Three Budgets Every Entrepreneur Needs

Money Files

One of the hardest things about running your own business is managing your personal paycheck. In this episode of Money Files, I discuss the three budgets every entrepreneur needs to set to create financial confidence. Having a multi-angled personal paycheck plan removes the stress from revenue fluctuations. Regardless of good or bad months, this plan will keep your mind focused on selling and growing instead of worrying about shifts in cash flow.

Personal and business finances are strongly connected when you own your own business. Knowing how much to pay yourself and when to write that personal check is easier than you think. I encourage you to look at your numbers and establish three budget angles: gold, silver, and bronze.

The silver budget represents what you currently pay yourself. This amount is the midpoint that the gold and bronze levels are based on. Think of the bronze budget as your bare minimum. This figure should cover how much money you need for the essentials. Comparatively, the gold budget is your dream income. That paycheck covers goals a level up from where you are now. 

Establishing three budgets will give you confidence in your finances. Cash flow and paychecks fluctuate when you are your own boss. Some months you make record numbers, while the following months might only bring in half that amount of revenue. Entrepreneurs experience so much stress around worrying about financial unknowns. I will help you create a plan involving gold, silver, and bronze budgets. Together we will deep dive into your personal and business finances and put your money worries to rest.

While listening to this episode, I want to guide you in considering…

[00:07:11] What is the personal paycheck that I need? What do I need to make sure that I am able to pay for and then how does that inform my business goals? 

[00:05:57] That your ability to make money decisions in your business is going to be grounded in you knowing your numbers. And the numbers I want to talk about today are actually going to be on your personal side.

If you’re an entrepreneur ready to stop worrying about shifts in cash flow so that you can stay focused on selling and growing your business, tune in for this week’s episode. 

Are you ready to shift your relationship with money? Apply to work with me, and let’s start working towards your financial goals.


Transcript for “Three Budgets Every Entrepreneur Needs”

Hi and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work every day with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances. Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.

Hello and welcome back to another episode of Money Files. Before we get started today, I want to make sure you know that tomorrow January 18th at 12:30 PM Eastern Standard Time, I am going to be leading a money class called How to Budget Without Restriction. We’re at the beginning of 2023 if you are listening to this episode when it’s actually released, and I’m betting that you have some type of money goal that you’re thinking about and I want to make sure that you’re successful with reaching whatever financial goal you have for yourself. Maybe you said, I want to track all my expenses this year, or I want to make sure that I have a budget that I actually follow. Whatever it is, I’m inviting you to this money class. I’m going to share with you my simple five step process that I use with my clients to help them budget without restriction.

If you’ve listened to enough of my episodes or maybe you don’t know anything about me, you should know that I’m someone who loves to spend money. And so I want to help you enjoy spending money, which I’m sure you already do, enjoy spending money. But I want you to enjoy spending money without the feeling of guilt, shame, or overwhelm that you might currently be experiencing because you’re sitting there thinking like, I’m the six figure earner, I don’t know where my money is going. And at times it can just feel really overwhelming or you just try to evade your finances by not looking at them at all. So join my money class, how to Budget without Restriction. If you go to the show notes, you will see the link to join or you can go So I’m excited to see you tomorrow.

So today what we are going to talk about is the angle that I need all business owners to be paying attention to. So whether you’re a business owner or you are potentially thinking about going into business for yourself, I want to talk to you about the fact that as a business owner your cash flow will fluctuate. Like that is a fact. I’ve been in business for over four years and there are months that I can make $10,000 a month that I can make $40,000 another month that I can make $30,000. But your cash, like my cash flow fluctuates. And if you don’t feel in control of your numbers, your cash flow fluctuating can cause you to abandon actually knowing your numbers. And instead you go and you just ignore your numbers, which isn’t a solution because what you actually want is to know what to do with the money.

You want to feel like you have enough money to pay your bills and your business, you want to feel like you have enough money to invest in your business. You want to feel like you have enough money to pay yourself. And so I understand that your numbers fluctuate from month to month and it might feel harder or it might even feel easier to make decisions. And because of this it can lead to some special circumstances. And so specifically want to look, the angle that I want to look at is the three budgets that every single entrepreneur needs because as you are making money in your business, the reason you’re making money is because you actually want to pay yourself. You want to use the money in your business to fund a lifestyle that you have. 

And so when you are managing fluctuating cash flow, what that can lead to is that you either one, pay yourself erratically or two, you like are paying yourself, but you have this belief that you don’t want to pay yourself too much because you want to play it safe and you want to make sure that you don’t run out of money. So the first thing you’re paying yourself erratically, you might be super focused on your bills in your business being paid. And then you’re also focused on making sure that there’s enough money in your personal bank account and that that’s not too low. So let’s say you have a $10,000 month and your brain will go and scramble to figure out, okay, like let me make sure I pay off my business expenses and then let me find some money to pay myself. But then what happens the next month when you have a $3,000 month? So the amount of money that you are bringing into your business is always different. And so based off of that, you’re paying yourself different amounts of money each month. 

