When things are tight and cash flow is a problem, life kind of stinks. You want to take vacation, but can’t afford it. You want to buy certain things, but there simply isn’t any extra money. You manage your budget pretty well, but those unexpected expenses keep popping up and it feels like you’re never going to get ahead. You’re working like a dog, pulling long hours, and yet you aren’t making enough to really enjoy life.
Eventually you find yourself living to work. I get it. I’ve been there.
I’ve sat in my office working like crazy, wondering what I was doing wrong, wondering, “How is it that I’m working this hard and cash flow is so tight?” Like everyone, my immediate thought was that I needed more to close more sales. I needed to network more. I needed more clients.
Yes, more sales and more clients is a viable path to cash, but more clients and more money isn’t always the best answer because more clients also means more work.
Again, I’ve been there. My search for more freedom began with a quest for more clients and more money. I figured if I made more money, I’d have the financial freedom to take more vacations, and go more places, and buy more of the things I wanted — and I was right. But there were consequences. While I had more money, I had less time. I had reached a new level of financial freedom, but I was working so much, I didn’t have time to actually enjoy the fruits of my labor.
I was living to work and I wanted to be working to live.
The Truth About More Money And More Freedom
I needed to make some changes in regards to my spending. I needed to define the lifestyle I wanted for myself and my family, and I needed to a new approach. Around this same time, my husband was diagnosed with Gall Bladder Cancer and our future was sort of up in the air.
So Brian and I had discussion about the business, clients, and the type of work we wanted to do. We talked about our family and what we wanted the next phase of life to look like, and what needed to change to make life easier and less stressful for him during his health crisis — and the number one action we could take was to reduce the financial requirements of our day-to-day lives.
Here’s what we outlined, and it’s still true today:
- We enjoy our business, Bourn Creative, and we enjoy working hard and being challenged, we love what we do, we and want to continue to do great work for great clients that we truly enjoy working with and who value the expertise we bring to the table.
- We want to give back to the WordPress community that has been so good to us by organizing the Sacramento WordPress Meetup and WordCamp Sacramento.
- We want our nights and weekends to be for personal time and family time, spending as much of it as possible together as a family, playing games, having fun, going to concerts, making memories, and going on adventures.
- We want time in our schedules to pursue personal hobbies and work on personal/passion projects just for fun.
- We want to eliminate overwhelm and stress, feel inspired and fulfilled, nurture rich relationships, and enjoy more happiness, love, and joy.
Ultimately, we want to truly enjoy our work, we want to feel inspired and fulfilled, and we want to experience amazing adventures with our kids — we want to work to live, not live to work.
In looking at our lifestyle goals, we realized that none of our lifestyle goals aligned with more clients and more money. Now don’t get me wrong, more money is always a good thing — it leads to more vacations, more travel, more adventure, and more opportunities to give back, support others, and make a difference. I’ll never say no to more money and I’ll always pursue new opportunities, but…
Sometimes it’s not about making more money, it’s about spending less of what you already have, as spending less is a direct path to more financial freedom.
When we began to evaluate the lifestyle we wanted for our family, we realized that making more money takes more work, often a lot of work. But having more cash on hand and spending less money takes less work, often almost no work.
There are three ways to reach financial freedom:
- You can make more money.
- You can save more money.
- You can spend less money.
Over the years, we have successfully made all three options — make more, save more, spend less — a reality, and we also moved to a cash only lifestyle. The very first step in our journey to financial freedom was spending less. We knew that trimming our expenses and slashing our budget would make an immediate impact, and through the process, we were able to cut more than $2,000 from our monthly spending.
What would you do with an extra $2,000 a month? How would that change things in your life, in your family, in your business?
We started with an evaluation of exactly where our money was going and what we were spending it on. Luckily, Brian has always been fanatical about our expense tracking, so it was pretty easy to pull up the expense reports for both our business and our personal accounts. We looked closely at every expense category and identified areas and items that could be eliminated or trimmed down.
We first got rid of the monthly payments for anything we didn’t actively use (like the gym membership), and we looked at expenses that weren’t necessities but just extra spending (like trips to Target and eating out) and made plans on how to cut back that spending. We then looked at expenses that could be reduced if we switched providers or changed our plans (like cable, phone, and our CRM solution), we researched and compared new options, and made the changes needed — often to better solutions.
At first it was tough. We were all a bit curious about how this would work out and a bit skeptical. But you know what? We didn’t miss eating out all the time because we were actually eating better tasting, healthier meals at home. I didn’t miss the gym. We didn’t miss all those cable channels we never watched. We didn’t miss the spontaneous Target runs buying up things we didn’t really need. In fact we didn’t miss the things at all, and over time, we all came to realize that we really don’t need many of the things we thought we did.
