Entrepreneuring Killed My Credit Rating

Alex Turner
Oct 24 · 9 min read

(and How Profit First Got Me Back on Track)

Photo by Sharon McCutcheon on Unsplash

Wow.

This was pretty much the last blog post I ever wanted to write.

It’s not something I’m at all comfortable sharing even with my journal, let alone a stranger — and let alone the internet (or at least Medium’s corner of it).

But sometimes that’s just the way things go.

So here goes.

Let’s set the scene.

Last night I popped into my local T K Maxx for a new journal. I’m getting close to the end of my current Morning Pages journal which I started on January 1st this year.

Day One, 2019!It feels significant — probably more so than it really is.

Usually, I get through these journals faster, but midway through the year I had an epiphany on bullet journaling and immediately ditched my Morning Pages journal.

Until recently.

I’m back into Morning Pag-ing… That’s a verb, right?

Anyway.

So I’m in T K Maxx and I found a whole journal section — to my delight, they have a seriously impressive selection. I’m in my element.

And because it’s T K Maxx, they are all a really decent price. One might say irresistible.

Unable to choose between them, I gleefully take an armful of journals to the checkout, pretty damn happy with my bounty.

The guy serving at the tills I have seen twice already this week — this is my favourite shop, ok, it’s my safe place — and I get the feeling he’s not moved since the last time I was in.

Two days ago, the lady in front of me — an exasperated, harassed mother of three had cheerfully fired off a bunch of questions enquiring about his life, and as each of his answers got progressively more depressing, her tone got more and more desperately jolly.

I felt bad for everyone.

By the time I got to the counter, both he and I sailed through the entire transaction in complete silence. I kept my thoughts to myself and I left him in peace with his.

Who knows if that was better?

But yesterday I didn’t get away with it so easily.

My card got declined.

Busted.

In the moment of sheer panic that followed, I took a deep breath. Unfortunately, it’s happened enough times over the past few years.

For some reason, probably on account of the fake chirpiness I had previously witnessed this man be subjected to, I decided the only thing I could do was be honest.

Brutally honest.

Ha ha. I said lamely.

I looked down at the journals, and back up at him.

The most vulnerable eight words I think I’ve ever said to another human being. To a stranger.

It’s also completely and utterly a first world problem — I get it. That’s part of the embarrassment I was fronting up to.

In that moment, I sucked up all the shame.

But rather than be embarrassed, I felt free.

It was so liberating.

It was so refreshing to not have to pretend to the world that everything was ok.

Because money struggles have been a big part of my entrepreneurial journey since I set out on it — a part I feel less than comfortable sharing.

Nobody wants to hear that you’re racking up debts, or can’t afford groceries, or can’t afford bloody journals.

People shuffle, they look away, they blink.

A year ago, things were really pretty rough. It sucked. I finally plucked up the courage to ask for help and I asked a trusted family member if I could borrow a bit of money to tide me over.

I wasn’t really prepared for the response.

Yes.

Riiiiiight, right, right, right, right. Because of course — I felt like I should be managing too.

But I wasn’t — and that’s why I was asking.

I took the slight as cordially as I could.

Gritting my teeth, I soldiered on. And when asked again in future, pretending to the world that everything was fine felt a much safer course of action.

But it was untrue. Untrue for longer than I wanted it to be.


Thankfully, things are a lot better now.

But in those early days, it was tough. There were highs — times when I made good money — but this path can be feast or famine. In between the highs, the lows dragged painfully on.

My credit rating took a hit big time.

I imagine it’ll be a while before I’m considered worthy of a mortgage.

At the moment, that really doesn’t bother me though. This journey has taught me many things — and the biggest realisation of all is that any perceived stability I had before, with a j.o.b., and a regular salary, and a mortgage(!) — none of that was actually safe. It was an illusion, and the truth is there are no guarantees.

It just felt safe.

So even though this is a wild and bumpy ride — learning how to make my own money and provide for myself feels much, much more secure.

Granted, it doesn’t look like security as we know it conventionally…

Hence me standing at the tills in T K Maxx with these journals yesterday, with “insufficient funds” in my bank account to cover it.

It was so nice of my bank to send me a text alert on the spot — as if I hadn’t noticed.

But here’s the thing.

This story could have ended with me burning up in the fiery flames of shame — leaving the journals behind and walking out empty-handed, not to mention sad.

I coveted those journals.

It could have ended in the ground opening up and swallowing me to relieve me of the intense public humiliation. There’s been times when I’ve prayed for that to happen.

It could have ended with me pretending I had my shit together, whopping it all on to a credit card and muttering about some glitch in the universe that caused some inexplicable damage to my debit card rendering it momentarily unusable. That happens all the time — right?

But it didn’t go down like that.

Here’s what happened next.

I casually took back my card and — yes — I did get out another one.

But it wasn’t a credit card — I don’t have one.

Instead, I got out my old debit card that I haven’t used in months. I wasn’t even sure if I could remember the PIN.

Thankfully, these days, I do actually have the money for new journals. It’s just somewhere else.

Hurrah for me!! I got the journals!!

