I have a confession to make: I am a chronic overachiever. And no that’s not a humble brag. It can actually be a real problem. You see, I’m the kind of person who is prone to wanting to work harder, do more, and it’s just never enough.
There is always something else that just has to be done because I’m addicted to growth. Even if you’re making good money in your business, it can still feel like you MUST grow and grow and grow. Anything else is just not good enough and after all, there’s always work to be done. Sound familiar?
It’s the kind of thing I’d tell my psychiatrist about and he’d smile his sweet, Mr. Rogers, knowing smile and say “that’s bipolar disorder, nothing is fast enough”. And he’d be right. But I’m working on it.
I’ve been researching investing in real estate for the ongoing rental income because I’m a personal finance nerd in addition to a marketing nerd. It’s largely a retirement strategy for the future but it has forced me to look at the numbers and see how much rental income I’d need to replace my income, and how many properties I’d need to generate that. It was way fewer than I thought.
This got me thinking, how much money do I NEED to make?
What is enough? And by enough I don’t mean enough to scrape by, I mean how much is enough to live the lifestyle I want to have as a result of running my business? I didn’t start a business to just work 24/7 and have no freedom, and I have a feeling that you didn’t either. But that’s what the “hustle, hustle, hustle” entrepreneur culture promotes.
Do you know what that monthly and yearly number is for you? I’m talking about freedom number, the number that sustains your lifestyle and everything on top is gravy.
Calculating this number pushes you to think about what you really want in life. Do you really want an expensive car or are you thinking you’d want that because it’s what you’re “supposed” to want? There is nothing wrong with wanting that, but do you actually want that or is it that society (and advertising) has taught you that it’s something that wealthy people have and without it, you’re not wealthy?
What you care about and value drives your spending choices. For example, I am very happy with my Ikea furniture because I don’t care about what it’s made out of. It does the job and I like it. Some people love hand crafted wood furniture, and more power to them. That’s just not something that matters to me so I spend less on that and more on things I do care about like travel, and burritos.
Your business can support whatever vision you have for your life, but you have to figure out what you want to know how much money you need to make to give you that life.
So, what do you want?
I know that’s a big question. I’ll share mine first.
I’d much prefer to spend my money on enjoying awesome (that doesn’t mean expensive, after all tacos are not expensive!) food and craft beer with my husband than spend my money on clothing or stuff in general. I’m more of a minimalist and that personal preference informs how I budget my money. When I first moved to San Diego, my husband and I didn’t buy a car to see if we could do without it one and I actually really love it. I love how much I get to be outside and how much I walk, so why would I spend money on taking that away from myself?
Aside from the expenses I care about, I care about my time. I want to travel more, both within road trip distance and across oceans. And I spend a shamefully minuscule amount of time at the beach when you consider the fact that I live 15 minutes away from some of the most gorgeous beaches in San Diego.
Don’t get me wrong, I love setting exciting revenue goals, but I want to know when I’ve hit my necessary income number for the month/quarter/year so that the rest comes from me WANTING to work instead of NEEDING to. That leaves me with no excuse to say silly shit like “I just need to do this one thing before I can go out” when I really don’t need to do it.
If you’re anything like me, you’re always looking to the next challenge and sometimes that means not really taking stock of what you’ve accomplished. Having both a big goal for yourself and knowing what your must-earn number is, allows you to recognize what is enough and what is the gravy on top.
Setting big, exciting revenue goals for yourself is awesome and if it makes you happy and helps you hit your goals, do it! But, if it makes you overwork and not actually enjoy the things you want to be able to do thanks to your business, have a look at how much money you actually need to make. And I want to be abundantly clear what I mean by the term “need” because I don’t mean scraping by. How much money do you need to make in order to pay for the lifestyle you enjoy? That includes things like travel, hobbies, investing & saving, etc.
Once you have that awareness, you know when you really need to earn more and what it is a choice. I know that I get bored when I don’t work for long periods of time, so I won’t be doing that. But I also get bummed out when that’s all I do, so it’s a balance, like so many things in life.
I always have to remind myself that I have to reap what I sow. I can’t just keep sowing for the sake of it and not reap the rewards. Knowing what is enough feels powerful to me. I can always choose to work more, but I don’t have to.
What do you want to be able to reap? What lifestyle do you want your business to provide for you?
If you’re not sure how to figure out this number for yourself, look at your monthly expenses. This will form the baseline of what you need to make (after taxes) each month, but don’t forget the things that don’t occur on a monthly basis like vacations and investing for your retirement.
I find that most people kind of, sort of, know how much money they need to make, but they don’t have an actual concrete figure. That concrete figure tells you when you need to hustle and when you can relax. It allows you to see that you’ve hit the amount you need to earn for the year and opens up more opportunities to you.
For example, if you’ve hit that number in quarter 3, you’re free to choose how you spend quarter 4 and why you do it. That’s the beauty of being your own boss! If you choose to work, you know why you’re doing it and what that income is going to go toward. That puts you in control of both your time and your money.
I firmly believe that businesses should provide freedom for business owners like us but sometimes you have to seize that freedom to ensure you get it. Knowing your freedom number allows you to make the most of that freedom and the choices it provides. I guess Schoolhouse Rock was right. Knowledge is power!
I’d love to hear about what lifestyle you want your business to provide. Come share it in the Evolve Your Wedding Business Facebook Community!
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