I stopped running from creating a plan for my money.

As of today, I've been away from my blog for 6 whole weeks. It seems like a lifetime.

I'm so grateful for my biz soul sisters for supporting me with their beautiful guest posts. In all honesty, there were a couple of weeks there where I couldn't see straight. Forget blogging... I was just focused on staying awake in the middle of conversations. This time away has been an experience in cultivating curiosity and waiting patiently for my body to be ready to hold it all.

But next Saturday, on April 23rd, I'm finally coming back. To the home and the tribe and the creative space that I love so much. In just the past two days alone, I've written enough to fill a month's worth of weekly blog posts. I can't wait to be with you all again.

In our last guest post of the series, I'm thrilled to welcome a phenomenal money relationship coach and online biz bookkeeper, Clarissa Wilson. For all of you entrepreneurial goddesses (and for all of us in our personal finances), Clarissa is flipping the concept of budgeting on its head.  


There's a huge to do list sitting on your desk of things you need to do in your business. You slowly cross things off. 

But one item never seems to get crossed off. It always gets carried over with each to-do list you make:

Creating a budget for your business. 

I know exactly why you don't do it. I've been there where you are before.

A budget is restrictive and doesn't allow for flexibility. It's not fun. And it's not how you want to spend your time. It's also NOT your zone of genius. 

Plus there are all kinds of what-if's around a budget. 

  • What if I don't meet my income goal? 
  • What if I spend more in my business than I budgeted for?
  • What if I don't know what I am going to spend my money on each month in my business?
  • What if....
  • What if....
  • What if....

The list is endless and all kinds of things keep coming up. In the middle of all of it, the budget just doesn't get done. 

BUT, you are a business owner. And you need to plan how you spend your money in your business, so that you can plan how much money you are going to make in your business. 

It's a 2-way street. And you have to plan ahead of time how you are going to spend your money, so you can plan how much you are going to make. 

So, let me introduce you to the spending plan. This is what I use in both my business and my personal life. 

Rather than a "budget," the spending plan allows for flexibility. You just allocate your money based on your categories. 

I ran away from creating a plan with my money when it came to budgeting. But no longer. 

Once I found the spending plan, the whole process became much easier, and I'm sure it will be similar for you, too.

I stopped running from creating a plan for my money.

The beauty of a spending plan is that you have 3-5 categories and you put a percentage on each category. Then, you apply the percentages that work for you to the income that you have and split your money accordingly. You don't have to use my numbers, you can use your own. Or you can use my numbers, as long as they fit for your business. 

For a business spending plan, there are 3 categories: paying yourself, taxes, reinvesting in your business. 

You can split them all evenly if that's what you want. Or you can apply different percentages based on where you are in your business. 


For the taxes category, I always recommend 20-35% allocation. Not everyone allocates money to their taxes from each and every payment they receive in their business, but you really should.

And if you have put money away from every client payment you receive, when it comes time to file your tax return for the year, when you owe money, you'll have money already set aside (or have already paid quarterly business taxes), so you don't have to scramble to be able to come up with a huge tax bill. But you need to find what is a good balance for you with setting this percentage for your business spending plan.

Paying yourself and reinvesting in your business.

This depends on where you are in your business and personal life. The amount you pay yourself should be enough to cover all of your personal expenses each month. Then you also allow money to reinvest in your business, this also includes the money that you need in order to keep your business running smoothly each month (i.e. your monthly memberships, your email provider, website fees, merchant fees, calendar system, basically anything that you need to run your business every day). 

Here are my percentages so you can see how I allocate my business money each month: 20% to taxes, 50-60% to pay myself (depends on the month, because my business is currently paying off my huge student loan debt at the moment), and 20-30% to reinvest in my business. 

Your numbers may not be the same as mine and that's okay. Maybe you are in a plan where you are reinvesting most of your money in your business right now over paying yourself. That's okay. There is nothing wrong with your percentages being different than mine. 

That's why a spending plan is better than a budget. It allows for flexibility and you can easily change your percentages each month based on where you are in your life and business. 

I'd love to know how you apply a spending plan to your business and how much easier this is than a monthly budget in the comments below.

Clarissa Wilson is a money relationship coach and online business bookkeeper for women entrepreneurs. She helps women build a relationship with their money so that they never have to rely on anyone else again for their money. Money is a tool and a source of power in our lives, but as we have been growing up, many women have learned to give away this power to their male counterparts. And now is the perfect time to start taking back this power and let it work for you. Clarissa learned all of this the hard way on her own and now it's your turn to take back your power as well. You can follow her on Instagram, Periscope and Twitter by following @clarissaawilson. 

*The views expressed in this post are those of Clarissa Wilson and not of Kate K. McCarthy or www.katekmccarthy.com.