Meet My Budget Coach: Your New Financial Ally - Episode 76
Today, I'm super excited to share something I've been working on for months. This week, we're launching my collaboration with a budgeting app called My Budget Coach. This zero-based budgeting app helped me pay off a million dollars in debt, and now, it can help you too, with the guidance of an avatar. My partner in this, Aitzarelys, is here to share her expertise. We'll talk about how zero-based budgeting can give you clarity and help you achieve your goals. Join us as we dive into budgeting tips and personal finance strategies. Let's get financially intentional together!
About our guest:
Aitza is a Certified Public Accountant, Finance Strategist, Airbnb SuperHost, and Founder of Strategies & T.E.A. Raised in Stamford, Connecticut, she began her career in investment banking and later worked in external auditing, financial accounting advisory, and financial reporting. After transforming her own financial struggles and mindset, she launched Strategies & T.E.A. to help millennials in underrepresented groups achieve sustainable financial freedom. Through her coaching program, 86% of her clients become side-hustle entrepreneurs by mastering zero-based budgeting. Aitza now supports individuals and businesses in developing effective financial management systems through coaching, consulting, and bookkeeping.
Check out Aitza here
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TRANSCRIPT:
[00:00:00]
Naseema McElroy: What's up, what's up my financially intentional people. So I have been working on something in the background for a few months now, and I'm excited to put it out there to the public.
Aitzarelys Negron: Yes.
Naseema McElroy: So this week we are going to be launching my collaboration with a budgeting app called my budget coach which is a zero based budgeting app, which as Some of you may or may not know is how I paid off my million dollars in debt by zero based budgeting but now there's another app that's out there that can help you do it with an avatar And my partner in crime On that app is here with me today Aitza is the professional that I refer people to who go through my budgeting process, because, she knows a lot more than me. So I know the basics of zero based budgeting enough for me to get out of debt. But if you really want help from a professional, you need to [00:01:00] holler at my girl Aitza. So anyway, hey Aitza. Welcome to the Financially Intentional Podcast. Super excited to be working with you. Yes,
Aitzarelys Negron: me. And I'm really excited to be working with you and your audience as well. If you're wondering what zero based budgeting is, don't worry, we're going to talk about it. But I'm really excited to share. And it's also a way that I've used to navigate my own debt journey as well and getting out what I like to call the cycle of spend.
So if you're trying to figure out what's the best budgeting method, there's definitely different methods out there, but I think zero based budgeting gives you clarity. It allows you to really see what's going on and make decisions. Decision to take action towards achieving your goals.
Naseema McElroy: definitely. And budgeting is one of those kind of things that you just, as long as you find something that works for you, I say do it, but zero based budgeting has definitely worked for me. And anytime I try to stray away from it, I see my finances take a hit. So I always go back to zero based budgeting and I love it as a tool.
Yeah, we'll talk more about it as we go [00:02:00] along, but I just wanna know, I said what's your background? Like, how did you get into this personal finance space?
Aitzarelys Negron: Yes. So for my background, I'm Puerto Rican born and raised in Connecticut, and I didn't really grow up learning a lot about money. my dad did own a business growing up. My mom worked in a factory, but in terms of financial literacy, it was how much money do we have this week, really.
And not thinking much ahead, but more of what do we need now. And so I Continued my own career in that way. I have an accounting background certified public accountant, specializing in financial statements and reporting. And even with that, when I got my first big girl job, I racked up a lot of debt because I didn't know how to effectively manage it.
And then also because of my career, I struggled with a lot of shame. I didn't want to tell anyone. So I kept it to myself, what I was going through. And that really hindered me because I wasn't talking strategies right on money with other people. And so as I started to figure out, try to pay off my debt, I paid it off.
Racked it all up again. And it wasn't until I sat through and said, why is this happening? [00:03:00] And realize that it went beyond just the numbers, but it was really understanding, what is my root cause? And my root cause was I didn't have these things growing up and coming from this place of scarcity.
So that when I had that job, I was traveling, I was doing all the things I thought that I could never have. And that's actually what was causing me to be in debt. And so instead I was able to sit back and say, all right if that's my root. What can I do? And it was, sinking funds. So for those of you who are saying what's a sinking fund, it was really saying, what are my goals, how much do I need to achieve them?
And by when, and then saving money each month to, to achieve those goals, realizing it might not happen right now, but eventually I'm going to get there and then I started zero based budgeting because it allowed me to say, all right, now I have my goals that I'm saving towards, but. Now, how am I really spending my money?