Trimming our expenses and being more responsible spenders helped us live a more minimalist lifestyle and a happier life. Plus, it freed up $2,000/month we didn’t have before! That’s $2,000 that now could go toward family adventures and vacations, business travel and conferences, or even big personal purchases like furniture. Or if you change your perspective, that’s $2,000 less work we needed to sell every month.
Curious how we cut $2,000 from our monthly expenses? I’ll break it down for you:
We have two main types of monthly expenses:
- Personal expenses
- Business expenses
While the two are completely separate, both come out of our pockets and affect our family.
I know a lot of people who watch their personal budgets closely, but spend willy-nilly in their business because it’s “business money” — but it’s critical that you’re just as ruthless with your business budget as you are with your personal budget. The more profits my business retains, the more I have to reinvest, to put into our 401Ks, or have available for bonuses!
Trim The Personal Expenses
- Expense: $80/month for landline
- Change: Switched to Line2 for business telephone for $20/month ($9.99/month line)
- Savings: $60/month
We originally had two landlines, one for our family and one for the business. We got rid of the family landline and moved to only using our cell phones several years ago, and only recently got rid of the business landline too. It was just too expensive, call forwarding to our iPhones was a pain, and frankly, our devices were just crappy.
Because we already have our iPhones with us 24/7, we wanted something that worked through the iPhone and got new business phone numbers through the Line2 — which also gave us our own business phone numbers.
- Expense: $60/month for basic cable, $15/month for TiVo, and $10 for Netflix
- Change: Switch to Netflix and Hulu Plus for $20/month total
- Savings: $65/month
Cable gives you access to TONS of television channels and there is still never anything on to watch. We found ourselves buying DVDs of TV shows, using TiVo to record shows to avoid commercials, and really only watching shows on a few channels, most of which weren’t even cable channels.
We talked about getting rid of cable for almost year. The kids didn’t want to give it up because they’d lose SpongeBob and Disney Channel, and I didn’t want to lose the Food Network. Eventually though, Brian convinced us to make the switch. At first it was tough. I missed my Food Network shows and the kids REALLY missed their shows. But over time we got used to it and everyone loved the ability to binge watch episode after episode when we had time.
With Netflix and Hulu Plus we watch more episodes in a sitting than we did before, I actually think we watch less TV than we did with cable and TiVo. And zero commercials is the best thing ever. No waiting and no kids discovering and asking for stupid toys. It’s a win across the board.
- Expense: Hadn’t audited our plan in a while
- Change: Switched plans to unlimited talk and text plan to accommodate my tween’s texting and the move to Convoi for our business phone numbers
- Savings: $50/month
We hadn’t reviewed our cell phone plan in years. When my daughter got her phone we just added it to ours. But then she started texting. Let me just say that NO ONE texts as much as a tween does and we started getting massive texting overages. This was around the same time, we got rid of our landline and got new business phone numbers through the Convoi iPhone app. This meant we needed a new plan with unlimited talk and text and ended up saving $50 with the new plan.
- Expense: $100/month for California Family Fitness
- Change: Started working out at home (because I wasn’t going anyway)
- Savings: $100/month
We were paying the monthly fees for a gym membership and gym childcare, and I never used it. I kept paying the fee month after month because I intended to go, I wanted myself to go, but I hated going. It wasn’t a priority and I didn’t have time for it. Eventually I had to admit to myself that I am just not a gym person. I wasn’t EVER going to make time to ditch the family and hit the gym.
So I bought a Fitbit, bought the T25 workout program, and began working out at home. We also started going on walks with the whole family several times a week. And you know what? Everyone lost some weight and got some exercise because when mom is focused on healthy habits, they whole family develops them right alongside her.
This shift not only saved us money but improved the health of our whole family.
Groceries And Dining Out
- Expense: $1,600/month for groceries and restaurants
- Change: Switched to a $800/month cash food budget and began cooking at home much more
- Savings: $800/month
In the early years of my life as a business owner, I wasn’t a very good business owner. I was in a state of entrepreneur overwhelm 24/7. My husband was, at the time, working full time as a captain with the fire department. He was also working on his days off to reinvent himself as a developer. For five years, he worked the equivalent of two full time jobs — almost 100 hours a week — to learn an entire new set of skills and change careers. At the same time, I was pulling 50 hour workweeks and we had two small children and no daycare.
It was a crazy time in our lives and completely worth the short-term sacrifice for the long-term gain. But during that time we got really, really lazy about cooking. In fact, we pretty much never cooked. We ate out a lot, sometimes twice a day, occasionally three times a day. By the end of the day “working in the kitchen” was the last thing either of us wanted to do.
