Q. Dear Meggin, you suggest that we hire someone to do things that can be done by someone else. How does one assess how much money to throw at the problem (as one former professor suggested) in our need for more time?

One of my key principles is that I can always get more money but I can never get more time. The only way to, in essence, give myself more time is to buy myself out of some tasks – by hiring someone else. From the first year I was an assistant professor (and deeply in debt from graduate school, just moved, husband didn’t have a job yet, etc.) I hired a student worker. My husband sort of wondered if I’d completely lost my head but I said, “I’ll never get promotion and tenure if I’m spending my time running back and forth to the library (this was 1988), running copies, etc. I need to be working on my classes and writing.” It was the start of some excellent investments.

Q. I fret over every dollar, wasting time and sometimes spending money on things (better chair/desk/little treats) would save time, but how does one figure out if: 1) one can afford it, 2) how much money it is cost-effective to spend? I heard that one should assess how much one’s time is worth per hour and if someone can do things for cheaper than our hourly rate, that’s one way of getting to the number. What do you suggest?

Part of what you can ask yourself is “What is it costing me NOT to get some help (or a better chair, or a new desk, etc.?” “What am I NOT doing because I’m running copies, calling moving companies, packing boxes, etc.?” “What is the BEST use of my time – in the big scheme of things?”

It’s really pretty amazing how little you can hire people for – and some excellent folks. That’s the good news of 9% (or more) unemployment. There are some great people looking for work. There are also tons of stay at home moms who want some flexibility in their work day. 2 of the women I hire are moms. I also hire project work from people all over the world (using www.elance.com).

I have written articles about dealing with physical clutter and electronic clutter, both of which can cause you and your businsss significant problems. But in this article, I want to give you 5 tips for dealing with your money clutter. Do not discount the wisdom in these brief, but brilliant suggestions.

1. Determine exactly how much money you have. You may already have an Excel spread sheet that shows this – or you may be in the situation that far too many Americans are in (I can’t speak for the rest of the world) and that is that you have have essentially no idea or you have a rough idea only. What I am telling you here is that you need to know EXACTLY.     This will take some time, but it is the first part of clearing your money clutter. How in the world can you expect to be a business owner (a successful business owner) if you have no idea exactly how much money you have? Take the time and do this within the next week. Make it a priority.

2. Reconcile your business checking account. If you do this regularly, then this will be no big deal. If, however, you have never reconciled your business checking account (which I have heard repeatedly from people when I ask them about this), then expect this process to take some time. Depending on your familiarity with your accounting system (e.g., QuickBooks) and your understanding of how to reconcile, and consider hiring someone to come in and help you with it. Do not just turn it over to someone. It’s your money and you need to have a hand in getting a handle on the “clutter.”

3. Invoice all of your customers whom you have not already invoiced. It is hard to get paid when you do not send out invoices. That seems like it shouldn’t need to be stated, however it is staggering the number of small business owners who never invoice customers for services or products already delivered. It may be because you don’t have a bookkeeper who helps you take care of this or it could be because you “forget” that you need to invoice clients. Or, it could be that you are uncomfortable with acknowledging the value that you deliver.

4. Follow up with any customers or clients who have been invoiced but haven’t yet paid. That is money just waiting to come back to you, but you may have to track it down rather than leaving it in the “pile” of money clutter. Be strong. If you have delivered the “goods,” you are asking for what is rightfully yours and it is your responsibility as a business owner to clean up this clutter.

5. Pay any outstanding invoices or bills that you have. Part of your money clutter may be that you are not living up to your end of the money flow equation. Pay your outstanding bills and if you cannot pay them in full, acknowledge that and get something worked out NOW with the business or service to which you are in arrears. Clean up the clutter.

I want you to take these five steps over the next five days and see what happens for you.

Money clutter. Have you ever thought about that concept? I’m sure you’ve thought about – and maybe dealt with – your physical clutter because you know that it can take a tremendous toll on your productivity.

But what about money clutter? Any possibility that you need to deal with this, too?

Let’s explore a few ideas related to money clutter. Apply the ones that resonate with you.

1. Go through your office, your wallet, your briefcase, you desk drawers, your car (or anywhere else that you know such things get tucked) and find all the gift certificates, gift cards, and other such items. The next step, which needs to be done promptly, is to use them, extend them, or give them as a gift to someone else who will use them. Money needs to be in motion.

2. Go through your office, including any stacks of unopened mail with the intent of getting rid of clutter and of finding money that is just lying around. When I have worked in people’s offices to help them get organized, I don’t think there has been even one time where we haven’t found one or more “surprise” checks. Sometimes, the amounts are small and other times, the amounts are stunning. Frankly, the amount you find doesn’t matter while you’re doing this. What matters is that you are paying attention to your money and not just casting it aside (which is really what you’ve done when you’ve let it just lie around, hidden and untended to).

3. Take an inventory of all the subscriptions that you pay for and what their renewal date is. Either set them up to automatically renew or put a reminder in your tickler file to cancel. This includes magazines, domain names, software services, online subscriptions, memberships in groups, etc. We added all these over long periods of time and ultimately, we don’t cancel them and have an extraordinary amount of money flowing back out the door each month for unused and unwanted items or services. It’s all money clutter.

4. Make sure you are paying yourself each month – or even each week. This does not mean taking money out of petty cash. It means you are cutting yourself a paycheck. You are running a business, right? Business owners get paid.

Do you think this won’t make a difference? Try doing all of these and see what happens. You are costing yourself and your business tremendous stress and money by having money clutter that is unresolved.

