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Personal and Business Finances Review

we're gonna talk about here and equipment and in gear in equipment. The first part of it was where you needed to go and pull your your camera and lens and everything. Get your serial numbers, get your replacement costs and all of that had to do this myself. I sold off a bunch of gear in the last year. I bought a bunch of new stuff. Apparently, I'm on this kick of buying gear. I don't know what's happening to me, but I had to sit down and do all of these things myself because I realize that I was still insured for gear that I no longer owned and gear that I had bought. I was dragging around out in the field with no insurance on it at all. So listen, we make these mistakes, I make these mistakes to write, like I'm not perfect. The one thing that I did want to say and this was this assignment was either are you did it or you didn't. I'm not gonna put anybody's gear list on lot up here with their serial numbers up there. That would be terrible. But everybody did it and everyone did it perf...

ectly. So you're good. The one thing I wanted to address with something that Lori said in her in her when she turned in her homework, this was written in her assignment. It said. Currently, I have a small electron ICS writer on our homeowner's insurance policy, which replaces an item at what we paid for it. I would 90% tell you, and I could be wrong, like your your homeowner's insurance policy might be different from from mine or my renter's insurance or anything like that. But I can tell you that with my homeowners policy in Florida and with my renter's insurance right now, if that small electron ICS thing is being used for a business, my home insurance did not cover it. So you need to be very careful if you're relying on your home insurance to compensate you. If your gear is lost or stolen, you need to make sure that it also extends to things that you use for your businesses. Well, it very well may not. So just be really careful with that. Oh God, let's start getting in a finance before we take a break. And this personal and business finance and pricing and profitability where the sections that most people had trouble with. So I did it myself. And now every single time I get up here and I teach and I write spreadsheets and I put these things out. My numbers are different, and it is because I do these spreadsheets multiple times a year, and every single time I am tinkering it, and I am fine tuning it. I am never appear making up numbers in my books. I am never inventing numbers. Are they usually different? Yes, because I'm giving you my current numbers. So I went in and I did all of the spreadsheets again. I went back through 12 months of credit card statements. I went back through 12 months of bank activity. I went back through 12 months of QuickBooks for my business, and I determined, and you might wanna cry, cause I did, too, that my personal expenses were $225, a year in my business. Expenses were $330,000 a year. It cost me $330,000 to run my business. Not considering the cost of goods for everything. I fell just payroll to myself to my assistant advertising gear. Everything that it costs to run. Susan Stripling Photography is $330,000 a year. My personal expenses are shorter and $25,000 a year. That covers living expenses that covers investments that covers retirement that covers my Children's college funds. That covers the fact that I like to buy shoes that covers the fact that I want to take a vacation. None of nothing that I do is by chance, or I think I have the money to cover this. Built into that $225,000 is the fact that I want to take two really excellent vacations a year on. I want to put that into my actual living operating expenses so that I noticed save money for it. So when it's time for me to take my kids somewhere, go on a vacation with my husband, that I'm paying cash for it, that I'm not putting it on a credit card that I'm not hoping I can afford it planned for its like can afford it. I'm not telling you what my personal assets are, and I'm not trying to be rude and I'm not trying to not share, but I'm not gonna tell you how much I have in my IRAs. I'm not telling you what's in my kid's college accounts. I'll tell you how my time creature beating. Now, I have no problems doing that. Um, but there is a certain level of privacy that I hope that you guys will afford me and letting you into my personal assets. I just feel is a little bit too much. Do I have personal assets? Yep. Are they substantial? But are they enough that I'm on track to retire when I want to retire? Absolutely. They are. So I am very careful with money. I am very obsessed with managing money, and I'm also obsessed with not shooting weddings until I die. So my final number, um, of money that needs did come in to my business to run my business and to run my life is a little over 1/2 $1,000,000 a year. And if you're laughing at that because you think that it's extravagant, that's fine. I can assure you that I do not live extravagantly at all. I live well, but it's expensive. I live in Brooklyn My rent is $ a month, $3800 a month a month. That's not utilities. That's not I mean, it's it's ludicrous, right? And at my lowest package, if I tried to make $525, a year booking my lowest package, I would have to shoot 99 weddings a year. Okay, before we all hyperventilating cry, I will get back to that. I'm going to read this slide several different times and show you what I'm doing to make that amount of money come in. So this one's long, but it's very important. I'm very fortunate that I'm only 20 years old. My parents cover my major expenses food, clothing, living arrangements and personal car, leaving me in charge only of my business pets, car gas and personal entertainment. I know, however, that this is a temporary situation. Within the next few years, I will not be relying on my parents in this way, with a wedding income of roughly 14,000 in my third year and no other job profiting close to four grand after personal expenses, business expenses in college tuition, the expenses this year have been greater than usual. 