3 basic pricing methods + learn how to pay yourself!
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Last week, we talked about planning your availability for 2024.
Now let’s discuss how to actually plan the income that goes with that availability, just in case you need a little bit of talking off the ledge.
I feel like we all need that in the beginning stages, –or pretty much any stage, as you change your prices!
DISCLAIMER
Before I dive into that, let’s start with a quick disclaimer to keep things legal & transparent!
Remember: I am a graphic designer by trade, turned web designer & entrepreneur.
I am NOT a financial expert & this is not financial advice specific to anyone in particular; I’m just sharing my personal experience(s) here in case it helps anyone else. I am not pretending or claiming to be a financial expert or advisor, and I will not tell you that I've got it all figured out, because I’m still learning along the way too.
I’m sharing what I’ve learned so far in my own journey, because we all need to know how to charge for our services & eventually pay ourselves –otherwise, we truly do just have a hobby & not a business. And the thing is, if you've only ever worked for somebody else that just handed you a paycheck every week ––every other week, every month, whatever the schedule was–– you probably don't know where to pull that money from, how much to pull, or how often to hand it out to yourself. 😬
3 Popular Pricing Methods
Method #1: Pricing What You’re Worth
First I want to start with what my thoughts are on the whole “charge what you're worth” method.
…Oh, that's a tough one! How do I say this without pissing somebody off? 😬🫠😂
Personal opinion: I actually think this is a toxic way to think about it, because in all honesty, when I was first getting started I had no idea what my services were worth! I only knew what my past 9-5s were paying me and that ranged from about $5/hour when I worked on campus in college, to about $20/hr at my last ‘real’ full-time ‘corporate’ job.
So when it came time to set my own rates for freelance work, I just guessed and I guessed really low. (Example: In 2015, I was charging $25-30/hr.)
Then as you continue to build experience and get better, most people forget that the worth of your skillset is also increasing along with it. We tend to get stuck in this rut, absorbed in our day-to-day bullshit of running our business and managing our client-load, then suddenly we look up and “just know” that our prices are too low but maybe we’re afraid to raise them.
Since you don't really know exactly what your services are worth and maybe you haven’t realized that worth has been growing, then you can easily lock yourself into doing what you’ve always done because it’s the easier path, ––but at the same time you’re seeing other people with comparable skills to you charging way more and ya might think… “WHAT THE HELL AM I DOING WRONG?” 😩
…Then you might even start to equate what YOU are worth, with what your services are currently worth & that can drag down your self-confidence, further sabotaging the whole thing & creating a vicious cycle that doesn’t help you increase your income AT ALL.
It's a downward spiral waiting to happen, my friend!
While I don't love how it's worded, I do understand that it's meant to mean that you charge for the worth of your skills and experience, and that is based on how much experience you have, and a lot of other variables (such as how long you’ve been doing this, who you learned from & what their qualifications were, how varied have your projects been, real-world work experiences with all kinds of clients, mistakes made & learned from, etc). That's what “charge your worth” is supposed to mean. So, I don't love how it's worded, but I understand the general concept and it’s not technically ‘wrong’… it’s just not very helpful either.
It's really easy to get comparison-itis that way, as you inevitably begin to compare yourself to other people in your network or industry without knowing why they are charging a different rate than you. Maybe they have way more work experience than you, or have additional skills because they've been in the game a lot longer etc.
Short answer: Charging what you’re worth can set you up to fail, ultimately stuck in a loop of comparing yourself to others & doesn’t actually help you pick an appropriate rate.
Method #2: Market-Based Pricing
Another method you’ve probably heard other business-minded people say, is to charge whatever the market value is. In other words, you can only charge what people will actually pay.
Yes, that’s true but not in EVERY scenario. I’ll give you two examples:
Say you’re selling your old iMac on eBay, which I’ve done recently. It had a 2TB hard drive, the highest available processor from 2017, and maxed out memory at 64GB. In all honesty, it was still functioning great for me, except when I was editing video & I’ve been doing that a lot more the past 2 years, so that became annoying for me & is ultimately why I upgraded & bought a new Mac. I knew no one would buy a 6 year old desktop computer, Mac or not, for more than $1,000 USD. 😂 So my husband included the original Magic Mouse, Magic Keyboard, the upgraded RAM (64GB), and the nice $200 Gator carrying case for iMacs*, then we set the price at $1,000 with free shipping & watched to see what happened. We ended up lowering the price over a few weeks to about $600 USD, and after paying for shipping, …we lost our ass on that deal. 🤣 ––So, the market wasn’t willing to spend much on a 6 year old computer.