When Brian was diagnosed with cancer, everything changed. He wasn’t sure how sick he would get and if it would affect his ability to work or not, so trimming expenses became really important.
Cooking was one of the only things I could do for him and through regular grocery shopping and planning and prepping meals in advance, we slashed our food costs in half. Luckily Brian’s prognosis was much better than we originally thought and it wasn’t an issue, but going back to that wasteful spending on eating out seemed crazy, so we decided to stick with the cash food budget permanently.
- Expense: Ugh. Health care is nuts
- Change: Switched from an HMO plan to a PPO plan
- Savings: $500/month
Health care is just insane. We wanted to stay with the same hospital system and doctors (UC Davis) and we didn’t want to sacrifice our level of care, but we wanted to reduce the cost. We switched from an HMO plan to a PPO plan with a lower premium and slightly higher out of pocket expenses. While it now costs us a little more to go to the doctor and to have prescriptions filled, as long as nothing catastrophic happens, we still come out ahead. Luckily, we’re all pretty healthy and rarely ever have to go to the doctor.
Spontaneous Spending (Target Runs)
- Expense: $300/month in spontaneous, extra spending that wasn’t budgeted for
- Change: Stopped going to fun stores “just because” and put Brian in charge of the “Target Run”
- Savings: $200/month
I am the point of sale marketer’s dream. Put something cool on sale near the register and I’ll buy it. I am a spontaneous shopper who will load my cart up with things I never intended to buy just because. None of these things bode well for our budget, especially when the kids and I stop at Target for one thing and leave with 15 things. It also caused some marital frustration when the kids and I would go to the craft store or Cost Plus or the mall “just because” and buy a bunch of stuff we didn’t need.
I still splurge here and there, but simply by skipping the extra trips and changing who was responsible for specific errands — Brian now does the Target Run — we were able to cut spending on random items that we didn’t need and didn’t miss.
- Expense: $30/month in razors for three people
- Change: Switched to Dollar Shave Club for $9/month
- Savings: $21/month
Don’t even get me started on the cost of razors, especially now that we have three people who shave in the house! Buying three people packages of razors for $17.99 each was nuts. It literally hurt to put the packages of razors in my shopping cart. So we also made the switch to Dollar Shave Club and now pay $9.00/month for razors. And yes, Natalie and I switched too. You may not believe me, but these razors are actually better than the ones I was paying much more for and I get a much smoother shave.
- Expense: $40/month for one lunch with the kiddos
- Change: Earn points for free food with rewards card
- Savings: $40/month
My son is a picky eater, so when we eat out as a family, we try to choose a restaurant we know he likes. It may not sound like a big deal to some people, but being able to get cheese pizza with the crust he likes, with light sauce and almost no cheese, is a BIG DEAL for my son.
So, when we do eat out with the kids, we often go to restaurants like Chilis that not only are happy to accommodate him, but that have rewards programs where we earn free food. The points earned add up fast, especially when we’re taking the entire extended family out to eat after a dance recital, karate belt ceremony, or school performance.
This means the kids and I usually have enough points to enjoy a “Game Lunch With Mom” for free! (That’s where just the three of us play games at the restaurant and get dessert instead of lunch.)
Trim The Business Expenses
- Expense: $200/month for Paychex
- Change: Switch to Gusto for $40/month
- Savings: $160/month
When we incorporated, Brian and I became employees of Bourn Creative and we needed a company to handle payroll, taxes, and all that goes with having employees. Paychex was a thorn in our side from the first day we began our relationship with them, but we needed them and at the time, they were the best option to manage payroll.
Here’s the problem with PayChex, almost every time we contacted them, we’d discover that we had been assigned a new rep who didn’t know us, couldn’t answer our questions, and made mistakes in how our bonuses and payroll was handled. Eventually we got so frustrated we looked for a new options. In the time we were with Paychex, several new competitors had launched and we discovered Gusto. Several of our friends use Gusto and highly recommended them, so we made the switch.
Gusto not only costs less, but it’s easier and faster to use, and has saved us time and energy.
- Expense: $250/month for Infusionsoft
- Change: Switch to Agile CRM with Gravity Forms and MailChimp integrations for $60/month
- Savings: $190/month
I originally invested in Infusionsoft to avoid hiring a virtual assistant or employee back in February of 2009. We were grandfathered in at a low rate and has access to everything the software offered. At first it was awesome, but then it became less and less awesome.
I’ll admit, because we’re developers and work to create software, we’re not their average customer and we could see the reality of their engineering issues more clearly than a normal customer. Eventually my love/hate relationship with the software turned more to hate/love and we spent six months researching other options and evaluating other tools. Finally we found Agile CRM through a referral from my friend Chris Lema and it did everything we needed with integrations with Gravity Forms and Mail Chimp.
