How to Start the New Year with a Fresh Approach to Finances


This post is brought to you by FreshBooks.
One of the best financial tips I’ve received: Make a plan. 

In 2019, Wit & Delight had $579,000 in expenses. 

At some point, what started as my side hustle has grown into an actual business, one that cost me over half a million dollars to keep the lights on and the doors open. While that’s a big number to some and a tiny to others, the reality of managing cash flow is something I was NOT prepared to tackle. 

In previous years, just about any amount in the red (let alone a number with more than two zeros) would’ve sent me straight into a full-blown panic attack. But that was before I changed my relationship with finances. Through vast amounts of trial and error (a LOT of error), I’ve managed to change some of my worst financial habits. And if I had to do it all over again, I’d do a lot of things differently. 

Here are my five tips for managing your bottom line so you can begin the new year with a fresh approach to finances. 

Get to know (and love) Profit & Loss reports.

1 Work with a professional. Hands down, the biggest mistake I made was thinking I could do it all myself. How hard could it be to write an estimate? Or send an invoice? I know how to balance a checkbook, so why would I pay for someone or a software to do that for me? Don’t be like past Kate. It is HARD. It is TIME-CONSUMING. It’s a full-time job. One that I am wholly unqualified for.

At the outset, I created a spreadsheet to track where I was with finances, because that seemed like the thing to do. The problem was that I didn’t know what I should’ve been tracking, or more importantly, how to build a spreadsheet. I was left with the responsibility of following up and staying on track with these figures on top of the actual work that I was doing day-to-day. Mistake number one was not using an accounting software platform, like FreshBooks, from the get-go. 

FreshBooks is like having your very own bookkeeper, without having to admit to another human you are horrible with money.

2 Know your numbers. I always had a good idea of what was coming in and what was going out, but I never got into the weeds with it, which you ABSOLUTELY SHOULD BE DOING, small business or just as an adult task. Pennies add up to dollars, and over time, my guesstimating and “I think we’re good” mentality came back to haunt me. There were a few weeks where I didn’t take home a paycheck from W&D due to overestimating the bank balance. 

One incredibly simple way to avoid more than a few sleepless nights is to use accounting software such as FreshBooks to track numbers and provide me with an actual figure vs. relying on my own gut feeling. These programs generally have an intuitive dashboard that can show you where your finances are at a glance, without having to know or input a single Excel formula.

Schedule time weekly to review finances.

3 Stay on track. I used to be a CPA’s worst nightmare; the client that comes in the first week of April with a pile of unopened W-2 envelopes, a stack of invoices and receipts, and a look of utter desperation in my eyes. If I could go back in time, I’d set a weekly reminder to generate and look at my P&L (profit and loss, FYI). Setting aside only one hour a week (schedule it in with your Stay on Track Notepad!) would’ve saved so much time and stomach acid.

In addition to starting my weekly financial check-in, I’ve gotten MUCH better at recording and tracking receipts as I go, a plan of action I prefer much more than how I used to track expensesa late-night panic at the end of the year as I searched through bank accounts, trying to decipher what was an expense and what wasn’t. 

Getting ready for tax season used to be a nightmare, because I used to wait until the very last minute to do everything. However, by slowly changing my habits (by using my handy habit tracker), these incremental tasks have become so much more manageable in the day-to-day.

There are expense tracking apps you can use to stay on top of expenses and purchases on the go, which means no more digging through a pile of receipts on April 14.

Reviewing transactions with accounting software, such as FreshBooks, makes it easy to stay on track.

4 Face your financial fears. Working in an unstable economy is scary. Running a small business is terrifying. Heck, being a human having to navigate through the necessary expenses of everyday life is utterly overwhelming. All I saw when I started down the entrepreneurial path was open workspaces, coffee shops, and big ol’ contract checks. What awaited me that first year (and many years following) was the harsh reality of quarterly payments, late tax penalties, and clients that didn’t pay until ninety days after the invoice was sent.

One of my biggest financial fears was being open and honest with Joe about the business and expenses. It’s hard coming to the table, sitting down, and telling your spouse you’re not getting paid this month due to an overlooked invoice or unexpected expense. Or that it was a slow quarter and that the collective “we” has to watch what we spend. He didn’t choose to become an entrepreneur or to have an unstable income; this was my choice. Due to my actions (and at times, inactions), he is dealing with the consequences. That first “bad month” conversation made my heart pound. But we made a plan and, thankfully, weathered that storm plus a few additional storms after it.

5 Ask for help. Being vulnerable and admitting I don’t know something is still the scariest thing I do with my business. I’m a proud person, and I don’t like showing vulnerability. It was pride (and a bit of shame thrown in for good measure) that kept me running my books all on my own for far too long. I made the leap to leave my full-time job to focus on W&D and I was going to do everything myself, all the way from estimates to invoicing.

Looking back, I could’ve saved time and energy had I automated some of these tasks. Invoicing reminders. Allowing automated payments. Keeping track of my time. These are a few of the bare minimum things I could’ve done to take tasks off my plate so I could focus more on design and creating new products. 

My most significant piece of advice: Don’t wing it. 

No matter what your business, spend time and energy on both the creative and financial.

If I could do it all over again, from day one, I’d focus on the business side of the business just as much as the creative side.  

I’m looking forward to having more transparent conversations around money this year—why it makes us uncomfortable, why sometimes we feel undeserving of it, and how to turn the topic from taboo to empowering by being more comfortable exploring how money can help small businesses do good in the world. 

All of us have some kind of belief system around money that influences the way we spend, save, and prepare for the future. I’m looking forward to guiding those conversations and providing real tools that are built for breaking down barriers and providing a more approachable way to get control of our finances. 

FreshBooks has everything you need to keep track of your side hustle, main hustle, or personal finances. Ready to start fresh with finances? Learn more about FreshBooks here and manage your finances like a pro.  

Ed. note: This post was sponsored by FreshBooks. The compensation we receive in exchange for placement on Wit & Delight is used to purchase props, hire a photographer, write/edit the blog post, and support the larger team behind Wit & Delight.

While compensation was received in exchange for coverage, all thoughts and opinions are always my own. Sponsored posts like these allow us to continue to develop dynamic unsponsored content. Thank you for supporting our partners!

BY Kate Arends - January 22, 2020


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