BUT, let’s say you list your house for sale at $200,000 after an appraisal & learning that all the houses in your neighborhood are selling for similar values. Then you change your mind & decide to stay, so you take down the listing. Maybe one person surprises you with an offer of $250k for your house, because he knows you’re no longer interested in selling, but he still wants it badly & is trying to find the magic number that will get you to agree to sell. Maybe you turn him down because $50k over asking price isn’t worth the hassle of moving to you & you’d decided you’d wanted to stay anyway. …Then maybe he counters with a totally wild offer of $500,000 which is more than double your original asking price! Suddenly, you’re probably rethinking whether you’re unwilling to move, right?! The house’s ACTUAL real-world value hasn’t changed, but to this one person, that house is now worth $500,000. Maybe it’s the location, maybe it’s the perfect school or close to his job, or maybe it’s the only house in the area that can accommodate moving in his elderly parents or maybe it has a garage apartment for his college teen. Who knows?! But the reason he’s willing to pay so much extra, is NOT because the house itself is worth it, ––it’s just a reflection of how much that one person specifically values the house. Not the market price.
The same concepts can also apply to service providers, given the right situation, but again there are lots of variables which make it hard to pinpoint real-world numbers.
Market-based pricing is hard to reliably use to price your services, because that value fluctuates with each potential lead & what THEY value most in their life.
Method#3: Value-Based Pricing
This is my favorite option, because this is pricing based on what I bring to the table when I provide the service & what that result can provide for the client. In other words, can my offer potentially generate new revenue for this business in the future, or potentially help them get more clients or sell more products?
Does the website we create do useful things for the business owner that a normal site wouldn't do? Is there sales strategy built in? Are there integrations with their external systems (schedulers, CRM, email marketing, content marketing, social media, media kits, etc)? Did I coach the client through some basic business decisions when they were submitting content or working through process-related decisions that involved the website?
These are all things that I tend to do during my custom builds, by the way!
If we compare the website + basic business & sales coaching that I provide, to a stand-alone basic website, ––those two things are completely different services.
Another thing to consider is demand. If I listed my custom website prices starting at $1,800, I would get way too many inquiries ––so many that there literally would not be enough time in the year to get all of those projects done. So increasing the rate also helps to decrease the number of general inquiries, while increasing the quality of the inquiries I do get.
When we talk about value based pricing, we're also talking about what you are bringing to the table, what your experience level is, how long have you been in the industry, what you can confidently provide, how much better is all of that from what they might get from less-experienced competitors, etc.
Picking a pricing method that works for you
There's not really a right or wrong answer; only the one that's good or bad for you specifically and what the market can support.
So now you need to pick your rate, and this is the scary part for a lot of people.
So let’s begin to break down HOW you start picking a rate, because a lot of newbie business owners, myself included once upon a time, were like, “…so I just… pick a number out of thin air? Or equivalent-ish to the hourly rate that I used to get?”
Sure. That will work okay at first... I won't say that's “wrong,” but it was definitely not the best choice I could have made, and it also meant that it took a lot longer to reach a point where I wasn’t constantly struggling &/or battling burnout.
So instead, I’ll skip ahead to the part of my freelance journey that finally started to WORK for me, and showed me the light at the end of the tunnel.
The “Profit First” system
First, I suggest you go to Amazon (or wherever you like to buy your books) and buy the book Profit First by Mike Michalowicz*. It's not a traditional, boring “finance book.” I promise you, ––Mike will make you laugh. It’s actually a pretty entertaining book! Scout’s honor. 🫡
Mike’s not a finance guy; he tells you that upfront. But he does teach you the lessons he learned about managing our business money, and his system is so easy that even creative, non-math-thinkers like myself can do it!
Literally, without that book, I would NOT be where I am today. I use his system in my own business, and have since 2020. The book is even on my bookshelf behind me in all of my YouTube videos from 2023. I have a hardback copy, the Kindle book, and the Audible audiobook. ––I am not kidding.––
So, buy the damn book and thank me later. 😂
How to Implement “Profit First” in Your Business
Here’s the general concept of Profit First. Right now, hopefully your business income deposits into a business checking account, right? 🤞🏻
All Profit First teaches us to do, is to separate that income into multiple accounts or sub-accounts, like different piggy banks where we could divvy up our allowance to save up for buying different things, rather than dumping all of our money into 1 container & spending from that same container.