And I have an auditor by background. So I pretty much put my auditor hat on and did a financial audit on myself where I, went through my transactions. I took 3 months. This is also, 1 of my coworkers who I had finally confided in and what was going on. She was like have you seen [00:04:00] how you've actually been spending?
And so I took that. Moment to really shine a light on what was my reality, because it's easy to make a budget, but if you don't really know what your numbers are, you're not going to hit the mark. Cause you don't know what you need to change. So I did a financial audit on myself, which was basically exporting all my transactions into Excel and going through them one by one.
It took some time, it was tedious, but it was what I needed to really have that eye opener. Cause we tend to spend a lot of time thinking about big purchases and not a lot of time thinking about our everyday expenses on that rack up. And yeah, I built that into my zero based budget and, it wasn't perfect, but I started to kind of mold it.
Then I started thinking about debt payoff strategies. So figuring out which way did I want to pay off my debt, building that into my budget and really just giving all of my dollars at home and realizing I can regain control over my money situation because money is a tool, it's not supposed to have control over me.
I'm supposed to be able to use money for its benefit and not let, separate that relationship of how I valued money,
Naseema McElroy: I love that. And you said some really important [00:05:00] things that I want to touch on that number one, I think. People think if you have a degree in economics or in accounting that you understand personal finance. No,
Across the board, most people that I know that have degrees in those in financial areas do not understand when it comes to personal finances and it goes the other way to if you understand personal finances, that don't that doesn't mean that you understand business or corporate finance, even small business finance. Those are two, those are different beasts in themselves. And But I can understand the shame around like you're supposed to be so smart with money. I'm sure everybody in your family is looking at you like you're good with money because you know how you got the degrees, you know how to make the money.
And that's the assumption that a lot of people make, like you made it. So that means you're good with money. So there's shame there so that you don't want to necessarily Admit that you made money mistakes, right?
So it's hard if you don't admit it to start working on it. So [00:06:00] I just wanted to highlight that that was super important. Also, I wanted to highlight how zero based budgeting, sinking funds, all of those things. Changes the relationship that you have with money. Like you said, money is a tool and you're supposed to use it to live your life. Like you, a lot of people, but a lot of people are chasing money. And the faster that we can turn that relationship around, the faster we can work on building wealth and financial freedom.
So thank you for sharing all that. And it's just so beautiful that you have done that. So How did you now take all of those learnings and lessons that you know that you implemented for yourself and turn that into a structure that you now teach people?
Aitzarelys Negron: Yeah. So I I was my own lab rat.
Speaker 6: I'm sorry.
Aitzarelys Negron: So I tested a few different strategies on myself. But I think one of the most important things that I realized and you touched on it is the relationship with money. So it doesn't matter how many [00:07:00] strategies you have, if you do not really believe that you can achieve the goal.
You're not going to achieve the goal. And I was listening one time to a podcast and I was talking about how we're all saying, positive affirmations, affirm this and affirm that, but we're not talking about the internal vibration. And that's something I like to call like the subconscious and conscious mind.
So you can, vocally say, I'm going to run a marathon. I'm going to run a marathon every single day to a hundred people. But if deep within, you don't believe that you're ever going to run that marathon. You're probably not going to run the marathon, right? You might do a few trainings here and there, but then you're going to slack off on your training and you're just never going to meet the mark.
And the same thing goes with money. I said, I was stuck in a death cycle. I paid it off and racked it up and it wasn't until I figured out what was my root cause that I was able to make change. So my 1st step was, how can I really understand like that? Personal relation people have with money.
I'm understanding how it comes from childhood. I'm not a therapist at all, but I highly promote therapy. But doing some research on the subconscious and [00:08:00] conscious mind, 95 percent of our spending is happening subconsciously, right? We're not really thinking about it. It just happens because we've built these habits over time.
And just reminding people to give themselves grace, right? You've been. Practicing these things for however long you've been alive, so you have to move slowly with that change to make it sustainable and then breaking everything into pieces. The 1st piece is tell people, okay, we're going to sit back and we're going to take a look at how you've been spending your money.
Right that's going to take some time feelings might come up as you start categorizing transactions. I've had clients say, they start to feel that feeling of shame or they start to feel that disbelief and. Kind of embarrassment. But letting them know there's no need to be embarrassed because you are taking action to create change like you identify the problem and now you're taking steps forward.