4000 equipment. 1500 to attend. WPP I 1200 on Creative Life courses. Another education, plus my regular expenses on top. None of this was purchased on credit. My father is a C P. A. After meeting with him like this is not fair, right? Like her dad's, a c p A. Come on, that's awesome. After having met with them, I have determined following now that over the past three years I've purchased all equipment. I require the only expenses I anticipate next year in my regular business expenses, plus 1500 for WPP, WPP Already, I have a greater number of 2015 weddings. Then I had for 14 and it isn't get my major booking month November when I seem to get the majority of bookings. So with that in mind, I'm on track to earn between 20 and $30,000 in income on which all profit 16 to 24. This is an increase of 400% profitability. My plan is to start fresh with my personal finances, tracking them more closely and pleasantly surprised with the current situation. My business finances Aaron, and I hope this trend continues Ah, Lane. You're probably the smartest 20 year old I've ever met in my entire life. Like if I could be doing this when I was 20 I I'd probably be retired now, Like everything that Elaine is doing is right like this is, she's she is thumbs up to everything next. I have set my accounting to very similar to suggested. I have a checking and savings account, the latter being primarily a holding spot for taxes to keep them from getting swept up in day to day expenses. My husband does all of our taxes. He uses QuickBooks. I know I should control my own, but numbers and me are useless, and he is great at keeping me on the straight and narrow. I'm hopeless left to my own devices, but I'm working to change that. I kept I keep a rudimentary spreadsheet to make sure myself taxes kept aside. This is very common for what I was getting in, and there's no way to wade through an answer for this without sounding offensive. And I I apologize if I sound defensive. That's not what I'm trying to dio, but I got a lot of responses from women that said, My husband does the taxes and I'm no good at numbers and you know, my husband does the finances for the house, and I'm no good at numbers. Well, respectfully, if you are going to run a business, you need to learn how to be good with numbers. And I'm not saying this to burst any bubbles or to be mean or to demean anybody out there. But unless you are running the business with your husband, you need to be able to do the business numbers yourself. It's incredibly, incredibly important, and people say things in their homework assignments like I'm useless with numbers. I'm hopeless at numbers. I just don't understand it. You've got to learn to understand it. Shooting being a wedding photographer is like 5% shooting in 95% business and numbers, and you've got to get a lock on them so that you will understand how every decision that you make financially and pricing wise and what not affects every single other thing. So if your husband is the one, or if your wife is the one or your boyfriend, your girlfriend of your pet or your partner or some assistant or employees. If they're doing the numbers and you don't have a handle on what they are, you have got to get a handle on what they are. Because otherwise, you know the backbone of your profitability. And being able to move forward is understanding your numbers. And you've just got Teoh, you've got Teoh. Um, when I finally pulled my finances all to myself and I I understood every single nuance of the financial workings of my business and the taxes and the bills into this into that, I suddenly became a much more profitable photographer and it had nothing to do with my work. It just had to do with knowing my business inside and out. And you've got to get this down. If you have to hire someone to teach you how to do it, you've got to learn. I heard this several times. This is the first month I've actually put something my family on a budget because now I have some personal and business related financial goals. I'm not putting your spreadsheets up here, guys. I'm not gonna embarrass anybody by putting their personal life spreadsheet out there. The point was to do it and you did it. And I'm extraordinarily proud of you guys for tracking your expenses and for delving into these numbers. And they were depressing for some people, and they were very eye opening for some people. And to hear something like this is the first month that I actually got a handle on what was coming in and going out, and I put my family on a budget. This is amazing. And this is what I was hoping with this section. I've attached my spreadsheets, but as an overview, if we stay on track will be spending right about what we're making. Plus in savings. Unfortunately, my husband doesn't save money besides his retirement plan through work. So I'll have to try to save for both of us, and I feel miserably. Luckily, we don't have a mortgage and we have good retirement funds. And in eight more years in school, loans are paid off. We should be able to invest even more in the future. I was encouraged looking through all the numbers. We don't have excessive dot and our house is paid for. So I felt like we're living within our means. I'd still like to get rid of what debt we have as quickly as possible with business expenses factored, and I think we'd be in the red. But I have five more weddings this year that should even things out. This is doing it right. This is admitting where you have problems. This is saying there are things that we could change their areas that we need to improve in And what I noticed a lot when people were doing their their business and personal finances is they were responding by saying here these spreadsheets, whatever they are, what they are. But this is what I learned from them, and that was the most important thing is that you learn from looking at all of your numbers together, and most people didn't have questions about them. They just had issues that they were