Why? Because when we have $100 in our wallet, most of us will SPEND that $100 more frivolously. It’s much easier to have five $20 bills instead, and you only take ONE $20 bill with you for each spending trip, so you can ONLY spend up to $20 at any given time.
With your total income being automatically (or manually, depending on your bank) divided up every time you get a deposit, you’re essentially dropping parts of that money into a different buckets for different purposes and you're giving every dollar a job to do. Because every bucket represents something that you should do with that money. What are those buckets?
The basic four accounts are:
Owner's pay – for literally paying yourself. By the way, this is where your salary will come from! (If you're like, “But I don't have a salary yet?” ––You will; keep listening!)
Expenses – to pay for things like website hosting, your domain, email & other softwares, employees or contractors, payment processing fees, a new office chair, your internet or a new computer, etc.
Taxes – to literally set aside a percentage of each deposit to pay your taxes; this makes life SO MUCH less stressful around tax seasons!
Profit – yep, this is literally the “extra” cherry on top that is quite literally your profit; if you don’t create it, you will not have it. 😂
There can be more categories as the percentages vary & deposits get larger.
As you decide what your percentages for each account (bucket) will be (the Profit First book will help you do this!), you’ll need to know things like what tax bracket you fall into to set aside enough money from each payment for taxes, and you should know what your expenses are so that you set enough aside to pay for things you need to run your business.
All of the buckets collect money in constant percentages that have to equal 100%, total.
So if you're still following me, for example, the way I do it in my business, is
50% of everything I make in my business, –every single dollar that is deposited into my bank account– goes into the owner's pay bucket.
25% of every dollar goes into savings for taxes.
20% of every dollar goes into savings for business expenses
5% of every dollar is set aside as profit. At the end of the year, I can continue to build it as savings to pay myself in an emergency in the future, or I can decide to give myself a Christmas bonus at the end of the year, etc.
With this method, at the end of the year, I have money set aside from literally every dollar that I made all year long, ready to pay my taxes, so that April 15th is never a stressful period, and the money is there & waiting to be used for that purpose, so I don’t have to “come up with” the money later.
PRO TIP:
It also helps if you hire a bookkeeper (some will do quarterly cleanups for you to help you stay on top of things while it’s fresh in your memory), and a CPA for actually filing those taxes. I hire a wonderful bookkeeper every quarter to help clean up my books, and by the end of December or into early January, the entire year is reconciled, transactions are categorized, my Profit & Loss report is correct, my 1099s are sent, etc. Then when my husband get’s his tax info from his company, we just send it all to our accountant & he does the rest. It’s not as expensive as you might think! Especially in the early stages of your business.
Now, in the book Mike will tell you that you need totally different bank accounts to set this up properly, and you can absolutely do that if ya want.
However, for now, I prefer to keep things simple. I use a software company called Novo*, which works with a real bank to manage the money with no fees (no monthly fees just to have the account, no transaction fees, etc). And it just so happens that Novo is incredibly ‘Profit First–friendly.’
It can segment your money from one account into “Reserves,” or sub-accounts inside your main account. SO it’s very easy (even automatic!) to divvy up your money into these digital buckets. You can even set up your Reserves to automatically allocate specific percentages of every deposit to be sent directly into each reserve, and it literally does the rest for us.
All I have to do is open my account and look in the different Reserve folders to see the total in each bucket, and that's how I know how to stay on budget.
It’s a lot like envelope budgeting that your grandma may have used, where you get a paycheck and divide it up into different literally envelopes: one to pay rent, one for groceries, one for fun stuff, etc. And when it comes time to spend that money, you only spend the money from the related envelope (ie: rent money only ever pays rent, fun money only ever pays for movie tickets & takeout, etc). It’s just like that, but digital & applied toward our business!
I cannot stress enough how much this has helped me finally start becoming PROFITABLE and begin to earn a paycheck!!
Helpful resources to dive in a little deeper
Here are a few resources if you’re ready to dive in a little bit further!
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MONEY-RELATED:
Everyone Lied To You About Pricing
What I Pay Myself + 3 Tips to Simplify Your Salary
How Profit First and Bookkeeping Work Together with Madison Brown
MONEY MINDSET EXPERT: The HABITS Which Keep You Struggling
Quickbooks for Small Businesses (Financial Stability for Creatives Series) with Crystalynn Shelton
TIME RELATED:Creating Business Productivity and ROI with Your Time with Brittnie Renee
I Reviewed 13 Best Time Trackers of 2024 (so you don't have to)
WHAT ARE ZOMBIE-PROJECTS?Zombie Projects: 7 Tips for Finishing Neverending Web Design Projects - Web Designer Academy
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the Profit First* book
the Pricing Calculator Template
If you want help playing with some of the numbers, go grab my pricing calculator template too. It's just a Google sheet. There's a couple of formulas that you have to tweak and then it will do all the math for you, in a way you can export & save if you want to be able to reference it later.