There’s no steady system, there’s no flow there. Then you have the second person who you’re like, Keina, I pay myself every single month, every two weeks I pay myself $3,000. But there’s no real rhyme or reason for how you decided to pay yourself $3,000. It just sounded like a good number. So you went with $3,000. If you want to feel calm about your finances, your business finances, and your personal finances, you want to make sure that you have numbers that feel predictable. And that starts with actually knowing your numbers. In this case when you have cash flow that’s different every single month, and maybe you’re the person who’s paying yourself erratically or maybe you’re the person who you’re like, no, Keina, I pay myself consistently. Here’s the number. Don’t really ask me why I’m paying myself this amount of money each month, but like this is the number I’m paying myself. 

Regardless of which circumstance you fall, I want you to know that your ability to make money decisions in your business is going to be grounded in you knowing your numbers. And the numbers that I want to talk about today are actually going to be on your personal side. So you have your business finances, that’s how much you need to pay for active campaign. It’s how much you need to make sure that you have set aside to pay for Canva. Like those are your business expenses. You’re saving money in your business, you’re paying for taxes in your business. You want to make sure that you can invest in your next coach. Like that’s what’s happening on your business side. But with your cash flow that you get in your business each month, your revenue that you get in your business each month, you’re using that money to pay yourself. And depending on where you are in your business, you may need to pay yourself less or you may need to pay yourself more. But I want you to know as an entrepreneur on your personal side, what do you need?

It’s a question that I’ve had to answer, especially as I shifted from working a full-time job and then shifting into full-time entrepreneurship. It was really important for me to understand what I call like what’s the personal paycheck that I need? What do I need to make sure that I am able to pay for? And then how does that inform my business goals? Like business, finances and personal finances for me are connected. You can’t do one without the other. So as a business owner, because you’re in control of what I’m going to call your personal paycheck, I want you to consider that you need three different paycheck angles or three different budget angles. And so those three different angles are gold, silver, and bronze. So your gold budget is what I kind of think of as your dream paycheck. If you were to level up from where you are now.

So if you were thinking like, oh, I want to make sure that I can get a massage every single week, or I want to make sure that I am able to spend $20,000 a year on travel, like that might be in your gold budget and it probably looks different than where you are right now in your current lifestyle. So it’s important to know that gold budget. Then I think about your silver budget or the silver paycheck. The silver paycheck is like your current lifestyle. And then the third budget is what I would call your bronze or your necessity budget. And like I said earlier, it’s essential to know these three angles because it can help inform your revenue goals, how you want to invest in yourself or how you need to prepare for a shift in cash flow. So you might want to scale your gold budget because you’re consistently like starting to make more money in your business.

You’ve gone from an average of $12,000 a month to $20,000 months. And so you are now thinking about what does it mean if I’m able to pay myself more? How much more do I want to be able to pay myself? And so you can sit in between your silver budget and you can sit in between your gold budget and think about like where you want to land. And you get to do fun things with your numbers to think about what are the things that I’m going to add in that are going to fund my lifestyle? Or you might want to scale to your bronze budget because you’re preparing for a shift in business cash flow. I know that I’ve worked with clients where they’ve had months that have felt inconsistent in their business. So it was really important for them to see like, okay, well here are the necessities that I need to pay for. So in the event that I can’t pay myself $3,000 this paycheck, maybe I can get away with paying myself $1,800 this paycheck because I can see the thing that maybe I’m not going to contribute to on my personal side. 

And so it’s important for you as a business owner to be able to know that you can prepare for that. That’s the thing that’s going to make you feel in control. It’s going to make sure that you make really informed decisions and that you don’t feel like you’re making a decision that feels really overwhelming because if you can manage your cash flow, then you’re actually going to be able to think creatively about how you want to solve for the money issue that you might be experiencing in your business. Or another reason that you might want to use the bronze budget that I was just talking about is that maybe you’re starting out in business. And this was something that I definitely used when I was starting out in business and I had my silver budget. I knew, here’s what I need to pay for, here’s the current budget that I’m like living off of. But then as I thought about going into full-time business for myself, I decided that I wanted to pay myself like a little bit less than what I was making so I could actually transition out of my job quicker. 

Like I was able to look at the things that I was able to shift to make the numbers work, especially as I continue to earn more money in my business. So no matter the circumstance, the goal is for these three budgets to help you fill in control and know your exact next step. So you might be wondering at this point like how do I start thinking about these numbers? So when I work with clients, the first thing I do is help them establish like what is your ideal personal paycheck or your ideal personal budget? So how much do you need to live? What expenses do you need to include that support your life right now? We use this as their silver budget. Okay? So your silver budget is probably going to mirror the budget that you had when you left your nine to five and you would have your regular expenses there that were focused on you traveling. Maybe you were going to CrossFit or you were contributing to your emergency fund, like that’s your silver budget. 