realizing in themselves. And there are many more slides about personal and business finances, and we will get to them. But I wanted to take a few more questions before we take a quick break. I need to get some more coffee and then we need to come back and keep pounding through some numbers. But how are we feeling in the chat rooms really get mad and leave. The second we start talking about money. No, no, People are still like great interaction. I just want to read this to you. So this is from flashback photo that says, Susan, you are making me cry. Thank you so much for having I know, right? Thank you so much for having read my email and for encouraging my business plan some days. I think it's crazy to be 20 years, 20 years old, having been shooting weddings professionally since I was 15. Some days I get frustrated, and I do consider giving it up and taking in 9 to 5 job. I can't tell you how much it means to me that you approve. I When I was 20 years old, I was in college and I thought I was going to be an actress when I grew up. And I if I had business sense and ahead for finances and a knowledge of what was going on around me and just a better hold on everything. Imagine where I'd be right now. Like that mean Elaine should be teaching this class right? She should teach 20 year old You know how to start a photography business because she's nailing it right now. Honestly, awesome to hear. All right, So this question is in line with marketing. How do you find couples that value photography and a great experience instead of price hunters we've found through the years at the brides who value photography also value our work. They give us the time to be creative. We want to provide our best work. And it's not always about the money we have posted online. Our best work, and that has allowed us to book couples who book for our own Who booked for our work is that it isn't a correct approach. I mean there, isn't it? There was something in there about money. What do they say about? Do you have the question in front of you with something about how do you find couples that value photography and a great experience instead of price hunters? There's something else in there. No problem. They found through the years that brides who value photography value the work because they give them the time to be creative. It's not always about the money. To them, it's not always about the money to the clients or to the photographers, photographers, I This is where I'm gonna sound like a jerk. I hate answering. Some of these will sound like a jerk. I hate to say it, but it's it's about the money for me, right? Like it's well, I think that it is very idealistic, and it's wonderful to be able to say, Listen, I just want clients that value me and I want clients that get what I do and I want clients that you don't understand and appreciate me and give me time. In an ideal world, we all want that. But you're not gonna get that with every client that you've got some clients or just a paycheck, where you go out to a really great job for them. And it wasn't you didn't get all the time you wanted, and you didn't get this great emotional interaction with them. It's it's it's a business decision. I've taken weddings that I'm like. Listen, I know I'm gonna get 15 minutes with the bride and groom, and I know that photography is not necessarily their priority. But, you know, we're gonna be cool. It's gonna be fine. And I let them book me and we get along really great. I think that it's a really good approach. You are never going to find people. You're never gonna reach a point in your business where every single inquiry wants what you do and is not concerned about price. You will always find people that are concerned about Price. I you know, I got over 100 enquiries in September and I booked four weddings and the main reason that people told me that they weren't gonna hire me with Price. We love your work. It's too expensive. We love your work, but it's too expensive. And if I change things up toe work with all of those people who love my work, I would have booked my entire 2015 in a very unprofitable way. So there has to be a desire between please and the clients and being profitable. And if you're trying to cut out price shoppers all together, it's just never gonna happen because its people are just gonna keep shopping on price. There's nothing wrong with that. We were just talking about personal and business finances, and I noticed that as they were going over what was going through their personal and business finances and doing their spreadsheets. Everyone was having the same sort of ah ha type of moment and they go as follows. We're doing great for our expenses, but we wish we had more savings. That seems to be a pretty universal issue for everybody. I wasn't considering my spouse's income and things he or she paid as part of my expenses. And now that's something that I think is actually fairly crucial. If you are a household, whether you have a husband or a wife or a partner or a girlfriend or a boyfriend or whatever anybody who contributes to the day to day running of your household financially, all of that needs to be brought in together. So if you have a husband or a wife or a partner, you know what I mean and their income helps. You need to consider their income When you're considering income for the household, you also need to consider all expenses when you are considering three expenses for your household, so I would have a lot of people write in and say, Well, I mean my husband pays the mortgage out of his paycheck, so I didn't really include his paycheck or the mortgage. Well, I think it's important that you include both in your income and your expenses, because what if your husband loses his job? Or what If your wife decides she wants to change careers and there will be an income change. You need to know as a household what's coming in and going out. So if you want to make any different financial changes as a household, you're capable of doing that. I wasn't considering the tax we had to pay. That was major People were