There's also a help doc that comes with it, that will walk you through changing the formulas, updating the percentages if you need to, those kinds of things.
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try Novo* with my affiliate link & get a bonus 30 days after you make your deposit!
Want to learn more about Novo & some of the other options I researched before I switched to it in 2020? Check out this post next:
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ie: higher-level learning, courses, or memberships
Creative Income Cure, from Val Marlene (Profit First certified educator)
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Duly Noted Financial (bookkeeper)
2 more reputable options I found through trustworthy people in my network (I’ve never worked with these ladies myself, so please do your due diligence first!)
Madison Dearly (bookkeeper)
Crystalynne Shelton (CPA)
Auditing Your Time to Help with Pricing
The next most logical (& common) thing that will help you decide your rates is to figure out how much time you’re ACTUALLY spending on your tasks, whether it’s writing a blog post, scheduling social media content, admin tasks for your business, or working on a project for a client.
For at least a week, every hour of your weekday, based on Brittanie Renee’s suggestion (also linked video podcast in the previous section), I want you to stop for a minute and write down everything you were just working on and approximately how long it took you to do that thing.
Why? Because if you don't know how long your tasks or projects actually take you, you really can't plan for an allotted period of time to do a project and so it’s also hard to decide on a rate for tasks related to your services.
For example, if you have no idea how long it takes you to create & design a website, it's going to be really hard to plan your availability for a whole year of website-related services!
I happen to know, because I've been doing this for a few years now, that I can do a custom Squarespace website in just two weeks. I can do a brand design or refresh AND a website in just three weeks, and I usually have free time during those projects to also work on my business admin stuff.
So, it’s really important you regularly do an audit of your time.
If you ever find yourself at the end of your workday feeling like you have no idea what you did all day, but were super busy all day… you need to audit your time. 🙋🏻♀️ I’ve totally had days like this! It’s VERY easy to do, but the only way to fix it is to be AWARE of our tendencies that get us off track.
As for tracking your time during client projects, you do not want to be in a situation where your projects drag on into Never-to-be-finished Land because that will affect other potential client projects and essentially prevent you from booking more work. Plus it's harder to charge people “more” for more work or more time, when you're in the middle of the project, because it’s an add-on that can be uncomfortable to address. If you want to learn more about “Zombie Projects,” check out this free podcast episode, also linked in the previous section.
Auditing your time will help you be more realistic with how long it actually takes you to do the things in your business, versus how long you think it's going to take. Sometimes we overextend; sometimes we underestimate. You really want to be more accurate so you can plan your calendar & your income accordingly!
So make sure you do an audit at least once a season in your business, because things change, vary and fluctuate in our businesses!
And you don't have to get fancy with it!
Yes, you could sign up for a time-tracking app (watch this video from ProcessDriven to see which one is right for you), or you could just get out a piece of paper, a notebook, open up Notes on your phone, or whatever FREE options you can think of.
Practical Tips for Setting Your Rates
If you’ve gotten my pricing calculator template, it will help you effortlessly ‘practice’ setting rates & see how all the basic math works out for each service you offer, giving you your hourly rate, what amount of that total package feel goes toward Owner’s Pay, Expenses, Taxes, etc.
If you haven’t gotten it yet, you’ll need to pull out a calculator, a sheet of paper & a pencil/pen, then start trying the numbers to find what will work best for you right now, and write those down so you can remember what those Profit First percentages are for each package or service rate.
Here’s a free calculator to do the very basic math for you:
Service Package Fee Calculator
NOTE: If you don’t like the numbers you got in your result, enter some new ones & try again! Don’t worry, it doesn’t save or tell me what’s been entered so this is all for fun!
