Paid in Full.

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Recently a cake decorator told me she felt she was working for free.

Why?

Because she had been paid in full 3 weeks prior and yet still had a cake to make.

Good for her for getting money up front in advance.

But spending it and feeling like it's gone...not such a good strategy.

This is not an uncommon problem.  But to untangle it, we have to get good at "ring fencing" our business money.

There are accomplished decorators who continue to live "hand to mouth" always just having enough to pay essential bills and too much month left at the end of their money.  Which is a shame, because by just becoming aware of money, these business owners could be building wealth for themselves and their families.

As soon as funds are received some business owners and cake decorators go on a spending spree instead of valuing their receipts and earmarking them for the future for a particular customer's order.

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I believe that these funds get muddled up, because of the uncertainty of just how to clearly ring fence funds.  Not keeping records and winging it with the bank accounts, often running into expensive overdrafts and interest payments.  This then it feels like a vicious circle.

There are banks which allow you to put funds into "buckets" which means you can release the funds at an appropriate time.  The result of this strategy is to never feeling like you are "working for nothing".  (UK Starling Bank or Monzo as an example).

I've always worked on the principle to endeavour to try to never pay interest to a bank.  (Mortgage excepted)   

Earning money from your business should not be a hand-to-mouth strategy, but should be really aiding an enhanced way of life to compensate you for your hard work.  But you have to get organised and be aware of your income as well as spending too.

So, my tip for today is - could you get more organised with your money? And enjoy the knowledge that you have been paid in full and that you have those funds safely ringfenced for that order?