Long-Term Planning: Four GLARING Mistakes

My last few weeks were a whirlwind of activity on the client front. A few of my favorite people are going through an intense launch phase, and a couple others are starting mega-exciting projects. All this work inspired me to write about Long-term Planning. It sounds like a pretty boring subject, so to make it juicier, let's talk about

The GLARING mistakes you (might) make when planning Long-Term

1. You stick your plans in a forgotten drawer

We never do this! No! It's not like you made a really nice well thought-through plan, let's say it takes five A4 pages and... that's it.
Three months later you find it when you're cleaning your desk.
All the planning workshops and sessions in the world are powerless against this strategy.

2. You confuse Goal-setting with Long-term Planning

Goal-setting: I want to quit my day job, so I'd sell an online class making $50K. (For the advanced goal-setters - imagine sign-up emails in your Inbox, rave reviews,  thankful notes from people you’ve guided through an incredible transformation)

Long-term planning:  I’m going to do research (2 weeks), then to pilot my class (4 weeks), then collect feedback (2 weeks), then decide on tweaks (1 week), then write the class (1 week? No, that’s way too optimistic. 3 weeks, I know myself, I’ll agonize over the smallest details). THEN, I'm going to market and launch it (4 weeks), then open the cart.
Where does this timeline brings us? Let’s do some quick math:
2+4+2+1+3+4= 16 weeks, a.k.a about 4 months.
Great. Now let’s think pricing, conversion rates, etc...

Many people tend to think long-term planning is the former. Goals-setting is essential, you won’t get anywhere without a clear goal. But it’s not enough. Long-term planning is the next step -
the not-too-detailed (that’s important!) roadmap to the goal you’ve set.

The key differences:
A Goal describes a finished outcome that relates to a specific point in time. It may even be a dream come true. We often set goals guided by our deepest emotions and desires - seeking independence, influence, connection. 

A Long-term Plan is first and foremost a sequence of events we need to happen to get to the goal. First we do A, then we do B, and these will lead us to C.
Each event has an approximate duration, and someone who’s responsible to make it happen - even if we don’t know at the beginning who that person will be. For example - if you plan to design a webpage 2 months from today, you know you’d need a web designer, even you don’t have a specific name in mind yet.

Here is another way to look at it, if the words “sequence” or “logical chain” make you squirm: 
A plan is a STORY.
A Narrative, where something happens and it leads to something else. The Ring of Sauron has to be destroyed (the Goal), so Frodo takes it upon himself to throw it into Mount Doom. The heroes plan the path: to cross the Misty Mountains, through the Redhorn Pass, across the flank of Caradhras. Elrond and Gandalf form a Fellowship of the Ring to help the hobbit overcome the dangers of the journey.

A note: the Visionary is usually very good at setting goals because it requires creating a picture (a vision!). Planning, on the other hand, requires linear thinking and focus. This is why Mark Zuckerberg needs Sheryl Sandberg so badly. She’s his COO, the person that translates a grand vision into a sequence of tasks/problems/events.

 3. You don’t plan the money ins and outs

If you have planned how much do you aspire to make, you’re already ahead of the majority. However, have you planned how much you’ll need to spend? Where would the money go?

How much would you invest in the Facebook ads? How many VA/designer/tech hours would your plans require? If you sell a physical product, did you plan material costs?

In addition to the obvious “let’s see what my budget allows” insight, long-term money plans have a curious side-effect  -  motivating us to act. When you see the investments you need to make, your plans feel more tangible and real. And most of us won’t get off our collective butt, unless real and tangible things need our real and tangible action.

The spending plan doesn’t have to be exact or even too detailed - it’s enough to say “$5000 for coaching, $1000 for software, $10000 for taxes”.

4. You stop at long-term, never planning the middle-term

You might have heard me say it before - Visionaries are great long-term planners and amazing immediate responders. But they often lack the ability to do the in-between.
Without middle-term planning  - the breaking down of big tasks into smaller ones, there’s no way to know what you need to do today, never mind in the next hour.

