Episode 93: How to Give Every Dollar a Job After Your Best Month Yet

Welcome to the Creative Minds Smart Money podcast, where we turn financial confusion into creative confidence. I’m Samantha Eck, bookkeeper and fractional CFO for creative entrepreneurs. Each week, I’m sharing my financial expertise and actionable strategies to help you build a thriving creative business. Plus, you’ll hear from industry experts who bring fresh perspectives on growing your business beyond the numbers. Because building a successful creative business starts with strong financial foundations.

Your next chapter starts now.

As a creative, I’m sure we’ve all had it. We’ve had a month where we look at our bank account and the money in our bank account looks phenomenal. We had a really profitable month last month. Everything looked fantastic. And we’re so excited to see what we can do this month with all the money that we made from last month. But the problem then becomes — what do we actually do with the money that we have when we have a really profitable month?

What can we actually put into place? What things can we actually bring to fruition? And that’s what today’s episode is all about and what we’re going to dive into and chat about.

When creatives have a very profitable month, they often think of it as some sort of fluke. Like it is a one-time thing — they had a great month last month, it’s not going to happen again. And I’ve seen this with my clients. I’ve also seen it with myself. I’ve had a great, great month and I’m like, I don’t know if I’m going to be able to make that again next month. And then the next month, we have that repeat.

This especially comes into play when you think about creatives like website designers or graphic designers, people who have a hundred different clients that they have to deal with in a month or 20 different clients that they have to deal with in a month, and maybe next month they might not have the same amount of clients. So they often think of it as some kind of fluke, like it’s not going to happen. But if you’re someone who maybe has retainer clients, you know it’s not a fluke because if you have them on retainer, you are going to have it come up next month.

But a lot of the time they think, okay, well I can’t really give myself permission to spend a lot of the money that I have coming into the bank account because I might not have as profitable a month next month, or I might not be able to make the same amount this month. So I can’t really do anything with that money because I don’t think that I’m going to be able to replicate that kind of success that I had the previous month.

So there’s that very emotional side of things where when you have a very profitable month, you have to really think about what’s going on and really think about how you got to that point in order to be able to get past that emotional barrier where you’re like, I don’t think I’m going to have another successful month, I don’t think I’m going to have another great profitable month. So I can’t really do anything with the money that I have gained.

Now, when money shows up in your bank, usually the first thing that I see most creatives doing is either paying themselves and taking the money right out of the account, or potentially if they have debt, paying down debt immediately, or potentially if they have a project that they’ve had in mind, immediately spending the money.

But there is a problem with that knee-jerk reaction, right? Because if your immediate instinct is just to take the money that you’ve made and immediately spend it or immediately put it elsewhere, you could be putting yourself at risk. Because if you especially don’t know what’s going on in other areas of your business — and trust me, having a really profitable month is fantastic and it’s a great opportunity to spend money — the problem is you have to think about it strategically and not just immediately spend down all of the money that you just made.

So you want to think about yourself, the projects that you have, the goals that you have in mind, everything like that. Because if your immediate knee-jerk reaction when you have a profitable month is to, let’s just say, pay down a bunch of debt and then go ahead and put another service provider on your credit card so that you can build that debt back up again, then you’re just creating a loop for yourself. You’re consistently going to have to be paying down that debt.

So there’s a whole bunch of different factors that go into — when we have a profitable month, what do we really need to think about and what do we need to do with that money? And there’s a bajillion things we could do with that, obviously. But like I said, you actually want to think about your goals and everything that comes with more money to really think about what you can do with that money. And then yes, if the option there is, okay, I do need to pay down debt, then obviously that’s a key priority for you. That should be something you take seriously. But the thing that I’m trying to get at is not having that knee-jerk reaction and immediately going to spend that money. You need to take that time to actually analyze and think about your goals for your business.

My top goal is to pay down debt — okay, I’m going to pay down the debt. Or my top goal is to get my website redone — I’m going to put half of it to debt and half of it towards my website. Whatever that goal is that you have in mind, that’s what you really want to think about when you have a profitable month instead of just kind of reacting and spending your money in places that might not be where you want to be spending it.

So yes, we want to give our money a job. And I talk about this a lot — I think it was when we talked about YNAB — every dollar should have a job. So if you’ve already allocated most of your funds, you know your cash flow, you know everything that’s going on, maybe you regularly bring in $10,000 in net profit every month, and this month you brought in $15,000, so you have an extra $5,000. There are a couple of buckets you want to be thinking of — okay, what do I do with this money?

And not necessarily in a Profit First sense, but you do want to be thinking a little bit about yourself because of course you had a really successful month, so you do want to think about giving yourself a little bit of something. On a personal standpoint, when I have a great month and I have a new client or something like that, I always think about giving myself a little bit of a reward. I would take some of that money, put it towards myself and say, okay, what is something that I’ve been wanting or something I could enjoy? Maybe it’s a new dress, maybe it’s a video game, maybe it’s something else like that — but it’s something that brings me joy. And maybe more of that money goes towards our trip to Korea in November, or it goes towards something else.

But the purpose of that is to determine what buckets we want to put that in. So maybe 10% goes towards your owner’s pay, maybe 20% goes towards taxes, and 20% towards reinvestment. And then that other 50%, you can kind of determine what you want to do with it when you actually have it in your account. But you do always have to think about your taxes. You always want to think about your owner’s pay. You want to think about the reinvestment into your business. And again, that’s where we’re looking at our goals and saying, okay, I have this goal, this goal, and this goal.