What that calculator is doing, is helping you:
pick a dollar amount for your hourly rate, maybe out of thin air if you have no idea where to start
then multiply that number by two! Remember, if you're following the Profit First system, you are only paying yourself half of whatever you're actually charging. So if you want to actually get paid a certain amount per project, you’ll have to double your rate to get it
now you have your new hourly rate, once you have that doubled number (your initially chosen hourly rate x2)
multiply that new rate by ____ hours you think it will take you to do the project to get your starting package fee.
then divide that package fee by the following (to get the breakdown for Profit First):
0.5 = 50% of the package fee for your paychecks
0.25 = 25% of the package fee for Taxes
0.2 = 20% for the package fee for Expenses
0.05 = 5% for the package fee for Profit
You can change any of the percentages if you need/want to, but if you do, please make sure those 4 percentages still total 100%, otherwise you’ll have money leftover or you’ll be overspending (divvying up money you don’t actually have).
Communicating your rates
I encourage you to display a price range (or at least ‘starting at’ prices) on your website where you talk about your services. To learn more about my thoughts on why, check out this post next!
If you don’t want to use Profit First in your business, then I have no idea why you’ve read this post all the way down here, –but I digress! 😂 If that’s you, check out this post to learn the basic pricing method without using Profit First.
Project Expenses
It’s always a good idea to also consider project-specific expenses & add those amounts to your package fee. For example, if you have extra expenses that you tend to have in your projects/services (like fonts for your branding packages, or if you tend to hire a copywriter, or if you tend to purchase code plugins, hire a developer, or start with a template, etc), up your package fee to include that cost for each project, so it doesn’t take away from what you pay yourself.
PRO TIP: KEEP TRACK OF YOUR LICENSES
Make sure you’re really careful with the user license for anything you buy to use for someone else, because technically many of those licenses are not transferable between individuals unless you’ve specifically purchased a commercial use or business license for that thing, and even then the license isn’t for your client to use in that manner, it’s for you to use for your clients.
A very common example is buying a custom font to use for a client in a design project: that's your license, not the client's & you can’t technically buy the font & then ‘give’ the license to someone else. The client will need to buy the font with the appropriate license also.
So just be careful with those kinds of things and make sure you're factoring that stuff into your rates, if applicable for you! Otherwise, you may be undercharging and then decide to also go buy all this extra stuff, and that extra stuff is cutting into your profit margin, your paychecks, etc.
Paying Yourself: A Practical Guide
The last piece to this is, of course, paying yourself! Which is arguably the most important piece, since if you don’t pay yourself you technically have a hobby, not a business. 😬
Here's what I've learned in the last few years, –because, yes, it did take me a long time to figure out how & when to pay myself when I couldn’t afford to hire someone to ask.
Choosing your bank
If you use a bank with a beginner-friendly & Profit First-friendly system, like Novo*, (there are others, I'm sure), it can automatically dump all of your income (deposits) into these buckets for you, which makes it a lot less tempting to go back in there and move some stuff around because you don’t have the initial control over what percentages of your money go into which bucket, though you can move them around later but that’d defeat the whole purpose.
You might’ve heard that some banks can set up a system that will divide your deposits into multiple accounts you have with that bank, like checking, savings, investment accounts, etc.This is the same concept! So if you’re in the market for a new business checking account, make sure you pick a bank account that will make it easy for you to be smarter with your money.
Figuring out how & when to pay yourself
The next step in managing your finances as a business owner is deciding on your payment system. This is where you will determine how much you are going to pay yourself from your owner's pay bucket. This is the source of your personal income.
If you have a substantial amount in there, you have the freedom to decide on a number that you want to pay yourself –which should not be the FULL amount, FYI.
The goal is to figure out how long that amount can sustainably pay you. So if you build up $10,000 in that Owner’s Pay bucket, rather than literally paying yourself $10,000 right now, you could instead pay yourself $1,000 every other week for 10 paychecks (that’s about $2,000/mo x 5 months).
This way, you have 5 months to add more money to the bucket to replenish what you’re taking out, and that becomes the ongoing process as long as you always have money coming in to keep replenishing the buckets. Then, once you start maintaining a larger number, you can change the amount you pay yourself &/or the regularity.
It may be small paychecks at first and that’s okay!
To hear some relatably REAL paycheck numbers, check out this podcast linked in the resources section above.
As for my numbers, when I finally started paying myself on a regular basis, I was paying myself $1,000 every other week (so $2,000/month), and this was during a period where I was actually hitting $10k months here and there, with $5k months being more average, and a couple months with very low revenue during slower seasons. BUT, because I purposefully chose a lower paycheck amount, I was able to stay consistent with that pay schedule for over a year, even through the slower seasons, because I’d built up my Owner’s Pay bucket during my busier seasons.
So, make it a smart choice. Do not just pull all of it out at once, because soon you’ll be wondering where it all went. It's much harder to guarantee that you can pay your bills when you pull out $10,000 one month and then there's nothing left for the other months between the next paycheck.
