Dear Reboot: Money Issues
How our beliefs and habits around money show up in our personal finances and at work.
In our Dear Reboot series, Reboot coaches aim to provide guidance on common leadership dilemmas. If you’d like to submit a question to be considered for our Dear Reboot column, email us here.
Dear Reboot,
I have money issues. My company is almost running out of money — again. I look at the books only when I have to — and even then, I am not sure what I’m looking at. What do I need to know to be an effective leader of my company’s finances? How do I set things up in a way that makes sense? I’d like to be better at this.
Thanks!
Jesse
Dear Jesse,
Thank you for bringing up this incredibly important topic. Money — and our beliefs about money — are connected to our sense of self-worth, what we learned about money from our family (and lineage), what we believe to be true about how the universe works, how we manage our energy, and can also be connected to deep feelings of shame (failure and humiliation). All of our beliefs and habits around money show up in our personal finances and at work. Exploring this issue becomes mission-critical for ensuring your company’s bottom line and its enduring success.
Money stuff gets in the way for the best of us, so know that you’re in good company. What’s important is that we take time for reflection to learn about how it got to be so, and what we’d like as an alternative. Take, for example, our friend Derek Flanzraich, former CEO of Greatist, who told Jerry in our very first Reboot Podcast conversation:
“I haven’t really cared about making money for a really long time, at all. And, in fact, I thought caring about money in fact was bad. …Where it all stems from was my personal relationship with money — my family experience, and my experience growing up. It has influenced me in terms of how I look at money in my business.”
A handful of months prior to his realization, he looked at the bank balances and realized the company was running out of money. This is when he asked himself, “How did this happen?”
Money is closely tied to worth. If you think you are not getting paid enough at work, you feel undervalued, yes? Likewise, if our self-worth is lacking (or tied to money in some way) and we have (what we perceive to be) low income, that scenario can feel really bad emotionally. But is that true? Is your worth tied to your income level? Of course not. How we uncouple that sense of self-worth from income is a great internal excavation. Enter radical self-inquiry and an opportunity to do some inner work to locate the source of your inner locus of success and sense of self-worth.
An example of how money can be tied to self-worth, and how that shows up in the running of the finances via the decisions made in the company, can be heard in this exchange by Mixergy’s Andrew Warner and former Cheezburger CEO Ben Huh:
Andrew: What made you say that you sucked?
Ben: I lost all of this money. I used up all of this money from these investors, and we were spinning our wheels.
Andrew: How did you lose the money? Where did it go?
Ben: That’s a really good question. You know on paper it went to salary. That’s what most technology companies do. We really used up the money because I didn’t make the right decisions fast enough. And a lot of the money went away because we had some bad luck.
Pausing to reflect on your own money issues presents a good time to ask yourself: Who are you? Meaning, what are you working with — what beliefs and behaviors got you here, and are operating in your current experience? What would you like to be experiencing?
Without exploring our money beliefs, we could end up living out a decision we made early on in our life that we’ll always have nice things and we’ll always have enough money to turn the heat on in the winter. In turn, we could end up working three jobs and missing out on the ticking minutes of our life (and spending time with family) in the process, as Dan Harris and Jerry Colonna touch on briefly in this talk from the Rubin Museum from July 2019.
On that note, let’s look at your relationship to money. It may help to spend some time journaling on the following questions about what you’ve learned to date about money.
- What was the role of money in your childhood?
- What are your earliest memories of money?
- What messages about money did you receive from your mother, your father, grandparents, and other family members?
- What were the family stories about money (i.e. someone losing a business, marrying rich, squirreling away money in a sugar bowl)? How were these stories told?
- Describe a childhood experience about money that stuck with you and how it may have affected your current beliefs and behavior.
- If you worried about money as a child, what form did your worry take?
- When did you first become aware that your family was richer or poorer than others? What feelings came with this awareness?
- Was scarcity or abundance the tone of your household?
- Was there a rich or poor relative or branch of the family?
- How did money come to you as a child?
- What was your first earning experience?
- What was your mood about money in your teenage years?
- What vows about money did you make when growing up (i.e. “I’ll never go hungry again!” or “We’ll always be able to have nice things”)? How are those vows alive in your life today?
- How have your beliefs about money hurt your life or caused you suffering?
- What is your mood about money currently?
- What themes do you notice? How do these show you in how you handle finances at your company?
The best practical tactical resource we send entrepreneurs to so they can learn to better understand their company’s financials is Managing By The Numbers: A Commonsense Guide To Understanding And Using Your Company’s Financials, by Chuck Kremer, Ron Rizzuto, and John Case. As an essential read, this book is for anyone interested in building a stronger business and will help you understand and know how to use the information in financial statements.
Here are some basic questions to consider as they relate to your company’s financials specifically, and how you can build a better, more knowledgeable practice around them:
- What accounting and finance roles are in place in your organization?
- What is the responsibility of each role?
- What is the cadence of communication and meetings with these roles?
- What reports do you need to see weekly, monthly, quarterly? (It helps to see snapshots of balances and cashflow, AP and AR, and other pertinent numbers that affect your specific business on a weekly basis.)
- How do established accounting practices work currently?
- How are budgets set, communicated, and tracked?
- What other folks in the company are responsible for parts of the PnL?
- Who manages the financial model for the business?
- What financial decisions need to be made, and how are they made?
You’ll need to set systems and practices up in a way that work for you and meet the financial needs of the organization.
More money doesn’t make our challenges go away. Our challenges evolve and change no matter what our net worth statement says, and no matter how many millions we secure from investors. The key, then, is to be able to face and handle your challenges. How can you meet the ever-evolving and changing challenges in life and work with grace and ease, responsibility, and sustainability, or whatever it is you’d like to experience with money?
Best,
Ali