I really want to get my website done this month — I’m going to put 75% towards my goal, 20% aside for taxes, and the other 10% I can take for owner’s pay. Whatever it is that will make you feel the right way about bringing in that profitable month and being able to reach those goals that you’ve been setting up for yourself. Because I think a lot of the time we see money on paper and we’re immediately like, okay, I’m going to spend it. And I’ve had tons of clients who’ve done that. They brought in a lot of great money and they don’t set aside for taxes, or they don’t give themselves a percentage of that for pay, and immediately that goes to something else that maybe is not as important or maybe is not even on their goals. And then we get further and further from the goals they have for the year.

Like one of my client’s goals was to really get her website set up this year. So every time we have extra funds, our question is, okay, do we want to put this towards the website? Do we want to put it towards you? What do we want to do with this money that we have coming into the bank account that is additional funds in addition to what we already have coming in?

Now, when it comes to reinvesting, we really want to reinvest in a very smart way. We don’t just want to spend our money on a $25 course that we’ve seen online. A lot of what this comes down to is, again, what your goals are for your business with your reinvestment. Maybe it’s a website, maybe it’s something like that. So a lot of the time what I do is I have an ideas bucket in my project management software where I put an idea that I have. Maybe it is a new course, maybe it is a new software, maybe it’s something like that. And I will put it in there and say, okay, this is why I want this, this is the priority, et cetera, et cetera.

And then whenever I’m ready to reinvest in my business — maybe I have some extra money, maybe I have something like that — I’ll go there and say, okay, this is where I want to reinvest my money. Or I want to reinvest 25% of my funds — here are all the options I have to reinvest, and whatever my top priority is, that’s what I put my money towards. So again, if it’s that website, for example, that’s what you put your money towards.

The thing that we want to ask ourselves before spending is: is this going to help my business, or is this going to make me regret it in three to six months? And you really want to be thinking about who you are now versus who you’re going to be in three to six months. We’ve had a lot of that conversation lately where we’re talking about payment plans, and a lot of people will get into a payment plan when they’re having a phenomenally good month. And then six months down the line, that income isn’t there anymore. So now they’ve put themselves in a little bit of deeper water.

So again, thinking about that — maybe you have all the funds when you have that extra profitable month, and those funds cover the entire project or whatever you were thinking of working on. Fantastic, then go for it. But if you’re getting into any sort of payment plan or anything like that, you also want to think ahead and ask yourself: will this actually help me, or will it hurt me? Because if it’s going to hurt you, you probably don’t want to be reinvesting in that at this stage, unless you’re confident that six months down the road you are going to have the income to cover it.

So the last thing I want to talk about is building a system. When we get money in, really thinking about what we actually want to do with it. Because one good month doesn’t change a business, but when you have a habit around actually looking at what a good month has brought in and what things you can do with the money after that — that’s when it really starts to change your business.

Because maybe you realize that next month is not going to be as great. Maybe you’re like, okay, next month we’re actually losing two clients. So this $2,000 could actually help to cover that loss next month and cover all of our operating expenses. So I’m actually going to bank it in the business so that next month I’m covered, I’m not stressed, I’m not worried about it. Because when you stop reacting to money and you start having some sort of plan around it — okay, 10% is going towards me, 20% is going towards taxes, 50% is going towards a reinvestment, the other 20% I can kind of determine what I want to do with when I actually have it in my account — that starts to change the way that you look at your money.

So you’re looking at it and saying, okay, I have $5,000 extra dollars this month. What do I want to do with it? I already have taxes set aside. I’ve already paid myself. Maybe I want to give myself a little bit of a bonus, and I’ve been meaning to get my website done — I’m going to go ahead and invest in that. Whatever it is, because now you know your goals, you have your ideas, you have all the buckets you need set up to actually put towards a profitable month.

Now, instead of reacting and saying, oh my gosh, I had a profitable month, I’m going to pay off all that debt — and then, oh crap, I needed that money because next month I have six bills coming up that I don’t think I’m going to be able to cover otherwise. When you actually have a direction, you actually start directing it. And this is where a budget comes into play too, and having an idea of what your cash flow is.

There’s just a peace, right? Because immediately that money comes in and you already understand what you’re going to do with it because you have your goals in mind. You understand what you need to do as a business owner in order to succeed. There’s just a different thing that will come up for you. You’re going to be at peace with yourself. It’s just going to change the way that everything looks for you.

So I know that sounds like a lot of gibberish maybe, but when we think of a profitable month, we really want to be intentional with the money that is coming into our bank account. And we want to think about not just our current selves, but our future selves and the future months that we have coming up. Because there are many times where you are a website designer, maybe you’re booked out for February, but you’re not booked out for March. And you want to be prepared knowing that you have that extra money there that might cover expenses next month — which is going to give you relief when you’re like, okay, I have that money, I’m not going to touch it because I need it for expenses next month — instead of immediately reacting and saying, oh my gosh, I got an extra $5,000, I’m going to spend it right away, and next month being in deeper water and ending up with some sort of regret.

So I really want you to take the time whenever you do have a profitable month and instead of just considering it as one good month, look at the bigger, grander picture of your finances and say, okay, yes, I had a profitable month. But will I have an equally profitable month next month, or am I going to have less income? Considering every factor is just going to change the way that you think about your money and change the way that you think about your business.

If you guys love this episode, please make sure to subscribe, leave a comment, leave a review, whatever it is — share it on social media so that more people can listen to the podcast. I honestly appreciate you listening so much. If you have any questions, comments, concerns, please feel free to contact me — reach out via Instagram, Threads, whatever it is, I’m totally happy to speak with you. As always, my friends, I do wish you the best week ever. We’ll chat next week for sure. Farewell, fellow travelers.