a lot of I’ve had points in my career where I needed to hire and I always struggled with that decision when is it okay to stretch, you know, where do you see that that turning point is it I know you’re saying grow at the speed of cash. So where is that for someone who’s You know, I’m overworked. And now I need to expand, but I’m nervous about doing it. How do you do that?

Kristen
You know what the story comes back, it comes right back into your money will tell you a story when you’re looking at it in the right way. So one of the things that I do with the different bank accounts and was setting up profit First, if somebody is looking to hire is we set up a hiring account, we see first if you can actually afford it without having that extra person.

Kendra
Oh, that’s so smart.

Kristen
Like, because when you actually hire somebody is you know, you will have maybe a downturn in your income any way where you will need some money. So that money that you save up during that time, it’s not going to go like not to good use. You can use that during training time. You might have a downtick in income while you are training this person or you might need to pay them for training or different things to set them up to be on your team. But you should be able to almost support that person without actually having them on your team. First, that makes so much sense. And if you can afford them, and the money in the bank account shows you that you can do so you bring them on. And then you bring them on with the strategy, of course, the how are they going to help you increase your income so that you can level stay at the same profitability levels. One of the problems that we do get into one of those hamster wheels is the more we make, the more we constantly spend, because we feel that we always have to upgrade. And it’s something that if you get your finances under control to begin with, and you learn not even all of you know, the accounting lingo. I’m not an accountant, I teach about cash flow and real card hard cold cash, right. So, if you learn about where your money’s going and what you have and what things are truly costing you before you get into deep, you will always be able to look at it all like moving forward. And in that sense, you will always be able to cash flow, what’s your future purchases, whether it’s a person or in a piece of equipment, you With a cash flow that purchase in line, it’ll give you boundaries.

Kendra
You’ve mentioned the emotion behind money. Could you talk a little bit more about that? Because it is a super emotional topic for people. I mean, to the point where some people aren’t even comfortable talking about it.

Kristen
Yes. I was talking with somebody recently and she made a really good point. She said, Listen, we can talk more openly about sex these days, and we can talk about money. Yes, and it’s true. It’s so true. People get very embarrassed and low key and shut down. That all comes from our money story and what we’re taught to believe about money and we’re taught so many things without actually being physically taught it. It’s a thing we hear we read, we see from times that you’re a small child, but money is 80% behavioral 20% knowledge and 100% emotional when you go to make a purchase, and You can just think about it. You know, we use the words I need all the time. And to help with that emotion I really challenge you to look at that and say, Okay, well I need a new microphone and you say, Okay, do I really need that? Or are there other options and so to remove some of that emotion I challenge you to list at least five different ways that you can get the same end result with what you feel like you need so it’s not just straight out buy a new microphone or don’t buy that microphone. Um, there’s you might be able to rent equipment for a little bit. You might be able to borrow a friend’s you might be able to buy one used on Craigslist marketplace you might be able to buy one open box from somewhere for a discount Amazon warehouse is awesome. I always buy open box stuff. There’s more than one way to skin the cat when you need a piece of equipment or you need a quote-unquote, something and we put that emotion into because you say oh never You know, be able to do this and serve my clients if I don’t have this next a best thing. Right? And that’s, you know, that emotion is what challenges us beyond what we feel that we need. But we also see our peers doing our peers having you know, social media is a wonderful, amazing thing. And it’s also a detriment to our finances. Because we see whatever FOMO Yeah, financial FOMO is real it is. You see what other people are doing and you don’t know the story behind them. eight out of 10 people on your street are broke. eight out of 10 business owners are living paycheck to paycheck waiting for a client to pay them so that they can pay somebody else and pay a bill. You don’t know the stories behind people what they have, what they’re doing, how hard they worked. I mean, you know, like, just how much you have to put into something that it can look easy and it can look fun. And it’s the same thing with money. That we don’t know those stories.