Even like speaking life into yourself and clients like helping them practice those things and even write down negative money scripts. If you have certain things that you always say to yourself I'll always be in debt or I'm done when it comes to money, I'll figure things out. I have clients actually rewrite something positive and keep it with them and their notes on their [00:09:00] phone or on their computer.
When they say those things, because it's going to happen, right again, we're breaking these habits. You have something to combat it. You have something to say, actually, no. That's not accurate. I'm doing X, Y, and Z to change this. And then once we have, that mindset thing, that, that practice going, we've identified how you've been spending.
I leverage a template. To get people into the zero pace budget manually. So I have people do it physically because I think we depend a lot on technology and it's very easy to just have the technology. Tell you the numbers. But what does that mean to you? Is it building enjoy? Is it including things that you love?
Because if you don't have those things, you're going to probably give up and then also understanding what their money vision is, right? Understanding what is the real goal of you getting your finances in order? And it's not money. I'm pretty sure majority people. It's more time with family. It's to make sure that they're healthy to make sure they have a long life because they really care about traveling to learn about other cultures, right?
There's something deeper than the money number and that is going to allow you to continue with that budget. Because when we do that assessment, I ask [00:10:00] clients like, okay, we reviewed your top spending categories. How do your top 3 spending categories align with that money vision, right? That future you vision that you have.
And usually it doesn't. And so now they have that decision to I could just reprioritize my spending to get me closer to my goal. And again, in very key words, so people think about budgeting and think all the things I have to give up, but there's a whole other side of the calculation, right? You can increase your income.
Like you don't have to give up anything. You just have to make some adjustments, which you are in control of making. So getting them that budget. And then if you have debt, let's take a look at your debt. Some people don't want to look at their debt. They don't know how much they have. They don't know who they owe.
They don't know their interest rates. And they do what I like to call the no strategy payoff method where they're just paying off their debts. They're making their minimums at least, but there's no structure order. I let them see the different options that they have with their debt strategy, putting all their debt in an Excel, organizing it to see, hey, if you choose method, a verse B, this is how much you're going to end up paying over time.
[00:11:00] And then making sure that's built into the service budget.
Naseema McElroy: Yeah, that was really good. And I love that you incorporate that mindset piece because a lot of people just want to dive into the tools, right?
But unless they understand like the mindset, like being grateful for those money mistakes, like for me, like I said, I can say Oh my God, I got, I accumulated 200, 000 in student loan debt.
That was so stupid. But those degrees afforded me so much
in life. You know what I'm saying?
Okay. Oh, I'm grateful for those degrees. And also I think people don't understand that with zero based budgeting, you build in the things that bring you joy. So it was actually like the first time when I started zero based budgeting. That I actually did more of the things that brought me joy. And when I was doing my budgeting, when I started on my journey, it was taking my daughter to Disneyland every other month. And that was an expensive thing. That's a vacation. Even though I live in California, I got to fly, I got to pay for hotels. And so I built those [00:12:00] in, and that was actually the first time, even though I was intentionally spending, that I could actually do that,
even though before, like so much of my money, I don't know where it went, But budgeting is not about deprivation.
It's about telling your money where to go in advance, having a plan for it and using your money as a tool to get to where you need to be or where you want to be in the, enjoy your life. So I
hate when people like look at budgets as deprivation, but also know that people just, it's so hard for them to look at the numbers.
Because it's trauma
related to money for a lot of people. So it was really hard for them to dive into it and be like, this is how much debt I have. Cause believe me, Before I listed out all of my debt, I didn't know I had a million dollars of debt like Who has a million dollars of debt that's
ridiculous in it and people say that all the time But i'm like have you listed out like how much you actually owe?
And yes, your mortgage is a debt because you still owe that
If you falter all your mortgage, [00:13:00] they will take your house. Yes, have you listed out all that stuff? Okay, i'm quite sure you're pretty close to my number because nothing that I did was out of the ordinary So I like how you walk people through that.
Also, I like the fact that you actually do it manually first,
because you're right. Like when you depend on technology initially,
like it just throws a number out there and there's no emotional attachment to it.
And the reason why we get into the spending habits that we have, it's usually emotional, right?