This could have all ended there.

But Checkout Guy noticed my Starling bank card, and he actually asked me about it.

My brazen display of vulnerability had triggered a question in him.

It took me by surprise.

He started talking to me.

He told me he’d heard of that bank, and asked me what that account was like.

I replied.

I said, It’s really fucking cool. But more than my cool bank card — get this.

For the last 2 months I’ve been following the Profit First method — and it has literally turned my life around.

And we had a brief conversation about money.

Me. Him.

And a queue of customers behind me.

I’m British — it should have felt uncomfortable. I probably should have chosen death over doing that.

But it felt like straight up freedom.

And I put it all down to the Profit First method.

I’d shunned it at first — never in a million years did I think I was earning enough to be siphoning off funds to savings accounts, future taxes, and my business account.

I didn’t even have a business account at the time.

And I’ve been that way most of my adult life.

But my ever-patient boyfriend persuaded me to try it — and I’m really fricking glad I did.

Profit First

If you’re not that familiar with the method — here’s an extremely basic synopsis.

It’s about paying yourself first — as opposed to surviving on whatever is leftover at the end of the month.

It’s about taking off a set percentage from a paycheck first (an affordable percentage) and doing something similar for other categories — like tax, or savings — even if it’s just 1%.

It’s about building financial discipline. It’s about creating a habit.

Now.

Let me shoot very straight here.

Financial habits are categorically not something I could pride myself on, previously. I just didn’t have them.

My habit was blind spending.

For sure, I love a good bank rec — but I had no real control over the shitstorm that was my initial spending. And that became abundantly clear when I sat down and got real with myself and the Profit First method.

I’ve been doing Profit First for a couple of months now — and I’ve got two observations so far.

Firstly: it’s a million times easier than I thought it would be — it almost immediately felt like second nature. It fits like a glove — like a part of me — it feels so damn obvious. The habit came so quickly that it feels like I’ve always done it — I simply cannot believe I didn’t do this before.

And secondly. It has changed everything.

From chronically feeling like I never have enough money — I feel like I’ve got plenty. Okay. I at least have enough.

I have ‘spaces’ for things that I’m saving for — so that when I do make more expensive purchases, it doesn’t impact that week or that month. It doesn’t throw me off in the slightest.

I can absorb the cost because I planned for it.

I feel prepared.

And that makes me feel relaxed.

I was always running out of money before I started Profit First. In two months, I’ve not worried about money once.

I’ve also not once — apart from yesterday’s #JournalGate — run out of money.

That is a good feeling.

That feels like security.


So now each and every time I get paid, I meticulously divide it up 4 ways, now always the same percentages —

  • operating (daily living) expenses
  • business account
  • joint account for household expenses, and
  • tax / savings.

Okay. Check in time.

Are you still with me?

Because I just need to go back to T K Maxx for a moment.

The journals would have been a legitimate business expense for me yesterday — but I clean forgot about it. In the moment, I did actually panic a little bit, and so I had bumped it on to my card for my fifth (my original) account — the one I get paid into.

This account should never be used to spend money — it’s strictly receiving only.

What I did was a Profit First no-no.

But I’d panicked. I had first tried to pay for the journals out of my Operating Expense account — but there wasn’t enough in it to cover it.

And that’s because I am fastidious with this, y’all.

Somehow — and honest to god I don’t know where this came from — I’ve developed some kind of nerve of steel with regards to finances, and I only keep enough in my OpEx account for the weekly basics.

But let’s put these finer details aside.

The point is — the money is there, safe in a space.

I have spaces for lots of things — clothing, holidays, business expenses — in fact, I have a whole other business account, and a fancy card for it too.

Who. even. am. I?

I am in love with this system. I feel like a new person.

I am a new, relaxed, person.

It has transformed my life so significantly in two months — that in those two minutes at the till, I attempted to pass it forward on to Check Out Guy.

He looked dubious. He told me about his fears, and his situation. I told him about mine, and my shitty credit rating situation, and how this still works for me.

How I am thriving now.

So I really, really hope he takes me up on the recommendation.

Because this system works for everyone.


I urge every single human being to try this system. It takes some tinkering with the numbers to find what works, and it takes commitment to build the habit — and it also requires some pretty brutal honesty with yourself about money.

That’s why it’s a game changer.


For more about Profit First — check out Mike Michalowicz’s book.

I also found this article extremely useful to get my head around the method and to find a way to implement it in a way that would work for me.

I can’t recommend it highly enough.

So do yourself a huge, abundant favour, and try it. Just see what happens.

The Startup

Medium's largest active publication, followed by +538K people. Follow to join our community.

Alex Turner

Written by

Founder, feminist, entrepreneur, coffee + self care

The Startup

Medium's largest active publication, followed by +538K people. Follow to join our community.

Welcome to a place where words matter. On Medium, smart voices and original ideas take center stage - with no ads in sight. Watch
Follow all the topics you care about, and we’ll deliver the best stories for you to your homepage and inbox. Explore
Get unlimited access to the best stories on Medium — and support writers while you’re at it. Just $5/month. Upgrade