Kendra
Yeah, I’m it’s Especially I think for a creative person or somebody that so thoroughly enjoys their job. I don’t know if we’ve just been pre-programmed to think this but like, if you love what you do, then you shouldn’t have, then you shouldn’t charge for it. Oh, well, I’m having fun doing this. So you know, it’s not worth that. I think that’s something that I’ve I’ve struggled with myself in the past. Well, this is so much fun. How could it possibly How can I charge that? What do you think about something that kind of mindset?

Kristen
Oh, my gosh, that, you know, mindset is one of the very first things that I do in my group coaching program. The first thing that we tackled and that I addressed because the mindset is everything. And you know, what you believe is what you will do so if you believe that I have to be a starving artist in order to use that garden. But yeah, that’s like what we’re, again go back to what’s ingrained in us and what we’re taught, whether we’re directly taught it or we just For that, you know yes we pick it up from things that we hear and the way that our parents speak and the way they handled finances or what did they do in their lives? Um, It’s Yeah, it’s that quote-unquote starving artist that you know, I, I can never make a success of my thing if you believe that you aren’t 100% right. But mindset in the mind is so powerful. And I think that you really have to work if that’s what you currently believe. It takes day in and day out practice just like anything else, like learning to play the piano. To change that mindset, but it is changeable, it is adaptable and I truly believe you can be a success at anything you do. There are people who make money at teaching basket weaving, I teaching crocheting, and there’s nothing against that but like

Kendra
I say there’s,

Kristen
there’s value in Yes, there’s value in everything, but you have to believe in your value before you can charge That and before you can make it but it is so possible. And that’s probably one of the first things that I run into also with women, entrepreneurs, and creatives more particular than men, is that they have a really hard time seeing their value and what they do and how long they’ve worked on perfecting that skill and that that whatever it might be that technician job.

Kendra
And that’s a conversation I’ve had with a lot of freelancers and people in an industry where you’re charging hourly, where sometimes they feel like, well, how could I charge that when it’s only an hour of my time, but it’s, it’s all your experience. They’re not just getting an hour of your time they’re getting, you know, the gears that you spent in college and what you invested in that and all of your experience in the past whatever amount of years. It’s not just that hour.

Kristen
All right in the hourly model is the death of a business owner. Green leading values, what you’re doing and who you are, and what you’re providing. And like you said, all of the years that you’ve learned this, I really try to work with most business owners product or service-based service bases easier, but to develop more of value-based pricing, so that you’re not mean you may be charging per project, but you are charging for what value you are providing within that. I had a client who she did face painting, and that quickly went away with COVID. Right? So she’s like, what else? What else can I do? I mean, she made really good money doing face painting for kids in summers. And so somebody hired her to start painting murals on their wall, and she’s like, I can do this. This is great. But she didn’t know how to charge and I said, What are they going to end up walking away within the end that they could never do themselves? To but it’s only going to take me three hours. I’m like, but what would it take them to do it? Right Wait, what is her daughter going to think when she looks at The scenery every single night and what kind of dreams are you giving her? You know like good ways like what kind of things is she you know thinking and believing in herself with what your what she’s asked you to do. So I mean she doesn’t think about those kinds of aspects but you really have to believe it in all plays into your money mindset, your money, your it’s not all about just the strategy right? It does take all of these pieces together and to make it really a strong business framework.

Kendra
I’m, I’m sort of the hourly to value-based pricing concept. I’m sure anyone listening right now you probably threw them back on the floor.

Unknown Speaker
I mean, how do you even go about figuring out that’s what is it? How do you go about figuring that out?