So in order to. You have to combat that you have to come at it emotionally, right? That's why tools like the debt snowball work zero based budgeting. That's why it works. Cause you have to be in touch with your numbers and
debt is something that's like super emotional, right? Most people, when they think about debt, it forms like a ball in their stomach, right?
It's one of those things that people are really tense about. So they like to ignore it
Aitzarelys Negron: Yeah.
Naseema McElroy: at it. But yeah, [00:14:00] I love the way that you built your system and the way that it goes through the mindset first, before you get into those tools, but then it gives people the capacity to be able to deal with the things that they're starting to see.
So amazing. I love
Aitzarelys Negron: Yeah. Thank you. Yeah. And for those who are, watching, listening, if you're a visual person, I would like to use visual examples. Think about, you're going to buy a house and, and, They tell you, Hey, you love this house. You want it. You're like, this is my house. And they tell you, Oh, the foundation has a few cracks.
There's termites in the house. You start to say, Oh, I don't know if I really want that house. So like your mindset, like that is the foundation of any house you're building, not just the financial house, but your wealth house. All the things that you're building, the mindset is it.
And so think about those termites as the negative money scripts or those negative ideas. And you have to be able to say, okay, I need to sit back and hey, where is this coming from? And let me, keep asking myself that question and then create a plan to overcome it, to shift it because it's going to happen.
And if you think about, [00:15:00] where you were 5 years ago to who you are today, more likely than not, you're a different person and because little by little, you've been, fixing that foundation still in those cracks. And so don't give up on that because I can't teach you that.
None of us can really solve that for you. We can give you the tools, but you have to be committed to seal those cracks in that foundation, right? Because you can't get a new, you have to renew your mind. You can't get a completely new one.
Naseema McElroy: I love it. I love it. And I love a good analogy because I think it just brings it, it brings it home for
everybody. You are a budget coach with my Budget Coach
Aitzarelys Negron: yeah,
Naseema McElroy: app. The new app that has launched, that helps people. Go through step by step zero based budgeting with the avatar. How have you used that tool to serve your clients?
Speaker 8: [00:16:00] Yes
Aitzarelys Negron: for you to book calls with us.
If you need more guidance or assistance. And so using this with my clients, it's really just showing them, Hey. Here's his avatar. You can walk through these steps. I do include some videos so they can have the video support as well for people that are working with me specifically. But it allows them to not have to say, hey, I says, she's sleeping right now.
It's the middle of the night where my avatar is there to guide you. And I also think it provides a way for people who maybe aren't ready yet for full on coaching to still get that support to have a budget. I think that's really the beauty of it to bring. That's kind of 1 of my things to just in general about community, but.
How can we bring financial literacy? How can we bring this access closer to people and meet them where they're at? And I think at its price point, it really allows like us coaches to meet people where they're at even virtually before you get our vibe, you get to see, how we communicate because we've literally been in the back end, like putting in, our jokes and our [00:17:00] personality in there as best we could.
So you're able to get a feel for the coach. And if you decide to move forward with them or work in a different capacity, then you have that option too. But really just, I used to leverage another platform with my clients and it was confusing. Sometimes I do a check in and they're like, Oh, I haven't used it.
Cause you know, I didn't know X, Y, Z step. And I'm like you should have told me, but now my budget coach, I know it's going to be guiding them. So it'll help them in those moments where they're feeling that gap. And I think when we're doing something new, it could be scary. So there's some things phases when we're leaving our comfort zone.
The first phase is the fear zone. So if you're in this, new tool and you don't know how to use it, the likelihood of you keeping it up is probably low. But here I feel like my budget coach put something in place to help you get through that fear and unknown space and get to a place of at least some comfort.
So that's how I've been using it and why I like the platform actually.
Naseema McElroy: love the platform because I feel like it gives you so many different personalities to choose from. We all have different money [00:18:00] personalities. We all kind of approach zero based budgeting in, our own kind of unique ways, even though the fundamentals are going to be the same, but
I think what helps people be able to walk through that process is the relatability
to be able to finish anything.
I feel like if they don't relate to the person or they don't see themselves or, it just seems dry to them. They're less likely to finish it up. And there is tons of personality, tons of personal character in there. And of course I'm having my avatar on there, but I also know my limits. I don't do coaching. So I can walk you through the budget, but if you need personalized help. I have Aitza there to help you so you can schedule with her so you can walk through any of the nuances that you're confused about and that's the beauty of it like you get stuck on a step. You can go ping her to schedule an appointment with her, and then she can walk you through it.