But from your silver budget, what you’re going to be able to do is you are going to be able to create your bronze and your gold budget. So the bronze budget is like I said, what helps you be able to look at your necessity. So the bronze budget is going to be the budget that helps you look at your necessities. In this case, when I was leaving my nine to five, I got clear on what’s the minimum amount I need to pay myself. So I like looked at my necessities. If I needed to, like if I thought about my silver budget versus my bronze budget, I maybe was saving $500 for travel, but like I don’t have to save for travel, right? Like push comes to shove I could, out of saving for travel for three months if it meant me continuing to pay myself consistently. So that wasn’t something that I needed. It was something that I wanted. And so I need to know that that’s like a necessity. Another necessity might be like if I was going and getting a weekly manicure, that’s not necessarily something that I need to do, but it’s a want.

Something that I do need is to make sure that I’m paying my mortgage, I need to make sure that I’m paying my water. Like those are the things that are necessities. So it’s important to identify those in the event that you need to pay yourself less. And I don’t want you to hear this as some like type of scarcity level thinking. It’s really just more so about you being informed. If push comes to shove, worst case scenarios. And the reason it’s important to know your worst case scenario is because in the event that something happens, you won’t be scrambling to figure it out. You’re going to be like, oh, I have a plan for this. There’s nothing wrong here. This is exactly what I can do. Because if money isn’t the thing that you’re worried about, you’re going to be able to sell, you’re going to be able to focus on the numbers in your business.

So that’s your bronze budget and then your gold budget. That’s what I want you to, from your silver budget, you’re going to scale up. What are the things that you want to be able to include as you make more money? The reason I went into business for myself is I knew that there’s. One of the reasons I went into business for myself is like I have an ability to make as much money as I can possibly make,. And so it’s important for me to think about what’s the next version of my budget that I desire to create. I feel like I do this all the time where I’m like, oh, one of the things that I think would be so fun to have is to have a chef. Like I enjoy cooking, but the thing I don’t enjoy is dishes or I don’t enjoy sometimes like the actual, like what do I want to eat tonight?

So I think it’d be really fun to just have someone who would cook for me and it’d be food that I love. It’d be healthy. I would feel really fueled. And so like what would it look like if I wanted to include a chef in my budget or I know one of my goals that I had when I first started my business was to be able to work with a personal trainer. And so like I had it on an index card in my office that the reason that I wanted to create 25K months in my business is because I knew that that level of income would allow me to pay myself enough to like be able to hire a personal trainer. So those are things that I was able to like infuse into my goals and really think about and build because I had this like gold budget if you will, that let me know like which direction I’m moving forward.

And if you heard me say when I make $25,000 a month, like when that becomes like my average that I’m working towards like then I can make a plan to pay myself more. So I was using my gold budget to also think about like crafting my revenue goals and thinking about what I wanted my annual revenue to be. If you’ve listened to my other podcasts on managing fluctuating cash flow, I love a good average. And the reason I love a good average is because it helps me kind of think about what that means for me annually. It helps me logically think about, okay, like, well if I’m averaging 12 K months, then I know that I’m making about $144,000 a year. So what does that mean for me? What happens if I make 20 K months? And because your cash flow in your business isn’t consistent, like even with me wanting to hit 25 K months, some months could have been 30 k, some months could be 12 K, but I can look at the whole year as an average and start to make really intentional plans based off of those numbers.

So as an entrepreneur, as a business owner, whether you are starting a business or you already have a business, I want you to have those three budgets. You’ve also heard me call them personal paychecks. But I want you to know like what is my gold budget? What’s my silver budget and what’s my bronze budget? I would highly suggest that you just sit down with your numbers right now and get really clear on what are the expenses that you have. And like that’s going to be the budget that you use as your silver budget. And I’m assuming that where you are right now, like that’s how much money you’re paying yourself. Or there may be a different circumstance if you are just starting out in business, but just think about, like that’s your silver budget. And then from your silver budget work to create your bronze budget.

So you just know these are my necessities. The same way you would do in a nine to five. Like if you’re like, dang, if I lost my job tomorrow, here’s what I would really want to make sure that I took care of. And then from there, I want you to make sure that you create your gold budget. Like what’s the next level for you as an entrepreneur? What’s the next goal for you in terms of like what you want to be able to pay yourself. So you can think creatively about your goals for this year. 

So thank you so much for tuning in to this podcast episode. I would ask that if you enjoyed listening to this episode, it was helpful, learn some new financial tip. If you are listening on Apple Podcast, if you’ll just click in your player and leave me a review. I would greatly appreciate it. And until next time, have a great week. Thank you so much for listening to Money Files. If you’re ready to take the next step to reach your financial goals, head to and let’s get started.

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