Kendra
threw me back On the floor,

Kristen
there light. So let’s take a service-based business because it’s a little bit easier for me to get into. But let’s say that you know, I’m one of the models that I’ve drawn out before is a bookkeeper. So a bookkeeper very commonly will say, Well, yeah, I charge you know, $25 an hour might take me three or four hours this month, something like that. But to move that person into, they don’t just do books don’t just do you know, trying to think of something else. It’s a little bit more creative, but I know this example. So the time we can turn it around. Okay, good, good. So, you know, they’re not just doing a journal entry and I’m not a bookkeeper either, by the way, not at all. But they’re not just doing a journal entry. They’re doing the journal entries. They are helping you figure out your finances. They’re actually working on helping you tell you can you afford this or not? They’re working on sometimes your payables and your receivables in different parts of your business. They’re keeping your books straight. They’re keeping your things, checks, and balances all these kinds of things. So what I usually tell somebody do is, don’t just write down the hours that it’s going to take you but write down all of the things that you do. So even in, you know, marketing, so you might say that, hey, we’re going to put together this proposal. It’s going to take me six hours I charge Yeah, yeah. $50 an hour, whatever it is. So here’s the proposal, but instead, talk about what are you doing? So we’re going to craft you know, let me make this more creative. We’re going to craft a logo, we’re going to craft a tagline, we’re going to craft a, I don’t know, give me something else here. website, a website, and that website.

And what’s that?

Kendra
Thousand moving pieces? Yes,

Kristen
I mean, there are a million moving pieces. So you can take it from, it could be 1000 different things. But what I suggest in that value-based model is that you look at the list all the things that you can do So Kendra list, the 1000 moving pieces, you can do it And create the package that you want to do for your clients and put a price to what does that mean to them? What’s the ROI going to be in their business? How do you need to design that to fit your life so that you can take on the right amount of clients that you need to build the life that you love, and build your business around your life? Um, you know, there’s a lot of moving parts that also comes with what we do is how much needs to come home, how much gets to come home, how much goes to taxes, how much goes to your profit account, how much goes to your operating expenses, your marketing, other things like that. But when we look right into that piece of what gets to go home, I work it all backwards and we look at Okay, so you design his package as it’s a three, three-page website with copy on, you know, two pages that we work together on your avatar, it’s a logo and you know, a few other things, my brain but and you say, Okay, well, you know, this price is incentive where you are six hours at $50 an hour. You this price is, you know, this is 40 $500 for this package, because this is what it’s going to do for you. This is how it’s going to make you feel this is the end result of how you’re going to be able to drive business using this. And this is, I mean, this is skills that you have learned and perfected over 20 years. Right? Very rare. But when people see $1 sign, and they say, well, that’s $50 an hour and then they look at what they make, do I make, you know, $25 an hour and they start immediately saying I can’t afford that or she’s overpriced, or they start comparing you to somebody else. And Kendra, you’re not somebody else. Right? You know, you’re you with your experience and your niche and your specifics and things like that. So that’s where the value really comes in is like separating yourself a part of How are you different Then we look at other packages that you can develop so that you have, you know, typically the Goldilocks effect is a three, three package effect where one is just right. And that’s that middle package that you design or you’re perfectly priced by the value that you provide, not by the hours that you’ll work. Right, right.

Kendra
Yeah, I mean, over the years, I’ve moved into that model where I stopped pricing things hourly, except that in the back of my head, it’s still always there. You know, if I have an $8,000 website package in the back of my head, I’m still acquainting and I don’t tell that to my clients, but I’m thinking okay, this is going to take me you know, 140 hours or whatever it is, and I have to hire this one and that one, we have to talk about brand tone, and we have to talk about copywriting and all of these things. So this is what that packages, you know, I have gotten there, it’s just still that in the back of my head, that hourly thing is still there. It’s just not communicated to the clients anymore, but It’s, it’s a funny thing because you still have to kind of let that go. Because you’re right. It’s more, it’s more all of the experience. It’s more all of the entire thing and I have, and I recommend this to anybody listening to, you know, there’s plenty of times where it’s just not the right fit whether you know, the prices a little bit too much for the client. But, you know, we can’t, we can’t bring things down to match somebody’s comfort level, when we know what we’re providing is worth what we’re asking.

Kristen
Exactly. You have to be comfortable with what you’re asking you’re, you’re spot on. What I usually do, well I have different ways you know, like so I’ve got group coaching, I have a new course coming out and I’ve got my levels of stuff. But what I usually suggest if somebody if you can’t adjust your level like maybe you are for meeting like you said your medium to large size business, but some small business comes in They’re just not, you know, man, they love you, you love them. But the pricing isn’t a good fit. Maybe there’s somebody that you can refer them to who has been a mentor or a mentee of yours, or, you know, that’s up and coming. And maybe there’s a great way to be a referral in your own network to somebody else and help them out as well. That you like to work or work similar to you. Yep.