And because the avatar is all [00:19:00] there, it's usually like a short call. So it's not like full on coaching, but if you do in the future need full on coaching, now you see her style. You see how she works and then you're like, oh, okay. I miss what I used to. I'm going to, I like her style. So then, you can use her as a budget coach or, Just your personal finance coach.
Cause
again, I don't do that because I know my limits.
Aitzarelys Negron: right. I think that's the power of community, right? I think it's important for us to, like, all share our resources. For example, I'm a CPA. People always are like tax questions. I could answer your, high level tax questions, but my specialize in financial statements, reporting processes, but 1 of my friends, she's a CPA.
She specialized in taxation. And so we constantly are. Working with each other or I'll, connect her with if you have a question on taxes, still ask them to me because I'm going to connect you with someone who is an expert in that space. And I think it's important for us to start to do that and realizing there's enough.
We're all designed to serve a certain type of person. We're all called to serve people, but that doesn't mean we [00:20:00] can't come together and still be serving our communities together and leveraging our various strengths. And it's similar to, like, when I started my journey being afraid to talk to people.
But once I started to have those conversations and create that safe space, I started to learn different strategies. I started to see things. It's a different light. And that's, one of my goals is to help other people even if I impact one person, like I tell them, I hope you're sharing what you've learned today with like your family or your network of people, because that's how we're going to spread this message and close this gap.
Especially in our communities of color.
Naseema McElroy: Exactly, and the best way to actually learn something is to teach it back to other people because it embeds that learning. So I love that. Don't just keep it to yourself. Share it.
But also leveraging community is everything. I love the personal finance space because a lot of people, have become my friends and my family, extended, but it's been lovely.
And the thing about it is, I just, I get inspiration from so many different people and it makes whatever I want to [00:21:00] attain financially possible for me. And so that's what I tell people please, choose your circle of influence. That's going to be one of your greatest assets around after your mindset, that's going to be one of your greatest assets. And I lean heavily on my community. And that's why I'm just like, Hey, boom. I don't do that. But I always got someone for you. I am the plug when it comes to resources.
So I have somebody for you, but I want to talk about like your services in general, my budget coach is a great entry level way to start working on your budget, but if you want to do full scope, with financial counseling, financial coaching, I should say what other services do you offer?
Aitzarelys Negron: yeah, thank you for asking. So I actually have a 12 week coaching program where, we go through together, setting up your budget. We go through the assessment for together that mindset work. There's homework. I like to surprise. I'm gonna give you some homework, but there's work to do. We work in a community fashion.
And which means it's a group [00:22:00] cohort. And it's, we meet biweekly and really I also have an online community where you can ask questions as you're completing your homework and tasks. You have access to chat with me if we're not on a call. So really allowing that space is something that I've been working on recently is, taking some of that core curriculum around building the budget and actually making it a DIY service as well in that online community for those who, think that they want to work on it themselves or just want to see how it is.
Before they decide to come up into the coaching. That's something that I'm adding. Cause again, I want to find ways to bring financial literacy and budget to more people. And no, one of my goals is not to make finances be an obstacle. So I'm really excited for that online community to launch in a few months.
And something I've noticed is that, 86 percent of my clients actually go on to start side hustles and start businesses. And so now I'm supporting them on the business piece and supporting business owners actually with their bookkeeping. And really understanding that financial management system.
I specifically use a profit first method
Speaker 6: [00:23:00] I love that.
Aitzarelys Negron: to help them implement their financial systems in their business. They can start making a profit, and they can start. Really focusing more on that creative end and know that their money is organized, that they have the automation of the systems in place.
And for the business owners, they also fall into that financial literacy piece. Cause what they're finding is, as an entrepreneur, you're one person wearing multiple hats and the way money in your personal life, more likely than not, you're seeing and spending money in the same way in your business as well.
And, we talked a bit about debt earlier. One of the things I had to learn. As a business owner is, I struggled. I had a lot of debt and so when I broke free from that, I didn't realize that the trauma was still there until I started the business where, you leverage debt and you look at debt in a different way.
And I had this fear of using debt and then I, again, I I said, wait, where's that stemming from? And I realized I still have the trauma from being in debt. And I had to say, okay, I need debt in my business. Healthy, right? It's all about leveraging debt. I'm not an anti debt person. [00:24:00] I just say there's ways to use it strategically and so once I overcame that fear, now I'm seeing my business move in a different way.