looking at all of their expenses and they were looking at all of their income. But they weren't figuring out estimating the income tax that they were going to have to pay. I thought I was too young to be planning for retirement, and I thought we had plenty of time. The same for college. I've been saving for college since my kids were babies, but it would be super easy to all of a sudden wake up one day and realize that you have 1/5 grader and now, instead of having 18 years to save, you've got seven years, right, so if you are gonna be saving for your kid's college. There's no such thing is too early to start. Same with retirement. Listen, I like shooting weddings. I like being a wedding photographer. I like my job. Do I want to do this for the rest of my life? Dear God, no, of course I don't. I don't at all. You know, this is Do I like the artistic cited it? Yes, I dio. But I am very much a business owner. I very much I'm running a business here and at some point in time, I do want to reduce my workload. You know, I'm 36 years old. I can keep banging out weddings at a high volume for a you know, a large number of years. But at some point in time, I don't want to shoot 50 weddings a year. I don't want to shoot 30 weddings a year. When you shoot weddings a year, there'll be a time that I don't want to shoot weddings at all. And if I am not planning for the retirement, that day is never going to come. So what? I've been noticing most with people's personal and business finances. When they were sending it in were either, you know, we weren't saving enough. We weren't staying on top of our expenses enough. We weren't considering all of our income. We weren't considering all of our expenses. So the answer is with most of the homework that was being sent and it was not. Can you help me with this? It was Oh, God. I just realized this with on our own household. And now we can make changes, which is really what the goal of this assignment was entirely Yeah, I'm back When you were listing the personal and business, it conjures the general numbers. You said that the business expenses also included your pat yourself. But then you were listening personal expenses as well. Is that kind of like doubling up or is that no? Does that make sense? If the business expense to painting? Yeah. Every single month, I take x amount of money out of my business and put it in my personal life to pay for myself, My personal expenses, air things like rent And what not when I take like, let's just make up a number. Let's take $10,000 out of my business. Every single month to pay myself. That now becomes my personal income. So that's money that's coming in personally because I'm doing my personal expenses and my business expenses completely separate and personal expenses are paid from with my paycheck that I take out my business got at Yelp. I just was under the impression that was kind of listed in there twice because you're paying it out and then you're also listing the same number for the personal. So I'm the total number, not an expense, like my personal income is an expense out of my business. But it is an income on the personal side of things. On the first time I did these spreadsheets and even the second time I did these spreadsheets, it was frustrating cause you have to figure out how numbers coming out from one go into another and then come back into another, and once you get the flow of it, then it's just revisiting it multiple times a year, just checking the sea as your numbers are changing and like in QuickBooks at the end of every single year, I pull up my profit and loss for my business, and I compare it to the year before. And then I compare it to the year before that, cause I just want to see I just want to see how the numbers are changing because I'm obsessed with him. So funding future gear purchases. This was another thing that we another homework assignment, and for me, it's a budgetary line item. I have a discretionary amount of money every single year to buy new stuff, whatever that would be now. For the past two years, I bought almost nothing. But this year I spent an awful lot of money on new things. I opened the studio. I bought 1/2 a bladder like That's not cheap, you know, It was it was just a very expensive, um, time of year. But I was able to spend extra money this year because I hadn't spent much money in the years prior. So when I'm looking at funding gear purchases, I plan for a certain level of income every year to go towards buying new stuff if that helps. So what people were saying about funding future of your purchases in their homework were things like this. I absolutely can't afford that much. As of right now, I can, however, rent essential equipment at the cost of $155 from a local camera equipment shop per weekend. I will fund the purchase of new equipment by setting aside $300 from every wedding into my savings account until I can afford to pay in cash. This is how I plan to purchase other equipment, adding 155 in would be in would be rental fees to the $300 I was already setting aside. Which means that just after four weddings, I can pay for my brand new ATM, Akerlund and cash and won't have to go into debt over it doing it right. This is an example. I got a lot of examples like this out of the homework, which was, I plan on setting exercise every time I shoot to fund the gear purchases that I know that I want to make in the future. I have no idea how I'm going to fund gear. My credit cards are maxed out and at the moment from previous medical bills and other investments that didn't pan out. My dream total is 18,000. However, essentials is only 6500. I've been trying to save up money for me, 20 or job, so I can reach that. Until then, I rent the lenses I need for each wedding. Perfect. So I skip one period. As much fun as it was to make my dream list of gear, I definitely need to get serious about what I actually need to be successful. I bought quite a lot in the past two years, and I'm encouraged to know that with an investment of 6 to $7000 some smart shopping, I should have everything