Kendra
Tell me about your course.

Kristen
Yes. So I’m really excited about this because it is a way for me to get more information and myself into more people’s hands, and to be able to help people without the one to one price tag and necessarily even the group limitations. So I have a profit first six-week boot camp that I do as a group coaching program, and I’ve recently gotten it all out it is in person beta mode right now with the second set of people into a self-paced course. So it’s the same materials, it’s still meeting It’s 35 videos you know and worksheets it’s a step by step guide that live we take six weeks to do it. I’ve had people do it in as little as three to four weeks and I’ve had people take a little bit longer because of quote-unquote life. Right? But you know, it’s it’s an amazing addition to the book. It’s beyond just profit. First, we talk about goals, we talk about mindset, I talk about separating your personal and your business finances. That’s usually huge for most freelancers, and small business owners like is that commingling of funds where we don’t know what we spend in our business. We don’t know what it takes to run our personal life separately. You know, we talked about I talked about pricing, actually the bonus module in there about pricing and value-based pricing and how to how to take what we learn and turn that into building the price that’s fitting for you and And I can’t even think some advanced strategies and things like that. But it’s coming out early August, kind of waiting on a couple of my beta testers to get back to me yet with some more feedback. But I am so excited to get this into the hands of people so that they can have that guided still one to one guide of exactly do this. It’s laid out it’s, there are no questions about it. And so that they can get some foundations placed in their business so that you can be profitable be thriving, and you know, last pass that five-year mark where 80% of businesses fail.

Unknown Speaker
Yeah.

Kendra
I’m super excited to see when that comes out. I will definitely be signing up. That brings up an interesting point, though, how many sources of income I mean, I guess as many as you can handle, but you know, that passive income idea, especially somebody who’s maybe a freelancer, or has a smaller Small Business. I mean, what do you what, what do you recommend there?

Kristen
Seven is actually the optimal number, sources of different passive income to have to build wealth. And to be the most steady, I can’t think of the word I want to use but relate to, you know, to have your legs and feet on all grounds. So, you know, you might start out by having a W two job and you’re freelancing, and then you have some investments and you’ve got your 401k that would be of course, that’s going to be a stream down the road right now it’s going in but eventually becoming out. Real estate is huge for a lot of people. My husband and I have a real estate portfolio ourselves to buy properties soon to be six. You know, building several streams within your own business so that you have a few things, especially with we’ve been through so many challenging times in the last few months here. We’ve had a lot of businesses pivot and pivot in different directions and we’re one to one price thing isn’t the right fit for a lot of people right now, maybe there’s something you can develop that can fit both of your worlds. You know, like a course or membership or something different, where you can help at a lower price point and still help yourself but have a different source of revenue. So and then of course, if you’re married, you can bring in a couple of extra sources and that way with that person having different streams businesses side hustles Yeah, investing and things like that. Absolutely. So I always aim and say, I think the number is always been seven. To grow to do you

Kendra
sort of do like a financial audit every year where you look at Okay, this is working. I mean, how do you um, we’re well into the year but I’m, I know, a lot of people are considering like 2020 needs to start over. So I think New Year’s resolutions in mind, what do you recommend there? How do you assess how you did and where you want Go.