And so a lot of business owners, they're struggling with that because they have some financial trauma on the personal side and then it's holding them back on the business. So really helping them, bridge that gap as well.
Naseema McElroy: But I love that you talked about how that fear of being in debt from the personal. Transferred over to your business. I definitely have that like trauma, like it's hard, but also on the other side, I feel like people oversell business debt as a tool irresponsibly, like
people sell you on business debt and you don't even really have a real business.
Like you, you haven't even proved that you can
Aitzarelys Negron: It's not even registered. ahead and take on this 30, 000 debt. I'll hook you up and do all these kinds of things. And you're just like, oh, but what are you going to sell? I don't know. I just had this like really good idea. No, exactly.
can leverage a little bit [00:25:00] of debt here, but also with a plan and moving strategically. So I do agree. There's a lot of that out there in the world. And I want to say first try to do things slim.
Especially if you're a working person and you want to build a business and you're thinking about it, you're going to work a lot more hours. In your business at the beginning, it is not this like free for all eventually you'll have the system, you'll have the team and you could work a bit less.
But at the beginning, like you need to work in your business. And something that I help people on too, is understanding that even just having the idea of wanting to start a business, there's money that sinking fund, right? You have to start saving money now, because there's some costs that are going to come with that business you want to build.
Even registering your business, right? That's not free. There's a fee for that. If you want to have a product based business or you want to have a store front, like there, you're going to have to pay things. So before you even get there, you need to already be setting some money aside from your paychecks, right?
This, 5 percent that I'm saving every paycheck is going towards the business I want to build. Definitely, don't fall in the trap. I also like all the people quit your job and just start a
Speaker 6: that. part, I was just gonna [00:26:00] say that. Oh my
Aitzarelys Negron: work. I still have a full time job. I still have a full time job as I'm building my business.
And what did I do? I hired support. So two years in, I was like, you know what, now I'm ready to hire a team member. And while I'm working, and giving what I can to my job, I know that my team member is working, 40 hours on the other side, pushing the business forward until, I log off of work.
And at night I do some hours in my business. don't always believe the hype. And if entrepreneurship is not your thing, that's cool too. Guess what? Have you, prepared how you're going to have conversations with your boss to get to the next step at your job to secure that raise.
Have you come to the point where the cheese is no longer at the job and you need a new job and you need to kind of transition to another company or, something else. But yeah, I think social media has skewed a lot of things. And my thing is Hey, follow your path. Your path, it's not gonna look like everybody else's and that's okay, but do things strategically do things with a plan.
And if you have a question, ask somebody don't be afraid. That's something my dad always taught me is you're afraid to ask a question. Then that means that you're prepared to say no to [00:27:00] yourself. It's you better ask the question to somebody else and if they say no. At least you gave yourself a shot at a yes, and then you move on and you ask the question to somebody else, but don't ever be the 1 that's saying no to yourself.
Naseema McElroy: Oh, I love that. I love that. You're so smart. But yeah, I think especially like since COVID like this whole, quit your job, be an entrepreneur, kind of
move. Have people thinking that being an entrepreneur was going to be the solution to all of their problems that it would solve their burnout issues, it would solve their trading time for dollars issue, and it is, being an entrepreneur is its own beast, and you have to be ready for that.
It's not for everybody. And it's not the only path to build wealth. You can build great wealth just by working in your job.
You have to do it strategically, but you can. So I hate that there's this narrative out there that in order to be wealthy, you have to be an entrepreneur. Of course, like there's endless wealth that you can build in your own business and all of that, but you are, there are trade offs and everything.
[00:28:00] I, I hate that push, but
I love the tools that you are giving your side business, your side hustlers, like tools up front. All right. We're going to make sure that you implement this profit first system so that you are making sure you're paying yourself. Oh, I want you to speak actually a little bit on profit first, because I think it's an incredible system for small businesses and how you teach people to use that.
Aitzarelys Negron: Yeah, so there's actual book called profit 1st is written by Mike McCullough with. For those of you, and this is not sponsored by him at all, but hey, who knows? He might watch this.
Speaker 6: Yeah, exactly.
Aitzarelys Negron: but, get the book, but really it's just a very similar to 0 based budgeting. I think that's why I love it so much.
