Financial Education

How to budget as an entrepreneur: My Chat with Suze Orman on Huffington Post Live

OMG. To say that I was excited to get an email from Huffington Post Live asking me if I wanted to go on-air with Suze Orman is a HUGE understatement.

So excited to go on air. I opted for a clean makeup look for the show. Yay!   Foundation:  Hello Flawless in Nutmeg by Benefit and Golden Deep by BareMinerals. I highlighted my brows with Benefit's High Brow Glow. For an extra pop, I lined my eyes with Benefit's Push-Up Liner and false lashes. For extra good luck,  I wore "Risk It All" lipstick by Bare Minerals  under Too-Faced's light gloss, Sweet Maple. *Muah*

So excited to go on air. I opted for a clean makeup look for the show. Yay!

Foundation: Hello Flawless in Nutmeg by Benefit and Golden Deep by BareMinerals. I highlighted my brows with Benefit's High Brow Glow. For an extra pop, I lined my eyes with Benefit's Push-Up Liner and false lashes. For extra good luck, I wore "Risk It All" lipstick by Bare Minerals under Too-Faced's light gloss, Sweet Maple. *Muah*

I literally started crying with joy when I read the email. And shared it with my wonderful Facebook friends. Suze has been an inspiration to me for as long as I can remember. Not only when it comes to my personal finances (I own every single one of her books and have read them each several times), but also her philosophy of love when it comes to money and being true to your authentic self.

A couple of years ago, I moved to a town called Emeryville in California. The same town that Suze Orman got her start working as a waitress at the Buttercup Grill. I launched my bookkeeping business, catering to the fashion and beauty industry, and named it "EmeryCloud" because of Suze Orman's immense impact on my life.

Today, I had the opportunity to go on air with her and ask a question for entrepreneurs. We all know that starting a business is tough. Especially in beginning, when you don't know much money you'll bring in each month.

I asked her for her advice to entrepreneurs on how to pay yourself a salary and create a savings/investment plan when you have fluctuating income.

Suze gave me fabulous advice that I wanted to share with you. Below are three key things that every entrepreneur needs to do to manage cash flow and expenses. (Click to tweet and share with your friends!)

Suze Orman's Tips to Entrepreneurs

  1. Figure out how much you need to earn each month to cover your expenses. Know that total!
  2. Every dollar that you earn above and beyond that total needs to be put in a savings account. If you need to make $5K each month and you earn $7,000, put that $2,000 in a savings account. Be disciplined about not spending the extra money. 
  3. Look into opening a Roth-IRA. Unlike a traditional IRA, you can pull out this money at any age with no penalties or tax implications. Start putting your emergency funds into a Roth-IRA and watch your money grow!

If you want to watch the full episode where Suze covers more awesome advice on how to deal with student loans, mortgages and being your authentic self in the financial industry, click the image below!

Danetha Doe is the author of a Simple Guide to Accounting and Financial Strategy for New Entrepreneurs. She is the founder of Danetha Doe Consulting, a business development agency based in San Francisco. Connect with her on Twitter, @danethadoe.

 

Celebrity Tax Evasion and Business Fraud: 3 things women should do after Teresa Giudice's prison sentencing

In late 2014, Teresa Giudice- the captivating, hot-tempered, gorgeous Italian mama from the reality show Real Housewives of New Jersey, was sentenced to 15 months in prison. She and her husband have been convicted of defrauding the IRS over a period of 10 years.

The charges included filing false W-2s, misstating their income in order to receive construction and mortgage loans, tax evasion to the tune of $1M, wire fraud and bankruptcy filing fraud. 

Teresa began serving her time yesterday in a federal state prison, just days after the holiday season.

While some may claim that they are getting exactly what they deserve, my heart goes out to Teresa. I can't speak on Joe ( I'm honestly not sure how he does earn a legitimate living), but I literally teared up watching Teresa's interview with Andy Cohen after the sentencing about how she truly didn't know what was going on during the time.

I believe Teresa had no idea what was going on financially during the last 10 or 15 years. Far too often, women leave the financial dealings to their husband. Whether it's because the husband is the breadwinner, or they don't feel like they are smart with money, the vast majority of women do not regularly engage with their finances. 

Throughout the Real Housewives show, Teresa and Joe Giudice flaunted their lavish living that included a $4M mansion, a summer home on the Jersey Shore, opulent parties and $2,000 handbags. As it turns out, their wealth was built upon fraudulent undertakings. And the judge, in an effort to show that white collar crime needs to be punished, sentenced Teresa to 15 months in prison. Once she finishes her time, Joe will serve 41 months.

Teresa Giudice and Joe Giudice in their one-on-one with Andy Cohen regarding their prison sentences. Clip from Watch What Happens on Bravo.

They have each been ordered to pay $400,000. And to make sure they each pay their share, the judge ordered that they separate their business and personal finances. Otherwise, Teresa, who is a best selling cookbook author and successful media personality, may foot both of their bills.  

This situation is especially tragic because Teresa has four girls all under the age of 15, who will have to spend over a year away from their mother.

While I can't speak to Teresa's specific situation, the numbers show that most women probably have no clue what is going on with their household finances. In Teresa's case, she filed her taxes every year, but did not review their accuracy and signed contracts without fully understanding what they entailed.

It is situations like this that inspired Amanda Steinberg to launch Daily Worth in order to educate and empower women around the subject of money. Daily Worth is the #1 website for women looking to gain control of their financial lives with nearly 1 million subscribers. 

In 2012, the Daily Worth surveyed 10,000 women about their relationship with finances.  90% said they were the primary bill payer for the family, but 60% said that their skills were below average when it came to investing and financial planning.

When it comes to entrepreneurs, the numbers are similar amongst women. And they leave the bookkeeping, accounting and the majority of the financial matters up to someone else or avoid it completely.

My hope is that this situation is a wake up to other women to pay more attention to their household and business finances.

While it's helpful, and advised to work with a professional, make sure you are educating yourself daily on topics like investing, accounting, saving, taxes and financial planning.

If you are working with an accountant or financial planner, meet with her regularly (at least quarterly, ideally once a month) and ask lots of questions. Make sure you are doing your bookkeeping weekly or if you have a bookkeeper, require that they send you a "reconciled statement" report at least two times per month.

And if you have a significant other, schedule a standing weekly or monthly date to go over upcoming bills, any outstanding debts and financial plans. 

Here are three things you can do today to help you become the smartest money person you know.

  1. Schedule a time in your calendar to review your bookkeeping and personal bank accounts every week. My weekly bookkeeping date is every Sunday morning from 9-9:30. Make a note of upcoming bill due dates, including quarterly tax payments, and outstanding invoices.
  2. Make a date with your significant other to go over your finances. Do this at least once month, ideally every week. You can even do it over champagne to make it fun. #MoneyandMimosas
  3. Read's Xero's small business guide on how to manage your finances and cash flow as an entrepreneur.

And now I'd love to hear from you! What is one thing you will do this week to improve the relationship with your personal or business finances?

Danetha Doe is an accountant and product launch strategist. She helps women business owners better understand their finances and create plans for revenue growth. To learn more about her services, click here.