Kristen
Yes. So I am a couple of different ways. So first of all, I suggest that you’re always doing a business budget as well as your personal budget. And it doesn’t have to be this really difficult. It doesn’t have to be a really difficult thing on my business coaching page. On my website, I have a download that you can download. It’s a simple spreadsheet. And it’s all the places where you can put in all of your expenses. So I suggest you always know your fixed expenses, your variable expenses, and certainly your slow and busy times of the year. And if it’s your first year in business, it’s totally a crapshoot, right for anything. It’s totally a crapshoot, second year, so might be something of a crapshoot because you had COVID, maybe in the second year, but when you’re doing that budget, what I suggest is you actually do that, that budget, a budget is also a forecast, in a sense. So when you do a budget for one, two or three months, it’s the budget but when you’re doing it further out for that whole year, it becomes that forecast, this is what I need to hit, this is what I need to bring in to hit my numbers to, to handle my profitability to bring home, you know, $2,000 a month or $6,000 a month or whatever it might look like to you. So by knowing your numbers, once again, that’s one of my other steps of profitability is you have to know your numbers to be profitable and lay them out in this sense, but it doesn’t have to be. It doesn’t have to be complicated. If you download that sheet, you’ll see that it’s really simple as looking at your revenue per month. And how many clients do I have? And or pieces of jewelry Do I need to sell. And here’s my outcoming expenses every month, here are the ones that are going to be variable and change a little bit every month. And then here are the things that I had that come out yearly, and how they averaged out. So you always know what’s going on. And you should be doing that and evaluating that on a monthly basis, a quarterly basis and a yearly basis. Okay. For my profit first clients, we do a yearly annual review Based on the historical financials, and we review them every year to make sure that we’ve made progress and to determine what the profitability has been up what the new goals are, and how we’re going to ship those things and expenses in the future.

Kendra
What about programs? As far as actual like QuickBooks, what do you recommend for a small business?

Kristen
So when you’re first starting out again, I suggest you keep everything as free as possible. So if you are just starting out, I love that most accountants don’t. So I’ll say that up front, but I love wave Wi Fi wave apps. It’s free. It is, you know, it helps you keep track of your money. It connects right to your bank has bank connectivity. And so it’s very simple. It works just like QuickBooks only, there’s not nearly as robust and will generate a PnL for you a balance sheet. It’s just not nearly as robust but again, it is free. So I think I usually suggest you start out with that. So it has you keeping track of something that helps you out. It’s really, again, it talks to your bank. So it’s pretty simplistic. But QuickBooks is definitely the most robust of the systems when it comes down to expense tracking and income tracking. And I think it’s, you know, the basic one, I don’t like the freelancer version, it’s not having you’re better off using the free version of a wave than you are the freelancer version. I’ve seen it screw people up pretty good. But yeah, basic, the very basic version of QuickBooks self-employed, I think it is, is I think, maybe 20 $28 a month. So it’s not a huge cost. It just, I wouldn’t suggest taking it on if you don’t have clients yet, and you can’t afford it. Again, the cash.

Kendra
Yeah, I know. I’ve definitely gone down the rabbit hole of buying too many subscription-based products to help streamline my business and then I look at my budget for that every month and I’m like, Oh, yeah, no budget. Like project management and CRM and all this stuff. It was a, it was something I had to reevaluate it.

Kristen
And I absolutely

Kendra
would. I mean, I immediately bought zoom. When COVID happened, and now I’m not using it as much, so I might cancel that. But yeah, I’m pretty quick to just sign up for the professional version of whenever, of

Kristen
course, because it’s the best that goes back into that emotional part. Like Well, it’s the best I have to have it right.

I understand I’m there I get it.

Kendra
How have you been guiding people through this time right now because it’s just been so so up and down and so crazy. And I’ve seen a lot of my clients have a huge actual boom in their business and then quite a few having to either close their doors or completely pivot.