This point may actually be the hardest to implement - breaking down big chunks into smaller tasks, executing the small tasks, weaving them into daily routines. This requires discipline, focus, motivation, and, surprisingly, a healthy dose of creativity.
If this last sentence resonates - know you’re not alone.
There are methods and systems to make it easier (in other words, to make it actually, you know, happen). But that’s a story for another time.

Reviewing MONEY GOALS and on-going financials: the UN-painful way

We have already established that engaging with your financials on a regular basis tends to reduce anxiety, and comes with other perks like fueling your motivation and the super-power to correct course and really achieve the goals you set for yourself. 
That's great.
But there's a reason over 60% of Americans don't even have a budget, forget reviewing it regularly or otherwise. Financials have a bad rep of being daunting, complicated, and depressing. And sure, they can be. But avoiding the numbers won't make them any more pleasant to look at.
What will?

Here is my theory: reviewing both your big-picture money goals and your everyday cash flow should be EASY and ENGAGING. It's possible. Truly. 
How do we make it so? Two key components:

Component 1: Use a good system (making it EASY) 
It could be a favorite app (I listed my picks here) combined with a decadent pepper-mint caramel latter with whipped cream and cinnamon during a weekly review. Or a chart on a huge piece of clear plexi-glass on your wall, where you draw circles and arrows with dry-erase markers. The specifics matter far less than your level of comfort with the interface. Here are some guidelines to choosing a solid budgeting solution.


Component 2: Numbers are stories (making it ENGAGING)
Here is where things get really interesting, especially if you have an aversion to numbers in general and to spreadsheets in particular. Instead of looking at your budget and seeing dry arithmetic, let's frame the numbers into a narrative, where you are the hero.
Sounds weird?

Here's an example: Gordon planned to make $3500 from his face-painting e-class sales. He made just $2370, and now is understandably disappointed. If Gordon takes the conventional approach, that's it. Dry number and disappointment. Plus some conscious or subconscious resentment toward his spreadsheet.
If, however, Gordon sees himself as a protagonist of the story, he just hit a road-block (a plot twist, if you will) that he, the hero, needs to overcome.

Now Gordon examines previous chapters: did he build a big enough audience? Was his copy on-point? Maybe the tech he used was confusing? Or maybe his content was too broad and shallow?
He creates a plot line that includes changing the platform/firing his unreliable VA/tweaking his curriculum,  that can lead him to the win.

See what happened here? Gordon sees his sales number as a piece of a narrative, a figure that tells a story. This story would inspire action and become a part of a larger plot. 

Another example: Gerda was aiming for to sell 430 units of her lavender-bacon beard soaps. (Yes, lavender-bacon is gross. But memorable). She sold 621 pieces. Apparently, bacon sells everything, including lavender beard soaps.
In her story, the sales "dry number" just indicated a win for the heroine. A conclusion to a plot with obstacles she overcame and money she spent along the way - these numbers are also pieces of the narrative. 
A victory to celebrate, to learn from, to lovingly store in a feel-good compartment of her business and her psyche. 
 

When you process numbers as stories, you ENGAGE.
Mentally and emotionally.
When a process is engaging, you're way more likely to repeat it,
creating a habit of controlling your money flow.

Want a step-by-step guidance to this process for your business or your household?
Check out my MONEY GOALS 3-6 service.
See you next post!

Steps to deal with MONEY-RELATED anxiety

On your first postpartum check-up, the OBGYN hands you a list of questions.
 - Are you sleeping OK when the baby sleeps?
 - Are you worried about financial hardship now that you have a new baby?
 - Do you get support from your partner?
The list goes on - they are screening you for signs of postpartum depression.

At that blissful time all I knew about depression was purely theoretical. So my first thought was “Well, if you have an un-supportive partner, an unstable money situation, if you’re sleep deprived -  you’re going to feel stressed even if your postpartum mind, body, and hormones are on their best behavior.”

