Finance is not a bad F word. You CAN do the math.

True story: I don't like horror movies or haunted houses. You'll often find me with my hands over my eyes. So whether you're a horror enthusiast or not I've noticed that when I bring up finances, people often jump, like they've walked into a spiderweb.

Finance is not a bad F word.

Math doesn't have to be scary.

You don't have to fear your numbers.

You may be one of the many people who have been saying "I'm not good at math" for years. That is the most common response I hear when it's time to start talking about your numbers.

I'll let you in on a little secret, you CAN be good at math, you might just have some habits you're unaware of. Try this.

Step 1: Keep it simple

In the beginning your transactions are simple so, stick to a simple equation to understand your finances.

You only need to know What did I bring in? and What did I spend?

What did I bring in? = Revenue or Income

What did I spend? = Expenses

Getting to these numbers are easy too. If you use an ecommerce site like Shopify or Etsy for your products your 'What did I bring in?' will be right on your dashboard. Same goes for bookkeeping software like QuickBooks, or Xero, check your dashboard for the total amount you invoiced. Expenses are just as easy to locate if you use bookkeeping tools like the one I mentioned above or Monarch Money, Simplifi, or Credit Karma (which replaced Mint).

But Krystal, I don't have a dashboard or fancy tools. That's fine too, start where you are. Where do you get paid? And what account do you spend your money out of? Check out your credit card statements, and bank statements. Note that having a separate business checking account will save you time so you don't have to look through your personal transactions to find the business ones. Until you open a separate business account you may have to rely on excel or google sheets to track your numbers. I have a few basic templates, if you need one.

Once you have those numbers you can figure out whether you're making money or not. If "what did I bring in" is bigger than "what did I spend", then you're making a profit. If not then you're at a loss.

Income greater than Expenses? You have a Net Income

Income less than Expenses? You have a Net Loss

If you're at a loss, don't throw in the towel just yet. Numbers are information and if you look at the information you can make better decisions.

Step 2: Take the time to look.

As I said, numbers are information and all you have to do is look at your information regularly.

According to Rachel Rodgers, author of "We Should All Be Millionaires", it is important to look at your numbers daily because you can catch issues before they arise and so you can notice patterns in your spending and earning.

I agree but I also understand how that can feel like a lot in the beginning, especially if you're not seeing a lot of activity in your income or spending. To that I say, start with weekly (or at the very least monthly) check ins. Block time on your calendar to review regularly. You need to know what your money is doing.

It's always good to reduce your expenses when those expenses aren't improving your bottom line. Wait, Krystal's what's my bottom line?

That's your number from step 1, go you! It's your net income or net loss. It's simply called a bottom line because it refers to the last line on a financial statement after you've calculated your income and expenses. It means how much money is left after you paid your expenses for that period. So how do you adjust your bottom line? Let's keep going.

Step 3: Assess your habits

When I was working with one young woman she couldn't figure out where her money was going. "Apart from my bills, the only things I buy are food, gas, and an occasional trip to Targét." So we pulled up her transaction history - because numbers are information - and what we found was a pattern of food delivery charges. She admitted she'd been using it more often because of the convenience. By not looking at her numbers regularly she didn't realize how often. I asked how much she thought she was spending and she gave a guess. Then we added them all up.

Can you guess which number was higher?

Definitely the actuals. She didn't realize how much she was spending ordering food delivery simply because she wasn't looking. By seeing where her money was going, she could better decide her next best step.

When you look at your numbers, consider how you use what you're paying for. Two examples:

• Do you have the pro version of a service tool (Zoom, Canva, Notion, Clickup, Asana, etc)? Are you actively using those pro features?

  • No? Then downgrade your subscription.

  • It's like going to the store to buy 1 mixing bowl but there's a 5 mixing bowl set for a little bit more so you buy that one. Inevitably those other 4 bowls sit in the cabinet until you donate them since you only needed one bowl. Take the time to look at what you really need.

• Did you sign up for a business membership but don't have time to engage in the community?

  • You have two options there, either make the time to engage and be in action so you can see the benefits OR cancel the membership.

  • Now may not be the right time. Know that you can always upgrade or re-sign up when the time is right.

In conclusion, remember, that numbers are information. Based on the information, you can make the best informed decisions that support your business and your life.

You've got this!