Mike Houlihan, a.k.a Houli, is a friend/client/mentor of mine and he once told me that you got to have a nut if you’re going out on your own. If you know Houli and his gang, he’s a quite a stitch and something like “You got to have a nut” would often be the precursor to a well-planned joke.
This conversation was no joke. We were discussing going out on your own and freelancing. I remember this conversation pretty vividly as his advice felt true but also depressing as I thought about my life without a weekly check.
Houli explained, you have to have a financial plan and a significant savings – a “nut” if you will – before you make that jump from employee to owner.
It appears that actual financial coaches would agree.
I had the pleasure to sit in on one of NextDoor Chicago‘s free financial classes on Freelancers and Entrepreneurs: Build a Solid Financial Foundation. During the class, Coach John walked us through the intricacies of managing your income, expenses, insurance and credit. Probably one of the most eye-opening aspects of freelancing is setting a break-even point. The minimum amount of money you have to make each month to sustain both your personal needs and your business while also contributing to your nut. An emergency fund is a term they use. Regardless of what type of business you are in, there will always be a variety of required and essential expenses to balance on top of your personal needs and emergencies. Budgeting and planning are ways to manage these needs and mitigate risk so you can sleep better at night.
— Next Door Chicago (@nextdoorchicago) August 12, 2016
NextDoor Chicago offers a variety of budgeting classes and financial coaching for free in a non-selling environment. I highly recommend checking out their offerings or even just their free co-working cafe. This is where I hold my monthly WordPress Mentor Office Hours!
I think about that conversation with Houli and “the nut” often as I make daily purchases or when I consider going all in on building up my agency or jumping to a startup full-time. It reminds me I need to make more and spend less.
After our nut conversation, Houli then pitched me one of his Hooliganism books. That’s another lesson; you always have to hustle.