I know better these days.
But I still believe that money worries cause huge amounts of anxiety. Tremendous.
I’m not going to cite any statistics (have you heard that 87.4% of all cited statistics were invented on the spot?), but you have probably noticed that money worries impact our relationships, our performance on the job, our health - everything.

So how do we cope?

By taking an ACTIVE role in managing our money.

Let me unpack this somewhat nebulous phrase into a 4-step process: 
Step 1: Set your financial goals

Step 2: Outline your top priorities (no more than a handful)

Step 3: Create a system to track your progress towards these goals. System means you have
             - the right tools,
             - a process you can easily follow
              - and ideally, built-in accountability.

Step 4: Track progress, tweak, repeat.

If you need a hand to set-up this process your business (or your household), 
check out my MONEY GOALS 3-6 service.
In 2 one-on-one sessions we'll set realistic financial goals for the next 3-6 months, after helping you analyze your income streams and expenses. 
The launch price - 50% off - end on Feb-3, so be sure to sign up by Friday.

What you get:

• Clear money goals for the next 3 to 6 month - hard numbers in dollars. Why just 3-6 months, you ask? These goals tend to be more tangible, and therefore easier to realize.
   
• A system to track your income streams and expenses - taking the guesswork out of how much money go in and out every month. 
  Remember? Tools, process, foundation for accountability. All in there.
   
• A solid idea about your most profitable products or services - and a clear understanding where it pays to invest your energy.
   
• As a bonus - my clients report a sharp drop in money-related anxiety. I'm no therapist, but it stands to reason that feeling in control makes you worry less, especially when it comes to the lifeblood of your business. 

Check it out here: MONEY GOALS 3-6

That's it for today. Next post is about reviewing money goals, why bother, what to avoid, and how to make it painless.

What even the best Budgeting apps CANNOT do for you? (And how to deal with it)

Welcome to the Whys, Hows, and Please-Don'ts of Budgeting and Planning part III. This time  - let's look at what all these wonderful budgeting apps from  last post  CANNOT provide.

WHAT even the best BUDGETING APPS WON'T DO FOR YOU? 

The short answer - no app can plan and set your large-scale money goals  for  you. 

But, wait, Marina, you said Mint, YNAB,etc., allow me to save for specific purposes!
Yes, they do. You want to save for a trip to Yosemite? The app will help. You want to buy a new laptop? Sure, the apps will show you how to budget for it.

But what about planning your income goals?
Realistic and achievable ones, I mean.
Do you have a $$$ number you plan to make in the next 3-6 months? Not just "as much as I can", but a concrete dollar figure to guide your efforts? As in "I plan to make $XXXX by serving clients one-one-one, and $XXXXX from selling group services, and $YYXX from e-course sales"?

The apps are wonderful. Really. Mint.com brought so much order and control into my life. But they are merely tools to facilitate a process - planning your income, based on your needs, hard data, and informed assumptions.
You're better off setting goals and planning your income in a scrappy notebook, than diligently using the sleekest app to it's max potential.

This process is what really brings in the money. And perhaps, more importantly, a sense of controlling the fate of your business. 

How do you go about that? 
How do know which goals are realistic? How do you know you're not setting yourself up for failure? 
 - You track
 - You analyze
 - You plan your steps, using numbers.


Maybe you have already tried, got discouraged and never finished the goal-setting. Maybe you see yourself more of an idea-generator rather than a numbers person. maybe dealing with money makes you uncomfortable. Maybe you lack a good system (process+tools) to support your goal-setting and planning.


If this is you, I have an offer: a short and sweet MONEY GOALS 3-6 service.
Two one-on-one sessions, with homework in-between. We'll set realistic financial goals for the next 3-6 months, after helping you analyze your income streams and expenses. 

You can even get it at launch price, 50% off, if you sign up before Feb-3.
 

Some of the benefits: 

• Clear money goals for the next 3 to 6 month - hard numbers in dollars.
   
• A system to track your income streams and expenses - Taking the guesswork out of how much money is left at the end of the month.
   