We’ve been using Agile CRM for almost a year now and the switch has been glorious.
- Expense: $250/month for Shutterstock
- Change: Purchase smaller groups of images only when needed — Average: $50/month
- Savings: $200/month
Several years ago, we began working with a client who hired us for more small projects than any client we had ever worked with, and also made more revisions than any client I have ever worked with. Many of those changes were swapping out images — some of which the client originally chose. On some projects, we’d change the images five or six times to get them just right.
I was spending so much time working with and manipulating images, that it became easier and more cost-effective to pay for a monthly Shutterstock subscription for up to 750 images/month and use final high-res images in the design concepts than it was to download low resolution comps, get proofs, buy the high res version and replace it.
Having access to a subscription to get any images I needed at any time also changed my behavior. I am really busy and often didn’t have time to scour the internet for cheap stock photography, or scour the free stock photography sites. For any and all projects, I could just type in a keyword and download anything I wanted without worrying about cost.
Eventually over time, we began working with the revisions-happy client less and less, and we began doing fewer and fewer projects a year. That’s means we now need a lot less imagery.
Credit Card Processing
- Expense: A LOT of $$$ through Authorize.net
- Change: Switch majority of payments to check/money order
- Savings: $300/month
Making the decision to accept credit cards for client payments, and giving them the ability to setup automatic payment plans was a huge plus when we were working on projects for individual entrepreneurs and small clients who had tight budgets. It gave them flexibility and more options and it gave us an easy way to offer payment plans, ensure we always got paid, and turn the irregular income roller coaster into a regular, steady income we could depend on.
But as Bourn Creative grew and we continued to improve our craft, our clients, projects, and budgets also grew, and as a result, the amount of money we were losing in credit card processing fees got out of control. It was astounding. Eventually the fees became equal to, then more than the investment for a small website project with us! This basically meant we were doing at least one “free” project every year.
When we moved from Infusionsoft to Agile CRM, we no longer had shopping cart software. So moved our invoicing over to Quickbooks Online (which we were already using). While a portion of our clients still pay with a credit card, the payment options for large projects now only include payment by check or bank transfer. This means we’re keeping more of the money we’re making and those “free” hours we were losing have gone back into providing better service to our clients.
How You Can Get Started
You see, achieving financial freedom isn’t always about making more money and doing more work. Sometimes it’s about spending less money and in turn, doing less work so you have more time for fun and joy, and family.
Cancer was the catalyst for the serious reevaluation of our budget and adjustment of our spending. While cancer is never good, it did force us to get smarter with our money and take action to reduce the amount we needed to make every month to pay our bills.
The best part about this entire process, is that is wasn’t hard. It isn’t one huge overwhelming task, but the accumulation of lots of small tasks completed over time. Evaluating your expenses, making changes, and adjusting your spending takes lots of little baby steps, which means you can do it too.
I know I covered a lot in this post and we trimmed expenses in lots of different areas, but please understand that we didn’t do it all at one time. We did this one expense at a time, over a period of several months. Researching and testing new CRM software alone took more than 6 months.
Here’s how you can begin your path to financial freedom:
- Make time to sit down and seriously review all of your expenses and spending. (This is the hardest part of the process.)
- Identify all of the expenses for things you don’t actively use and can cancel immediately. (These are your “A” expenses.)
- Identify all of the expenses that aren’t necessities but just extra spending that can be trimmed back. (These are your “B” expenses.)
- Identify expenses that could be reduced if you switch plans or providers. (These are your “C” expenses.)
- Prioritize all of the expenses that require action in a single list — we listed the A expenses as the top priority, then the B expenses, then the C expenses last because they took the most effort.
- Take action on one expense at a time, moving down the list until they have all been dealt with.
Remember, take baby steps.
Don’t try to make all the changes you identify at one time. You don’t need that stress or pressure, and I’ll bet that while your intentions are good, you don’t have time to take action on everything at once. Instead, skip the overwhelmed and just take it one expense at a time.
If at any time you’re tempted to abandon the quest to reduce your spending and trim your budget, just think about how important true financial freedom is to you.
Ask yourself, “What would you be able to do with an extra $2,000 every month?” Would you be able to pay off debt? Reinvest in your business? Hire a housekeeper, gardener, pool guy, a virtual assistant, or a personal assistant? Purchase new software? Redo your website? Take a vacation? Go on an adventure with your family? Buy new furniture? Help your kids pay for college? Work less?
The possibilities are endless, the effort is completely worth it, and you can totally do this.