It takes 21 days…
You’ve heard this, right? There’s an idea out there that it takes 21 repetitions to develop a new habit. Whether that’s a new exercise schedule or remembering to put the lid down, supposedly 21 times is the magic number to move that conscious action into a subconscious place where you do it automatically. To get the to the point where not doing it feels weird. Other people talk about this as three phases: the initial ‘honeymoon’ phase where you’re hyper aware of the activity, the ‘fight through’ phase where you’re not so enamored of things anymore and it feels like a grind, followed by the ‘second nature’ phase where you’ve fully moved into a habit.
I recently started meditating and it’s definitely work to make it a habit. The honeymoon phase lasted about a month – I was really into it, looked forward to it every evening, and noticed the difference when I didn’t take the time to practice it.
Then the ‘fight through’ came on. I had done the routine enough that I felt it was getting repetitious. I started thinking I could just do part of it and get the same results. I found myself making excuses and ducking out of my commitment to myself. I was hiding from my meditation routine. When I realized what I was doing, that I had made this wonderful new practice into a ‘should’ I had a hard time getting excited about it.
A lot of people feel exactly this way about their financial management. They have a tough time doing the daily entries and review necessary to really understand your money situation. They’re not excited about it and they start looking for ways to shirk those duties as a business owner. It doesn’t mean they don’t have financial habits. They simply have bad financial habits. That may look like a box full of receipts dumped on their accountant’s desk every April or it may be spending hours trying to reconcile six months worth of statements in one sitting. Either way, it’s not very fun.
It’s easy to understand. Bookkeeping is not particularly exciting. Entering transactions and reconciling bank accounts is fairly dull work, especially when compared to more creative and interesting activities like working with your clients or developing a new program. Finance is just not sexy for most people. But developing good financial habits can lead to something really cool…feeling totally on top of your books.
Forming good habits
To really get to a place where you completely understand how money is moving in and out of your business, you need to take care of your finances. That means doing the boring work of making sure all of your income and expenses are tracked properly and that everything balances out. It means carving out time every week to make sure your invoices are sent, you pay your bills, and your taxes are taken care of. It’s kind of like owning a home: if you ignore the leak in your roof or don’t change the batteries in your smoke alarm, you can manage in the short run but ultimately you’re in trouble. Your business finances are the same way. You need to do stay on top of them day in and day out.
So what do good financial habits look like? It’s pretty simple. Do your work, bill your client, get paid, pay your expenses, and track your numbers. You’re probably doing the first pieces because you want your business to be successful and you want to get paid. The last step – knowing your finances inside and out – is what helps you make smart, strategic decisions.
Set yourself a schedule for your financial work and stick to it until it becomes habitual. Enjoy the honeymoon phase where you realize there’s great information to be found in managing your money. Push yourself through the ‘fight through’ stage. It may take you 21 days or 21 weeks, but keep at it until it becomes second nature to take care of your books regularly.
Reap the rewards
Here’s what you get when you focus your attention on your books and develop good financial habits. You get financial clarity. You won’t wonder where you stand and whether you can buy that new laptop because you will know if you can afford it or not. Wouldn’t it feel great to have your numbers down, your cash flow humming, and get the most out of your business? Instead of groaning when you think of your accounting, what if you were excited because you felt completely in control? This is where the financial habit really makes a difference.
I pushed through the hard phase with my meditation and it’s close to becoming a daily ritual. I still have work to do, but I’m committed to getting to a place where I do it habitually because I know it’s good for me. Financial clarity is good for you, too, so develop your schedule and make yourself stick to it until it becomes second nature. You’ll be happy you did and your business will thrive because of it!
Wondering What To Do And When?
For help learning exactly what you should be doing with your books on a daily, weekly, monthly and yearly basis, check out this handy Bookkeeping Checklist. It’s a great way to stay on track with your accounting tasks and develop your financial habits!
As always, I’d love to hear from you. Drop a comment below or email firstname.lastname@example.org.