• A solid idea about your most profitable products or services - and a clear understanding where it pays to invest your energy
   
• As a bonus - my clients report a sharp drop in money-related anxiety. I'm no therapist, but it stands to reason that feeling in control makes you worry less, especially when it comes to the lifeblood of your business. 

Check it out here: MONEY GOALS 3-6

That's it for today. Go do amazing things!
P.S. Next post - about Money-related anxiety and ways to deal with it.

As promised - Budgeting Latest and Greatest

This is part II of my Whys, Hows, and Please-Don'ts of Budgeting and Planning for 2017 series. As promised in  my last post:

FAVORITE BUDGETING APPS and SOLUTIONS

All the apps below got high marks on most of the criteria I outlined in part I:

1. Designed for tracking and planning - most apps below have planning features, some better than others.
 
2. Clean, beautiful interface - some, I dare say, are even fun and engaging. Then again, I’m an analytics nerd, so my idea of fun may sound weird. Please don’t hold it against me.
 
3. Easy to navigate and find information
 
4. Easy to make changes
 
5. Great for specific purposes - these apps are not, strictly speaking, "budgeting". But I found them useful for their stated purposes.

All tools are web-based and sync across your computer, tablet, and phone.

1. Mint

This is probably the most established personal finance tool out there. Mint allows you to track expenses by category and to set budgeting goals for every category in your spending. Graphic interface, easy bill-pay feature.
It has Alerts! This is especially great for those of us who have trouble remembering to pay bills. The setup is very easy and intuitive.

Caveat - depending on your setup, Mint might send so many alerts and notifications they naturally get ignored.
Goal-setting feature is OK, but I prefer YNAB’s interface for that - to me, it feels more intuitive.

Cost: Mint is free to use, they make their money (mostly) from ads. However - these ads are not necessarily a bad thing - Mint tries to customize the offers to your spending habits, so the stuff Mints suggest could be actually useful.

2. YNAB (You Need A Budget)

Awesome, wonderful, and great!

The only reason I’m not on YNAB is because we started with Mint, and transferring everything will be a hassle. Talk about being first on the market.

I love YNAB's philosophy, their 4 rules (https://www.youneedabudget.com/method/). My favorite feature - the age of money. YNAB allows you to see how long a specific sum is sitting in your account. Why is it great? Because it helps you pay this month bills with money from last month or older. This feature allows you to create a buffer, and avoid the “I’m flush! Let’s spend!” trap.
The interface is sleek and flexible, in the best sense of the word.

Cost: YNAB is not free, but I’d say it’s more than pays for the $5 a month.

3. MVELOPES

This solution uses a classic idea of dividing your expenses into envelopes** ahead of time: an envelope for groceries, an envelope for gas, an envelope for dining out, and so on. When the money in an envelope is out, that's it. The basic principle is very similar to Dave Ramsey’s system, with electronic envelopes instead of physical ones.

The apps, both iOS and Androids, have great design. The desktop version is a bit old school.

Speaking of design - I heard complaints that MVELOPES isn’t as sleek and intuitive as Mint and YNAB. I would agree. However! Some people do better when a bit more of a conscious effort is required. MVELOPES forces you to be more intentional and involved, precisely because the framework is more rigid than Mint or YNAB.
So if you know that about yourself - go with MVELOPES.

Cost: - free basic level, $9.95 for Premium (pro - they have a community forum. Con -  there are cheaper solutions that work better for most people). You can even get financial Coaching, starting from $59.95 per month.

**Note - if you a tactile person that functions better using physical objects - just go with real paper envelops. Here is the best explanation of the method, again.

4. APPS for SPECIFIC PURPOSES

Trim - a free app that cancels subscriptions you don’t really need! Trim will scan your accounts for subscriptions, and offer to cancel whichever ones you’d like. They’d do the dirty work of emailing the companies, and will even have a robot talk to Comcast for you!

Personal Capital:
Great for investing if you are a DIY/beginner investor OR a high-worth investor (starting $1M in assets) who want a financial adviser at a really great fee. 
Tracking is free, adviser fees depend on portfolio size.

