Why money confidence matters

by Kate on February 8, 2010

What are your Febusave goals?

This month, I’m supporting ANZ’s Febusave and Be Money Confident campaigns which encourage women to take control of their saving and financial security.

For women who own and run a third of Australia’s small businesses – and many more involved with family business – financial security is tied to results: more profit means more cash available for savings and investments.

Of course, there are lots of motivations for owning a business, and profit isn’t everything, but the money part is really important.

Changing family structures and demographics mean that many more women have to provide for their own long term financial security; for those of us in business, we need to make more than just enough to pay today’s bills.

I come across lots of business owners who don’t make as much as they would like and a big part of the reason is lack of focus on financial outcomes. Yet we intuitively know profit is important, so how come it doesn’t get the attention it deserves?

ANZ’s research showed that most women aren’t comfortable discussing their long term financial goals and plans to achieve them. This is as much of a challenge in business (for women and men) as in personal finance.

Talking about business finance can sometimes feel confronting, especially if numbers aren’t your thing. Indeed, talking with my own accountant last week I saw how easy it is to sidestep discussions about real performance – which is ironic, given my last post on the importance of paying attention to the numbers.

We all know, of course, that there’s no substitute for review and planning to keep us on target towards our goals. Women especially know that conversations help us clarify what we think and nudge us to action; so talking intentionally about finance really can put more money on the bottom line.

But it’s not so easy to to do this when we lack confidence to sit down with a financial specialist …

So, how can we be money confident in business?

Confidence comes from knowledge: the more we know about our results and what drives them the more control we have. The key is to pay attention to – and be intentional about improving – our financial outcomes.

A simple way to introduce the practice of regular reviews and to build financial understanding is to make a date with your accountant.

Use the time to talk through your results, discuss plans and do some tax and superannuation planning. Just by talking, your financial knowledge will grow and your accountant will be able to give better advice because they understand your business more clearly.

At first it might seem hard, but over time the focus on financials will naturally produce stronger performance: more profit and more cash to secure your future.

Here are three reminders that I’m using to help me stay focused in my own business:

  • Profit is how I know my business works: it gives me freedom to do what I love in business – and in life.
  • My inner critic doesn’t stop me hearing the advice and insights of my advisers, and I take time to really consider their perspective.
  • Practice what I preach: accountability delivers results!

Enjoy the journey!

Join the conversation:

What will you do this month so your business can enable you to save more?

{ 1 comment… read it below or add one }

1 Janna Fikh February 26, 2010 at 2:12 pm

Great post and completely agree with and relate to your 3 reminders.

I also preach to my clients daily, in my profession as an accountant. I am a devil’s advocate and a board for clients latest brilliant ideas. As professionals, we often do forget to take our own advice or the advice of others specialising in the field we require. Our own affairs always seem to come in last (or right on the bell!).

Confidence truly does come from knowledge. If you don’t have the required knowledge – seek knowledge, and in effect assurance, from someone else. There are no silly questions when it comes to sorting out your finances. Those silly questions could save you from a mine field!

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