How to Get Good at Money: Build the Skills You Need for Self-Employment

Self-employment has a variable income stream. This is intimidating for most, and that’s understandable. If managing your money with a steady paycheck is like standing on one foot, then self-employment is standing on one foot on the back of a galloping horse. By no means is that impossible… it’s just an order of magnitude more challenging. No matter where you are in your self-employment journey (including “not yet started”) it’s a great time to start getting “good” at money.

Step one in this process is to throw out reductive labels that describe your skill at money. If you think of yourself as “good” with money or “bad” at money, then you’re wildly oversimplifying the situation. Let’s throw out those labels and look at the situation afresh.

What “Bad at Money” Actually Means

Like most animals, we are hardwired to try and get our needs met. This extends not just to physical needs (food, shelter, etc.) but also to emotional needs like comfort, security, and joy. I have every faith that you, dear reader, have done your best to meet those needs. I say this knowing full well that you could be $100,000 in debt, or have $100,000 sitting in the bank. That has nothing to do with your ability to get your needs met. Your needs have been met, I know it because you are still here. Trust in yourself that you have done nothing wrong in getting your needs met.

I know your brain just screamed, “BUT…” Shut that voice up for a second and let this sink in: You are not wrong.

And, yes, we live in capitalism. Capitalism ascribes a certain value to the methods we use to get our needs met. If the value of our income is less than our needs, then we end up in debt. If the value of our income is more than our needs, then it’s relatively easy to save or get ourselves out of debt. Debt is not indicative of moral failing. It is capitalism ascribing an arbitrary value to your needs.

Needs are needs. It’s an oversimplification to say that reducing spending is the solution to debt. First off, increasing your income would also bring balance. But the only true path to reduced spending is alternative coping strategies. You’d have to get your needs met in a cheaper way. And cheaper doesn’t mean better. But I’m getting ahead of myself.

My point is that we need to throw out “good” and “bad.” Instead, let’s look at the possibilities that exist in your relationship to money. What do you not yet understand about money? What would you like to understand better about your internal reactions to money? There are rich veins of inquiry here! There are simple and complex skills that are worth learning! Instead of good or bad, let’s conceive of ourselves as curious money learners.

A Lesson in Money Management

Money management boils down to money in (income) and money out (expenses.) Sometimes needs can get met in income-generating activities. It’s far more common that income generation creates more needs. The needs themselves are non-negotiable and not usually static. When stressed, needs tend to be more expensive. And guess what, most people are stressed when they’re starting a business! This is the basic one-foot balancing act of money management. It still requires practice despite our cultural blindness to this skill set.

Here’s where it gets more complicated. When you start a business it’s common that your income goes down for a while or at the very least gets wiggly. Income scarcity or instability often causes an increase in needs. More needs, more expensive, all with less income! This is what I mean about balancing on horseback. You’re trying to balance when everything is moving. Like I said earlier, this is not impossible. We can break it down into two component skills: self-awareness and space.

Self-Awareness

As you’re going through your life start to notice your feelings and how those show up in behaviors and spending. Sometimes you can find a direct connection between a feeling and a behavior. For me, I know that when my feelings are hurt, I often turn towards sweet treats. Awareness helps me curb this impulse or steer towards healthier ways of soothing those feelings. These alternative coping mechanisms often improve income-earning or lower costs. When a sweet treat is the best option at hand, I can also choose how expensive it is. Is it coming from the fancy bakery, the grocery store bakery, or making up a box of brownie mix? Both these strategies help to reduce expenses while still getting my needs met. This level of self-awareness allows for greater stability in your expenses.

Sometimes a direct connection to a feeling isn’t obvious. It’s not uncommon to have a background feeling of scarcity that drives us towards overspending or under-spending. Capitalism loves to sell us the lie that there isn’t enough, but there is. There is abundance. You can combat the messages of scarcity by building yourself a practice of noticing abundance. This could be saying grace over a meal, or celebrating every dandelion you see that’s thriving despite the pavement surrounding it. I’ve found reinforcement of abundance from my Buy Nothing Group and by watching city birds hanging out and eating at their leisure. Where do you notice abundance?

Space

Exploring self-awareness is so much easier if you allow yourself some space and grace. For those not yet launched into business, you probably have a present day-job with a reasonably tolerable balance point. You might have some working money management strategies. Working to improve those now is a free investment in your new business. To up your challenge level a bit, you can practice living on less. The artificial stress of a rigorous savings plan gives you a safe space to experiment. You can get to know your stress points and how they show up in your life.

For those of us already on this galloping horse, we need to reduce the stress and income insecurity as much as possible. Remind yourself of your stress reduction and management tools. For example, I know that sweets soothe me, but I also know that meditation and regular exercise helps me manage stress. There are many tools, so remind yourself of what’s worked for you in the past.

Income insecurity might seem inescapable in self-employment. The key is to have confidence in your safety nets. Remind yourself of your safety nets. What savings are you drawing off of? What credit card is backing that up? Or which friend will give you a no-interest loan that can help you get some breathing room? Whatever worst-case scenario your brain comes up with, make a plan to prevent that from coming to pass. Then you don’t need to worry about that anymore. (I mean, you probably will still worry from time to time, but you can push it off and give yourself the space you need!)

From Surviving to Thriving

Your relationship to money does not need to be static. In fact, don’t let it be! Develop your balancing skills, and find a rooted connection to abundance. From this, you’ll find the room to learn how to skillfully manage your cash flow. You’ll learn so much that “good” or “bad” would never have allowed! Your learning could expand to the wide world of investing in which you make your money work for you. And so many other new horizons.

We will always have moments of falter in our feelings of enoughness. Self-awareness arms you with a valuable tool to intervene when things get out of kilter. Getting unstuck in your relationship to money opens up a world of possibility. You can move away from a mindset of “survival” because there’s a deeper truth. That you have so much infinite possibility at your fingertips. What are you waiting for?! Start on this path towards thriving!

Originally published at https://www.maggiekarshner.com on April 23, 2021.