Kristen
Yeah. And then it’s, you know, it’s very, it’s been challenging. It really has been. But the very first thing when everything happened is You know, I started coaching people to immediately just stop and take hold for a minute don’t make any rash decisions at all because that’s the first place that we get into problems with money. So gratefully, most people that I had been working with for three months or more had an emergency fund in their business for at least one month where they could at least breathe for a second and decide what course of action to take next. But not everybody as you know certainly is in that position. And the first thing that you know during this time that I suggest is you stop all nonessential expenses, everything if it is not making the world of difference and it is not necessary to you running your business or your personal life look at it, you know, you’ve got to look it on both ends, but you have to cut the nonessentials. And for some people that look like cutting cable down to like you know, Hulu and for some people that look like cutting who live down to 699 version and some people it looks Listen, gets rid of everything. So it’s different for every person and what that really means and how they’ve been able to transition and based on what kind of emergency funds do they have? How are they already at their finances? Are they already burying their heads in the sand, but that’s the last thing that we need to do is to bury our heads right now. It’s the first thing we need to just get a grip on and take control of something else is really important is just to make sure that you collect any money that’s outstanding and otu by clients. And if you have to offer a discount, if you still have somebody who has not paid you for six months, offer them a 10% discount to pay tomorrow, offer with 20% if you need to, but get that money in hand because if they do close their doors, you’re not getting a sense. Yeah,

Unknown Speaker
that’s a good point.

Kristen
And we don’t want to think that anybody’s going to have to but a statistic that I heard the other day was it almost 30 or 40% of businesses will close by the time this is over. And that broke my heart. That’s why I do this because that’s, that’s somebody’s dream. That’s closing.

Kendra
Yeah, I know. It’s, it’s been so strange. I’ve seen what I’ve witnessed, both beautifully and, and really horrific. As far as just You’re right. It’s somebody’s dream, it’s they have put everything into something and then it’s just gone before they can even really wrap their head around it.

Kristen
Yeah. And I’ve also seen some people take, like you said, do some amazing pivots, take a break, take a breather, and then pivot. And that’s been something I helped a few clients do because it doesn’t have to be forever either. You can pivot and offer something you never thought you’d offer, just to help people in this time of need and to help serve your audience.

Kendra
And so I’ve seen people start businesses in this climate like wow, because I’ve just had to reevaluate, not had to, but we’ve been given that time to sort of sit back And look at our lives and think like, Well, what do I really want here? And yes, a couple of people I know have started businesses, because they just adored the time and with their families or with their spouse or whatever it be. They didn’t want to lose, and out on that. And I think a lot of people had belief systems that were sort of kind of ripped apart and realize like, Oh, actually, I get to make the rules here. So what do I want?

Kristen
Yes, I couldn’t agree more with all of that. And I agree with you that amongst all of the crap that we have seen in the last 346 months, I don’t even know at this point, how long it’s been. But there have been some beautiful stuff. There have been some great changes in families and life and passions and, you know, people just realizing either what they want or what they don’t want, whether that’s great just you know, as a job or financially or in their life period. But it has some good stuff.

Kendra
Yeah, I have a big beautiful office that in December I’m going to be letting go of because it was something that I just in my head was like, Oh, I need this for perception for, you know, just quiet space. But during the shutdown, when I would come into the office, the anxiety that would have about being here, and then being away from my kids who now need me so much more, because whether it be online schooling or they’re just home and bored, and my husband’s working from home, too. So now I’ve decided, you know what, I’m going to let go of the office. I made a beautiful home office and having the kids right there. It’s just so it’s why I started my business Originally, I always wanted to have that flexibility and to be able to spend time with them. And the other day, I was jumping on a zoom call and my daughter was hugging me up until the camera went on.

Kristen
No, you can’t Oh, that’s awesome, though. That’s I mean, that’s just one of those perfect examples of Yes, that’s, that’s the right move. It sounds like you came to that in a different conclusion. But that’s, that’s amazing.

Kendra
Yeah. And it’s so funny because if you had asked me a year ago, I know I need the office, I have to have it. It’s an essential, and then realizing it wasn’t really kind of made me reflect on Well, what else is not essential? You know, my team is completely remote. Everyone is virtual. That’s been working great. So what am I doing? And I’ve seen a lot of my clients make that same decision, where their team, their virtual team has felt so supported and so much more part of the team in during this time because there’s more communication, like one of my clients has salespeople all over the US and they said they’ve never felt more unified because there’s just so many more touchpoints of communication now. And they’re downsizing their corporate headquarters because people are just happier.