Prosper Daily (used to be called BillGuard) - their philosophy says it takes a village to guard against fraud. This free app allows you to view your recent credit card transactions, and either approve them or mark them as suspicious. The kicker - this app will tell you if any other members flagged a similar transaction as suspicious.
Oh, and the interface is drop-dead gorgeous.

---

So there you have it. Now I’m really curious what are your favorite budgeting methods, what are the most annoying challenges. Write me! I might answer the your question on the blog!)

Next post - what the missing piece these apps DO NOT PROVIDE, and how to solve this part of your financial puzzle.

In the next few days, I’m going to talk about the missing pieces for business financial planning, about reducing anxiety when dealing with money, and about reviewing your financial goals for 2017.
Stay tuned!

Is there an IDEAL Budgeting app?

Around New Year's we all got inundated with articles about “best budgeting tools” on every possible platform. Some of these articles are great (this and this, for example) but it’s easy to get lost in the sea of information they present.

So I made this short series of posts to help you navigate the whys, the hows, and the please-don'ts of Budgeting and Planning for 2017. Below is the first one:

IS THERE an  IDEAL BUDGETING APP?

Almost 30 years ago someone I love wrote:

"The fact that a visit to a dentist can be not painful was stunning news!” 
She was a recent immigrant from a different... reality. A time and place where most people would only go to the dentist if the pain became can't-sleep-at-night unbearable. Going a couple weeks (or months) earlier would make the treatment less traumatic and maybe not as expensive. But in our collective mind a visit to the dentist felt so daunting and unpleasant, we'd postpone it as much as the pain threshold would allow.

The dentistry came a long way since.
But some things, like the subject of this post, retain similar characteristics when it comes to getting them done - people postpone as much as their pain threshold would allow.

I'm not going to preach why Budgeting is essential. You already know that.
Instead, let’s make it un-painful. Before we dig into "best apps and solutions", let's look which criteria to check when choosing a budgeting tool that'll work best for YOU.

1. Past. Present. Future?

Most budgeting apps focus on tracking rather than planning. Tracking is great and wonderful, it keeps you attached to reality and helps you navigate your spending.
But!
In my book, the whole point of tracking is to help you plan forward better. I can’t really change what I made or spent last week. I can only determine how much I’ll spend or make next week, or month, or quarter.
A good budgeting tool would allow me to PLAN easily.

2. Clean Interface

No one wants to stare at a wall of numbers. Best apps have great visuals to tell your money story. Besides, a beautiful engaging interface increases your chance of, well, engaging with it. The more you engage with your budgeting, the easier it is to develop a healthy habit of consistently managing your finances.

3. Easy to make changes

YNAB, one of my favorites, (more on it next post) calls it “Roll With The Punches”. You will change your budget, especially if you’re just starting Budgeting as a habit. Making changes shouldn't be a struggle, you shouldn't feel you're being punished. I can't help myself but to quote YNAB again, they are just so eloquent: "No guilt. No hand-wringing. It’s a halftime adjustment. A chess grandmaster adapting to an opponent’s silly mistake."

4. Easy to navigate and easy to find details

We all process information differently. Some people need all the info at a glance (well-designed spreadsheets are great for that) . For others, a good search function makes all the difference. Yet for others, the information must be structured in a way that makes sense. Don't know what's your own personal preference? This is what free trials are for. Make sure to choose a Budgeting tool you can navigate without a GPS.

5. Specific purposes (advanced)

Some apps help you invest better. Others focus on saving toward specific goals. Some will even help you get rid of all these subscriptions you aren’t using anymore! So before choosing a budgeting app, ask yourself, does your budgeting have a specific aspect you want to address?

Wait, no links to specific tools? No, that's in the next post.
That's is for today. 
Small portions.

In the next few days, I’m going to talk about best budgeting apps and solutions, about reducing anxiety when dealing with money, and about reviewing your financial goals for 2017.
Stay tuned!