Because, on the personal side, I'm always telling you are your future. You is the most important bill. So always pay yourself 1st on the personal side. And on the business side is the same. Method in terms of the profit first, where, what it really calls you to do is to shift that mindset of the standard accounting where, you make your income as a business and you pay all your bills and at the end of the year, you're like, [00:29:00] Oh, did my business make a profit?
And on the paperwork, it says, yes, but your bank account is no. And you're wondering where's all the money go, and so it went somewhere cause we spent it. And so the profit first method, what it calls you to do is to start create multiple bank accounts and there's different banks that you can use that won't charge you fees.
Some banks, they will charge you, you have to have a minimum, et cetera, different types of management or maintenance fees to have them open. So you want to be strategic and who you're banking with, but you'll open a few accounts, 1 account for profit. One account for owner's compensation or pretty much your payroll, like you paying yourself as the owner of the business for the work you're doing in your business operating expenses for taxes.
And then I also have a small category that I call special projects which when I'm working with business owners, I always recommend they put some money into special projects, but basically this split in the system says, hey, whenever I receive money, we're going to divide it into these set categories.
So you're always taking profit. You're always setting money aside for taxes. You're always setting money to pay [00:30:00] yourself and you're covering your expenses. The profit first does have suggested percentages that you should save, but He's very clear in the book. That doesn't mean that from day one. I think that if you start from day one already implementing profit first and you can hit those percentages, but maybe if you've already been in business, your percentages might look a little different.
So maybe instead of 30% going to operating expenses, you're more at 60%. And so of course we're gonna have to make a 60% to make sure that your bills get paid. But I think it allows you, and one thing about money as a tool is that money tells a story. So when you're going through these categories, you're able to say, okay why are my operating expenses 60 percent and what can I do to change that?
So for example, in this year, something I've been doing is reevaluating my tech stack, right? Because as we know, everyone's get this technology and this software and this tool. But sometimes some of the tools do a lot of things, but you're only hearing about one, one feature that it has. So you're now you've gotten three tools and they all do the same thing.
And I think implementing this [00:31:00] strategy and profit first, not only allows you to really organize your finances, but it allows it to tell a clear story. So you can start making some decisions in your business and it gives some more visibility and same thing that I do with my clients on the personal side is having separate accounts.
Let's you look at a big number, right? So we all want a big number in our business accounts and in our personal accounts. But instead of just seeing the whole number there, you're able to say, okay, I might have, 50, 000. 50, 000. But actually, to cover my expenses, I only have 20, 000, right? Because it's how I've split it.
So it gives you that visibility. And I think even if, of course, I'm a proponent for this. I'll have our books in order our bookkeeping in order, but even if, you haven't reconciled your bookkeeping and it's not 100 percent right now, at least, in your bank accounts, you have the money split up and how you're going to use it.
And so that's very helpful. And I think on the personal side too, right? Have two checking accounts. One account for all your bills and main expenses. One account for your lifestyle. So as you build your zero based budget, that lifestyle account, hey, this is the amount of money I have to [00:32:00] live.
And you can open your app and say, oh, I only have $200 to live for two weeks, for the fun money. So it's easier than seeing all your money and trying to do the math in your mind because we have a lot of other things going in our mind, but that's really how Profit First Works. In my opinion, I think it really aligns to the zero based budgeting method and at least how I leverage that method with my clients.
But it's all about giving yourself clarity. And I think. When you're making decisions in your personal finances or in your businesses, how can I give myself a win? We want to set ourselves up for a win, even if it's a small win. Why a, it's a win, but most importantly, that when helps the mindset.
Because now you're going to feel good. Now you're like, Oh, okay. I did it. Or I accomplished this thing. Even if it was small. Now you're in your brain. Whenever you have that doubt, your brain is going to say, but you did this. You're gonna say, you're right. I did do that. So I could do this now. Yeah,
Naseema McElroy: I love that. I love that. And I know a lot of people, like, when they're starting side hustles they get so caught [00:33:00] up in, oh do I need an LLC? Or what kind of, do I need to be an S corp? And all this kind of stuff. And then trying to figure out taxes and tax savings and investment accounts.
Do you help people walk through that, too?
Aitzarelys Negron: so I definitely could walk through, the setup of your accounts and help those new business owners, especially if you're transitioning over how you need to set up your accounts. And if there's some tax implications, then, I have my counterpart that I'll connect you with or clients with on that piece, because tax planning is also a very big benefit to.
