Your mind is a powerful tool as you build your business. However, it can be easy to let your mind become a battleground for anxiety if you aren’t careful. Instead, overcome your financial anxiety by completely changing your mindset. These are the thought patterns that are holding you back from your financial goals…and how to beat them.
It’s amazing how powerful our thoughts can be. They can propel us to fantastic achievements or keep us from moving at all. Our thoughts can affect how well we handle money as well. Not only do they influence our judgment but they direct our actions too.
If you’ve ever experienced this, you aren’t alone. In fact, there are some pretty common financial thought patterns that hold many people back.
Thankfully, there are easy ways to turn those mindsets around to work in your favor.
How To Overcome Financial Anxiety
Financial anxiety is a very common experience for lots of people. According to the American Psychological Association, financial worries are high on American’s lists of anxieties.
Is it on yours?
Financial anxiety is defined as “a psychosocial syndrome whereby individuals have an uneasy and unhealthy attitude toward engaging with and administering their personal finances in an effective way.”
This can also transfer to your business finances as well. If you don’t feel comfortable doing your personal finances, you will probably want to avoid your business ones too.
The best thing you can do is to admit that money stresses you out. Then, follow these steps listed below to conquer your financial anxiety and gain control.
Face Your Fear
The first step is to gather the strength to face your fear. Admit that it worries you and create a plan to conquer it.
A common mindset lots of people have goes like this: I’ve never been good with money. I’m sticking my head in the sand.
That’s the worst thing you can do.
When you don’t know where your money is going, you have no way of telling if it’s thriving or sinking.
Instead, you need to make a plan and learn how to pay yourself as a business owner, among other basic skills.
Build Basic Skills
If you own a business, you have to build the skills to be comfortable with money. Just like learning how to swim helps people overcome their fear of water, learning financial skills can help you cope with financial anxiety.
First, learn the difference between assets and liabilities. This knowledge provides the foundation for the next skill: how to set up a budget for your business.
If this is your first time learning about these skills, I recommend starting with my ultimate guide to organizing your business finances. It will take you step-by-step through everything you need to know.
- How to separate your personal and business taxes
- How to do taxes the right way
- The best system of keeping track of expenses and receipts
Gain Control of Your Finances
Avoiding your numbers means you’re not in control, which can lead to anxiety about finances and crises that are out of your control.
The next step in overcoming financial anxiety is to get back in control of it. One easy and practical way to do this is to create a budget. Not having a budget can be a main source of feeling out of control because you’re not telling your money where to go, or being intentional about what happens with it.
Learn those skills and dig into your accounting. Learn where your money is going and make some decisions about whether to keep paying for them or let them go.
Utilize A User-Friendly System
Finally, if you want to overcome financial anxiety, set up a user-friendly accounting system.
What do you currently use? Do you feel like it’s too daunting and difficult to learn?
Try switching to Freshbooks.
I have had clients who were paying for QuickBooks and never looked at it because it was confusing. Once they switched to FreshBooks, they started looking at their numbers more because it was more user-friendly to look at.
I wrote a detailed comparison of Freshbooks vs Quickbooks. There are lots of similarities and differences. Try them both out and see which one you like the best.
The worst thing you can do is feel like you are flying blind with your finances. You need to set up a program that you feel confident you can use reliably.
No one is going to care more about the money in your business than you.
This is your business. It’s dear to your heart.
Don’t let a fear of money hold you back. Create a plan and tackle your anxiety so you can regain control of your business finances again.
Hire a Financial Coach
Sometimes people will need a person to talk them through their anxiety and keep them accountable to make these changes. Many people have a deep fear of money based on family background. That’s where a financial coach comes in.
If you haven’t worked with one before, this post will explain what a financial coach does, as well as how we are different from financial planners.
By the way, if you are looking for a financial coach who understands small businesses, I’d love to chat with you!
If you are unable to hire a financial coach, you can still get a lot of wisdom from money mindset books. One of my favorites is Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth by T. Harv Eker. I have several more book recommendations here as well!
How To Think About Money Without Getting Financial Anxiety
There are lots of ways that people view money and some of these thought-patterns are holding them back. Maybe they feel anxiety at the idea that money could just vanish one day which can cause hoarding and panic.