Kristen
Yeah, absolutely. We’re seeing that here in Pittsburgh to I mean, my husband we have a landscaping construction business also and that’s basically his business we have his hers and ours he’s all over the city all the time and the one thing he’s like man he’s like this is this has been horrific on so many levels. He’s like, but one thing that hasn’t been as attractive because nobody’s working downtown. Yeah. Which, which is also detrimental, though. It’s going to see like the city is losing and parking and I mean, it’s detrimental. And I think one thing and also happened on that level, so you know, pros again, there’s always an upside for somebody but right at what cost is it also going to come? Right yeah, there I think we’re going to see a lot of people shifting how they work. And again, as you said, even people are still thinking about opening businesses, people are still getting laid off and furloughed. I had somebody get furloughed just last week. And they weren’t expecting it. And thankfully, they had a side hustle they were already building so they’re, they’re just focusing hardcore now on exactly What can we do to get this 100% profitable and moving forward? So,

Kendra
you know, that’s a really good point, too is is making sure that you have a contingency plan as far as your finances go. I mean, how many months do you recommend? If you can, do you have set aside to, to get through something like that?

Kristen
I’ve always recommended three to six months of your expenses, and both your business and your personal life, you know, so that you can you have that time again, to think to breathe to not panic, do not make rash decisions. But right now, honestly, I think six is the minimum if you can do it. And just to stock up and save, and again, keep taking stock of what you are doing, what you’re spending where you’re spending it, even if things are opening in your area. I think it’d be very, very cautious and working on a budget right now is critical and more critical than ever because I don’t think that we’re done with this. So I think that you know, anything thing is better than nothing, of course. But I’m really highly recommending that we move in that six months plus category right now so that it’s simply your sleeping at night money.

Kendra

And do you put that in a separate savings account? Or I mean, when I was growing up, it was checking and a savings account. And that was it.

Kendra
I heard so many different theories on you can have savings accounts for each of your different financial goals. What do you think about that kind of structure?

Kristen
Yep. That’s something that I do with profit first. So we open up a lot of different accounts, and they’re usually are mostly checking for that. But when it comes to your savings, I’d definitely suggest you keep some liquid that you can access very quickly. So it’s within your same savings, your same bank banking system,

you know, at least a couple of thousand of that.

Because online banking can take a few days to transfer. So you really do need something in the emergency. So I usually suggest you keep one month or so in a traditional savings. You’re not going to earn everything off of it just you’re sleeping well, and then the rest of it in the high-interest high yield account. So if something like Capital One has a great one ally has great ones. I think Marcus, Marcus Goldman and Sachs it is as another one. But they’re all I mean, I think they’re down right now. But they were two and a quarter, two and a half for a while. Right?

So you need something on it instead of nothing. Right?

Kendra
Let’s it’s just been such a fantastic conversation. This is something that I think people starting a business or even people who’ve been in their business for years, just really struggle with, especially creative industries. So I appreciate you coming on and taking the time to talk to us about all this.

Kristen
Yeah, thanks so much Kendra. I love to geek out over it. I was not always this person either. Like I said, I was not good with money. I didn’t this. You’re going to tell me this is my life. 10 years ago, I’d laugh in your face but But it is and I love it. And it’s the helping. It’s the changes. It’s what you see in somebody else’s life change that I love. And knowing what it’s changed for ours. That’s, that’s why I know what your end result will be in 357 10 years. If you just stay the path of truth to your goals and stay the path with your finances and dig in. Stop burying. If you’re burying your head, just stop burying it and get it out. Take a look at it. I promise. It’s probably not as bad as you think it is.

But now’s the time. It’s definitely the time.

Kendra
Well, I’m gonna put all of your recommended links and everywhere people can find you. Your website, would you mind just sharing so we can hear it and then I’ll put everything in the show notes as well.

Kristen
Yeah, absolutely. So the website is financial fitness. coaching.com.

Kendra
Perfect. All right, and if you’re on Instagram, I will be sharing all of that on in the show notes and Yeah, thank you so much. I love this conversation. I’d love to have you back on sometime soon.

Kristen
I would love it. So thank you so much for having me again. I appreciate