Whether you're a business owner or not, tax planning is also very key for our, us building well. And yeah, definitely depending on what type of business you have, how much revenue you already bring, bringing in will depend on how you're registering your business. And 1 of the key things I want people to know is that getting that LLC, you don't need the LLC to do your taxes, right?
It's really a legal a limited legal protection. I'm not a lawyer. Disclaimer, everyone can solve the lawyer and everything we've said here, but, one key thing is, piercing the corporate veil. It's a [00:34:00] saying. And so what that means is if you are mixing your personal money. And your business money today is the day that you're going to stop doing that today is the day that we're not going to do that anymore.
Because what happens is you might think, oh I have an LLC. If anything happens, I have an LLC. But if you're mixing your money, someone can sue you and your business because you can't prove that this is your money and this is the business's money, right? So you've done what's called pierced the corporate bail.
So you want to make sure that you are separating things. And maybe right now you're like, Ooh, I can't do that right now. We'll just start today to start separating. So you should have your own business bank account and having your business registered will allow you to actually open those business bank accounts.
So have your business bank accounts, have your debit card for your business, have the business credit card if you need to. Don't intermingle those funds with your personal funds.
Naseema McElroy: Love that. Love that. So that is for all the side hustlers out here. All the small business owners. some tips for you guys. Cause you [00:35:00] guys asked me and I don't know. So hit up. But I'm super excited because Starting this week, we're launching my avatar for my budget coach. So we're going live with that.
And as backup support, if you need additional help, it's going to be there for you to Schedule an appointment with. So let me just walk through like how my budget coach works. So it is a very affordable zero based budgeting app. And if you do want additional coaching, there is an additional fee that you would pay to get on a call with IETSA.
very low barrier to entry, but definitely one of those things that I would say if you're not ready for Full on financial coaching. It's an entry to that. Very accessible. Very user friendly.
Aitzarelys Negron: Yeah, I think it is very entry level, and I think if you're someone, maybe you've tried a few different apps before, and you don't catch a feel, there is a complimentary free trial.
That's 35 days, so you test it out without having to put a card on [00:36:00] file, seeing how the platform works, which I think is always great to be able to try something at a low cost, but that, oh, there she is.
Hi, everyone,
but the feature of being able to book the calls, right? Book the calls.
If you're spinning your wheels and it's between you and giving up just put the call. I'm going to be there to answer your questions that you might have. We will be on zoom. We'll share screens and really walk you through any questions you have on the platform itself.
Naseema McElroy: Yeah, I'm super
excited for you guys.
to have access to this. I'm super excited for my avatar to be out there because it's pretty funny. You guys, I put a lot of my personality into it. So I want to see you guys use it and I want to hear your feedback, but most importantly, I'm super excited to link you with. If you have any questions or if you feel stuck. So I really appreciate you girl. You're the best.
Aitzarelys Negron: Yes,
I'm so again, I'm so thankful to you, for even for trusting with your community and with your space. I think it's important. And this is collaboration, right? Y'all there's more than enough to go around share with people around you build [00:37:00] together. I think we're going to get a lot farther together.
And yeah, I'm really excited and I'm really grateful for this tool. I think it's going to help a lot of people and again, meet people where they are right now and if coaching is something that. You want to do right and you're like, I'm not ready for coaching right now, or I need to put funds aside.
Creating that budget that zero based budget is going to allow you to do that. It's going to allow you to save for that trip. You want to take, I just came back from a trip for my mom, like her 1st international trip that my brother and I were able to take her on because of building a business, an Airbnb business, because we set money aside.
So it's nice to be able to do things without that financial stress and all of you watching like you're gonna get there, but you have to be committed to yourself. You have to take that action.
Naseema McElroy: love that. I love that. So check out mybudgetcoach. com, browse through all the coaches there. I might not be the best fit for you, but there are several other coaches, including Aitza. She has her own avatar on there. So if you just want to skip me and go straight to her, I ain't mad at it either. So check it out.
I'm going to have the founder of my budget [00:38:00] coach come on as well. And he can talk more in details about the platform. But yeah, it's available right now for you guys to go check it out. So I welcome you to do that and let me know what you think again. Thank you. So as I said, for being my road dog and helping me out with this and as you see, she's a wealth of knowledge, you guys.
So feel free to hit her up on her socials. If you want to just go straight to coaching with her, do that. All right. Thank you so much.
Aitzarelys Negron: Thank you. Bye everyone.
Hey there I’m Naseema
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