Others might feel overwhelmed, unable to understand it at all. This leads to a lack of involvement in their business’s accounting.
Instead, you should view money as a positive thing. Plan ahead for changes and look at accounting as a challenge that you welcome.
View It As A Positive Thing
First, you need to view money as a positive thing. With money, you will have access to more tools for your business that can help your company grow and flourish.
Look at finances as just another tool in your toolbox. Nothing more, nothing less. Positive cash flow can open lots of doors for you and your business.
More money can also give you the chance to give back in bigger ways. When you make a reliable profit, you will have the funds to give back to charities and organizations that are dear to your heart.
Plan For Changes
Next, admit that financial changes are going to come.
The stock market is not a straight line up. Businesses go through periods of high profit and times of low. It’s normal, quite normal actually.
Plan ahead for these changes instead of allowing them to derail you or make you want to avoid it entirely.
How do you plan for financial changes?
Set up smart investments and diversify your income streams. Put aside money in a savings account for emergencies.
Financial lows happen to everyone. This stresses some people out, but if you plan ahead for them, they aren’t so scary and you’ll be one step ahead.
Dedicate Time to Focus On It
Lastly, set aside time to continue your financial education and focus on your bookkeeping. Stop avoiding it and face it head-on.
Learn how to read a profit and loss statement and then create your own. Spend time each week reviewing and making changes to your business budget. Do all you can dig into your business finances and be in control of them.
Actually doing it – even if you take small baby steps – is the best way to overcome your fear of money. Think about money as more of an adventure than a daunting challenge.
There are answers out there; it’s not impossible to understand.
If you still struggle with understanding your business’s finances, I’m here to help. Contact me with any of your questions. I’d love to set up a personal coaching package just for you to help you understand your own anxieties and how to break through them.
Master The Money Course
I’m also offering a course where we’ll deal with both the mindset of money and the practicals behind what to actually do to get your business finances in order. It’s only open a few times a year, so read more about it and grab a spot here!
What Is A Fear of Money?
Please don’t think I am taking this too lightly. There are some people with a diagnosable phobia of money. This is called Chrometophobia.
I’m not a therapist or a doctor. If you think you have a debilitating fear of money that immobilizes you or interferes in your daily life, please talk to someone.
Find a therapist near you. This is nothing to be ashamed of. There is real help out there to help you overcome your phobia and regain control of your finances.
Financial Anxiety: Final Thoughts
Financial anxiety is a very real thing. Thankfully, it’s also something you can overcome.
Knowledge is power. Take some time to invest in your business by learning about money. There are lots of online courses you can take at your pace. Reach out to me and I will set up a personalized action plan just for you.
Stop thinking you can’t do this and start regaining control.
Current Resources for Businesses During the Pandemic
I also wanted to take a moment to let you know about some current resources and opportunities available for small businesses based in the United States.
Please be aware that while I do my best to provide current information, the situation is changing daily. As of mid-April, these programs continue to evolve and some funding has run out. However, keep checking back as the government and Small Business Administration may get more funding and applications seem to be processed in a first-come, first-served basis.
Paycheck Protection Program (PPP)
With the Paycheck Protection Program, businesses can apply for up to $10m loan, which is forgivable if you meet certain milestones on maintaining your payroll. Additionally, independent contractors can now apply as of April 10th, 2020.
The primary goal is to help businesses retain their staff (including yourself!) during the current crisis.
The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll). Loan payments will also be deferred for six months. This loan has a maturity of 2 years and an interest rate of 1%.
Lenders were allowed to process as of April 3rd, 2020, but many did not have the infrastructure ready yet—it’s best to check with your bank and see what they recommend.
Economic Injury Disaster Loan (EIDL) & Grants
With this program, small business owners can receive a $10K cash advance and apply up to $2m.
The $10K advance does not need to be repaid under any circumstance and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent, and mortgage payments.
One major perk is the $10K advance is said to be available within three days of a successful application. However, the amount of time it takes to get a successful application can vary widely. It’s worth applying for as this loan advance will not have be repaid.