I am not sure what the latest statistic is, but I believe that it is that at least 65% of people in the United States are within 2 paychecks of losing their home.  WOW!  That is a scary thought.  Regardless of the exact numbers, most people in the world do not have any “money pockets” (which is not the same as ‘money bags.’  The purpose of this article is not to get into social commentary about people who do not even have jobs or what that situation involves. It is for people who are working and need to attend to whether they have pockets of money for emergencies and for making great spending decisions.

I am a subscriber to Paulette’s newsletter and recently, she included this information, which really got my attention:

Then there is always the price thing. Some people think anything is too expensive (translation is simply that it’s more money than they view the offer being worth to them). Other people question how valuable something can be if the price is too low. Everyone has a number that they assign to the value they place on anything, whether it’s tips booklets or a year-long round-the-world trip. It is your mission to find out what that number is and to discover how close you are to it. When you ask “what’s your budget?” it can be a circular conversation.  A way I’ve found to break that cycle is to give a silly range – “are we talking $100, $1,000, $10,000, or a million?” That usually prompts them to drop their guard and say “oh, we were thinking $1,500.” Now you know if you’re in the same range or not, rather than playing guessing games in presenting a proposal, like shooting darts on the wall.

If you have been around Paulette for any length of time, you know she uses both humor and a straightforward approach – both of which I can appreciate.  To learn more about her and what she has to offer, you can access her site here (plus you’ll see me along with several other tips booklets authors).

 It’s a must-read for all women, not just women in academia.  Order it today (and then get your friends to read it, too).  Wish I’d had it to read 25 years ago.  Let’s just say it would have paid for me to buy thousands and thousands of copies.

Since you’ve done so much work consulting, I’m wondering if you can provide me some quick advice. A small college has asked me to consult on an evaluation of their promotion and tenure policies.  I can imagine how this would work substantively, but not financially. Have you ever done something like this? If so, what type of a fee is appropriate?   Thanks in advance for any advice you can provide!

Meggin:

How long do you think this process would take you?

Response:

I don’t know?!  I imagine one full day on campus talking to people, one day of prep (reading their written materials and such), and one day for drafting a report and recommendations. Honestly, I’m just guessing.

 Meggin:

So three days is a conservative estimate for something like this…and with most consulting…it grows beyond what you are imagining…you’ll connect with people and they will want to talk (as they should) and email you and call, etc. Plus, what if you get into a can of worms (which is very possible). How are going to be doing your report? If it’s just written, then that’s one thing, but if you need to discuss it with the Provost or whoever it is that is hiring you….

I’m not sure what your hourly or daily rate is for consulting, but let’s say it’s $175/hour, then I would charge for at least 24 hours (3 full days + the overflow into a fourth “day” – and it could easily go much past that) so that’s $4200 (plus travel, etc.). If you have a daily rate, say $1750/day, then it would be $7000 for ‘four days’. I wouldn’t say anything to them about days or hours…I would talk about the services you will be providing and give them a price, but not break it down.  You are providing value to them that few people could.  They aren’t hiring someone from the yellow pages at an hourly rate, so you need to price your services as a package – and then you work til the job is done.  After you’ve done more things like this, you’ll have a better sense of how long it will take. 

You could also offer options of what you will do at various price points. 

Response:

THANKS!  This helps so much.

This book will wake you up.  I only wish it had been available at the beginning of my career. 

The authors also have a new book, Ask for It: How Women Can Use the Power of Negotiation to Get What They Really Want and it is also worth reading. 

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If you love having books arrive FAST, be sure to sign up for Amazon Prime…free 2-day shipping for one flat rate each year (and you can have 4 family members all using it.  Such a bargain for those of us who want books NOW vs. later!)

Anyway, good way to get ahead and have something that you buy now and use whenever…forever.

First, be careful not to make this more difficult than it needs to be. I use a fairly simple system that works great for me and may work for you, as well.

·      At the beginning of each year, I create 12 files, labeled (with a label maker or something other than my handwriting, which isn’t too legible) January – December. I put those in my accounting drawer (which is right next to my computer). I want it to be easily-accessible when I am using the folders or when my bookkeeper is here taking care of my accounting.  

·      Daily or whenever I have receipts that come in (when I make purchases at stores, when boxes are delivered from UPS with receipts inside, or when electronic receipts arrive, I put them all into my “To Be Processed” accounting folder. If it’s something I charged on one of my credit cards, then I put it in that folder. Within that folder, I have individually-labeled folders for my two main credit cards, along with a petty cash folder, etc. ‘To Be Processed” simply means that it needs to be put into my QuickBooks.  

·      Then, weekly, either my bookkeeper or I will process all of my receipts and input the information into QuickBooksPro. As soon as the information is put into QuickBooks, I move these receipts and other documentation into the current month’s receipts folder (Note: Once the final statement for the credit card comes in, I staple the corresponding receipts to that statement so it’s all together in the month’s receipt folder.  

·      Then, after the month has passed, I move the folder into one of my file cabinets that is across the room from my desk so I have access to it, but it’s not in my “prime real estate.”  

·      At the end of the year, I move all of the year’s monthly folders to my garage file cabinet (where it’s archived in case I need it) and then I start the process over with a new set of folders.

It’s not fancy, but it’s worked for my business for over 10 years (long before I even used QuickBooks. As much as I would hate to be audited, I would be ready with all my receipts, as needed.

Note:  To access a fabulous teleseminar taught by QuickBooks Pro Advisor Marie Gibson, just go to the ShoeBox101 page where you can register and receive the recording, handouts, and booklet.  Marie recommends a different format than the one I use (and one that has helped me immensely in just plain understanding accounting)…and so many folks who have taken the class have implemented her ideas to get themselves squared away for 2009.  You want to have your ‘books’ in order!