As for how to send the money to yourself, if you are using an account like Novo (or basically anything else), all you have to do is send (transfer) that money to your personal bank account; it doesn’t even have to be a personal checking account at the same bank. In my experience, most banks will let you transfer money to yourself between banks, without fees, unless there’s different currencies between accounts.
You don't have to write yourself a check, or go into QuickBooks and sign up for their payroll. If you are just figuring out how to pay yourself, most likely –and again, I'm not a financial expert– it's an assumption that you probably aren't, for example, an S corp LLC that has yourself on a payroll and you get a rigid paycheck every week or every month or whatever because they are required to have a set salary.
You just manually transfer that money to your personal bank account on a regular basis, or set up an automation to do it within your bank’s settings. I have a Google Calendar event that reminds me when to deposit my paycheck, and it usually deposits into my personal bank account within 1 business day.
Some people suggest that you should take an average paycheck from the PREVIOUS year. You can figure that out by looking at your total earned the year before (excluding what you spent on expenses), divide that by 12 (months) to get a monthly check, or divide that number by 2 to get a 2x monthly paycheck amount. This is actually a pretty smart approach, but it's going to feel slow to a lot of people, because in the year you’re paying yourself, you might be earning a lot more than the previous year & that may play mind games with ya! If that feels good to you though, go for it!
When I started, I made nothing the previous year. I broke even because I spent just as much as I made on reinvesting in my business. I didn't have anything to average out. I just had to start with the income that I was getting in the current year. So we all have to start somewhere, and pick a method that works best for us.
And of course, if you're not sure please go ask a bookkeeper, a money coach, a CPA, or somebody who knows more about this than I do! I'm just sharing my personal experience here.
The essential part to remember here is that your income will fluctuate a bit every year, and paying yourself an average of the previous year, or paying yourself a smart percentage of what you’ve earned in Owner’s Pay (ie: not paying out the full balance of that bucket all the time, but making it stretch as long as it can so you have time to refill the bucket as you continue to pay yourself) are two ways to ensure you can pay yourself sustainably.
Recently, I listened to a phenomenal podcast where the host discussed this exact thing, and she actually shared her real "this is what I’ve paid myself" numbers. It was NOT the glamorous six-figure numbers that you might hear from basically every other human on the planet in this space, which is so refreshing to hear the honesty & vulnerability in that. That episode is linked here and also with some other resources in the accordion a few sections above.
If you’re feeling like this ALL sounds impossible from where you stand right now ––I get it. Listen to that episode, it will probably help! I think it will also inspire you to realize that the goal post is not quite so far away.
If you got all the way to the end of this post and you're like, "Oh, okay. I hate this part. I do not like the math," I hear you! I was an art & design major in college, I never did well in my math classes throughout school either. But now, as an adult, I can say that I do love spreadsheets (because they do the math FOR me!)
If you hate the numbers, I made a spreadsheet for you (because I love a good spreadsheet or wiki)! I still hate math, but the spreadsheet does it for us!
So if you're sitting here thinking, I would love to do that without a calculator, go grab the pricing calculator Google sheet in my shop and save yourself the headache!
Real talk wrap-up
I hope that sharing all this helps make it feel easier to see the possibility of paying yourself soon, ––or at least get some insight on how someone like me started paying myself when I have no background in finance, no background in business sense, or even math! I've just learned from my own mistakes, so I'm hoping that my mistakes, what I've learned from them, the experiences that I gained, how I've pivoted and changed, –can help you too.
Because we all have bills to pay in this world with ever-increasing costs of everything. And we all want the feeling of having a stable income!
I believe, if you do it this way with the Profit First system, then you’ll be able to actually earn an income without accidentally throwing it away just because you didn't know how to manage the income you earned.
Without Profit First, you might log in to your bank account & see that it says $5,000 is available, but that's all you know. You don't know how much of that is needed to set aside for taxes, for expenses, or for paying yourself, because it's all in one lump sum. So unless you pull it out and put it into physical or digital envelopes, or even literal buckets, ––it's going to get lost very easily. And at the end of the year, you're not going to have anything set aside to pay your taxes, you're going to be stressed out, you don't know how much to pay yourself at any time so you will either NOT pay yourself or OVERpay yourself, and you won't be profitable because you haven't been setting aside actual profit all year long. Because we have to do this on purpose.
TLDR: If you don't do something with your money ––if you don't give it a job–– it will not work for you. 🤷🏼♀️