I need to run my business creatively and professionally. After going through finances in the earlier portion of the assignments and doing some planning with my husband, we decided that my business would just have to pay for itself. Even if this means slowly using my income to build up the funds I need, I'm going to set aside half of what I make this year to put right back into my business. Another cost of my business that is not gear related is to renovate this best space that I'm currently using as a studio in my basement. I am hoping to use my income for this expense is, well, again, doing it right, seeing a lot of people who are looking at their personal in their business finances and looking at the money that's coming in in the money that's going out and making smart decisions about how to proceed in the future. Christie, I hardly ever by multiple things at once, so this is a hard question to answer. I tend to save up for one thing, get it and then start saving for the next thing. I also use Bill me later. Sometimes when I want to buy something and haven't been saving, it gives me six months to pay it off with no interest. And I only do that if I know I'll have funds coming in during that six months. I could shell out the 28 for my checking right now and get those couple of extra things, but I won't. I like spreading stuff out more. Nothing wrong with that at all. Charlotte. I plan on funding future purchases from any profits that I make. If I don't have the funds I won't purchase, and right now I'm able to work with the equipment that I have and still produced great results. Perfect. This spread put a lot into perspective for me. I need to raise my rates. I also need to stop buying so many things. Now that I have my I guess that was essential gear. I won't need as much next year and I will hopefully turn a profit. As it stands today, I'm $100 in the red. No good, very important toe learn. Ah, lot of people were learning that as they did their numbers and added everything up, they had stuff they didn't need. They had too much stuff. They didn't have the right stuff. Denise, I'm blessed to have not gone into debt for the items that I have currently purchased. As I book weddings, I am placing aside money to purchase set items on list. Will it take me that longer than credit cards? Yes, but by doing this, I do not buy things on a whim which allows me to really see if there is a need for the item on. I heard this over and over again, which is very, very smart. Then I got a spreadsheet I'm really proud of of Elizabeth here. I included hers here because she basically just this is really well done, had the things that she wants and what they cost. And then she wrote up a summary. I spent the last two years collecting my essential wedding gear. I should be set for the coming few years, providing nothing catastrophic happens. In the meantime, some of my lenses are old and some are new. I'm not above buying used gear as long as the seller is reputable and new isn't important to the piece in question. A monitor, for instance, is extremely fragile, and buying a used one is not recommended by any source. I would be uncomfortable buying a used camera body because there would be no warranty and I wouldn't be able to. I wouldn't want to take on someone else's problems. Lenses, however, could be fantastic. Used fines and I always try to find a good deal on a clean lens before buying one new I've opened an Amex card to help me better trap my business spending. I pay this off right away and never buy anything without first having the money. I have funded all of my gear for my earnings as a photographer and plan to keep doing that. I do not foresee any situation where I would need a loan. But should something happen, my credit is good, and I would plan to pay that loan a paint. Play that off as quickly as possible. Very smart. So the main take away from this funding your future gear purchase with people realizing that buying on credit is not smart if you don't have the money to pay it off. If you've got an X and you want the point where you have a credit card, you want the points, put it on the credit card but have a plan to pay it off. You know, I I use my AMEX for almost all of my business purchases, but I pay it off at the end of every single month, and I don't buy it if I don't have the money. But coincidentally, I haven't bought an airline ticket for pleasure in a long time because I use the points for that. Any questions before we keep moving on the Internet awake? Are we good here? Actually, uh, here's one from WG. You mentioned the company of the Hartford on then you see the name after that. Would you mind repeating that the other company I use? Um, when I signed up for credit card processing, I first used a company called Rocky Mountain Credit on. I believe that since they have changed names and I think that they're now called the Hartford. But I could also be totally dead wrong. That is, actually on my list of things they need to do. This one this winter is to just continue to research competitive credit card processing companies. As president, cards become less and less prevalent and a lot of people are going online purchases. I find that I could I could probably find a company that did a little bit better if you don't know where to start. If you have no company that's processing credit cards for you, talk to your bank first in the first, on our first day that we did the live event that that you you do that during the winter. You look at everything right. You look at all your insurance, you're all your different vendors just to make sure you're up to date and getting the best deal is possible. And with money. I usually look at stuff once 1/4 because you know what? I'm paying quarterly taxes. I also for me, September 1st is my half year. Like I need to have half of the weddings booked for next year that I want my September 1st to know that I'm doing okay. So I always do a big year in comparison to September 1st just to see how I'm doing, You know, in comparison to how I was doing the year before.