Tuesday, March 29, 2016

How I'm going to spend my quarterly bonus.

Last year, I stumbled on a book that altered the course of my life.  As a new entrepreneur, I wasn't sure how to allocate the revenue generated from the business.  I remember watching episodes of Shark Tank and listening to the stories of start ups generating 6 figures or more in sales but the owners had yet to take a salary.  That was my absolute biggest fear.  "If they're making hundreds of thousands (or even millions) without paying themselves, how am I supposed to make it?"

The answer to my question were in the pages of Mike Michalowic's book, Profit First.  He basically laid out a clear, concise method to ensure that your business is profitable from day 1.  The book also taught me how to pay myself, set aside adequate taxes and create a profit account for quarterly bonuses.

March 31rst first will mark the end of the first quarter of the year.  According to the Profit First method, April is when I get to enjoy my first profit distribution.  It's not much, but it's absolutely everything!  This is the first bonus I've ever received that wasn't given to me by an employer.  

One of the rules of the profit distribution is that it's meant to be a reward. This means that I won't be using the money to pay bills. Nope, this money will be put to purely personal use.  I hope to see this profit distribution grow over the years. But, since I'm working with a limited amount, I decided to put my money where my goals are.

Last year, I went through a phase where I was investing in lots of self care.  This habit paid off big time and I'm ready to launch my 2016 self care routine.  First priority on the list is purchasing another series of massage sessions.  One off massages are ok but it's not the same as enjoying a 90 minute therapeutic session every other week. The benefits of regular massage are real.  

Another self care ritual I enjoyed was the infrared sauna.  I loved it so much, that I decided to invest in an in home unit. And since I won't be buying any more sauna sessions, I can use the money in other ways.  One option is to purchase another series of skin care treatments.  Last year was the first time I enjoyed professional facials on a bi-weekly basis and boy did the efforts pay off.  Those treatments made up for all the times I slacked on my skin care routine.  I'm ready to get back on track.   Lastly, I have my mind set on a series of cryotherapy sessions.  It peaked my interest ever since I first learned of the unusual experience so I feel like it's finally time to take the plunge.

Hopefully, the next bonus payout will be even better.  I long for the day when I can experience a luxury getaway as a reward for a job well done.  That will be sheer bliss! 

Although this Profit First methodology is primarily for allocating business income, it most certainly applies to your personal finances as well.  Setting up an account to stash a percentage of your paycheck to reward yourself makes a lot of sense.  I urge all of you to start your own "Intentions Account" and create 90 day challenges to push toward your goals.  Every time you successfully complete a 90 day challenge, a reward will await you.  

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