Transcript: Think like a CFO with Melissa Houston

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Show notes for this Episode

Eowyn Levene 0:00
Welcome to Creatives Do Money. Each week we explore the topics of everyday money management, solo business ownership, and how we’re fueling our creative futures. I’m your host Eowyn Levene, money coach, longtime self employed massage therapist and watermelon enthusiast, and I’m on a mission to help you build the lasting financial stability that frees you up to do your creative work without hustling anxiously for the next dollar.

Eowyn Levene 0:29
Melissa Houston is a chartered professional accountants CPA in Ottawa, Canada, and a business financial coach with over 20 years of professional experience. She enjoys helping entrepreneurs manage both their business and personal finances, through one on one coaching and signature programs. Melissa is passionate about helping women reach their financial goals and is a regular contributor Today we dive into her own painful history with money management and debt. And talk about the major change that allowed her to finally stop the behavior that was getting her into so much trouble. We touch on Melissa’s approach to helping folks with their business finances. We geek out some about budgeting. And we also get into the three primary financial reports you really want to be familiar with in your business in order to have long term success.

Eowyn Levene 1:28
Thank you so much for being here today, Melissa, and welcome.

Melissa Houston 1:32
I’m so glad to be here. I’m so excited about this conversation that we’re about to have, we get to geek out on money.

Eowyn Levene 1:38
I know and you’re officially the first expert here on creatives do money. Of course. Everybody is their own expert in the context of their life and their business. But you have such a wealth of experience that you speak from and I’m yeah, I’m just grateful that you’re here.

Melissa Houston 1:53
Oh, that’s awesome. I feel so flattered. Thank you.

Eowyn Levene 1:57
So we’re gonna dive right in. I want to ask you about a pivotal moment in your life when your relationship to money and finances shifted and changed.

Melissa Houston 2:08
Wow, that is actually a really deep question to start off with. And the reason I’m saying this is because I have pretty much struggled with money management my entire life is kind of ironic, considering that I am a money expert, but I am also human. And when I was growing up, my mother inadvertently taught me She didn’t mean to, but she taught me that that was okay. Because she would let me borrow against my allowance and pare back. So then it became a very ingrained cycle in me. And I didn’t stop the cycle until I met my husband. And when we met and we started dating, and we knew things were getting serious, I was like, okay, you know, we’re gonna have to save for our down payment on our house, we’re gonna have to be really good with money now and stuff. And I always knew how to manage my money. I just was comfortable, too comfortable with with carrying debt. So then we erased all our debt, saved a huge down payment on our house, you know, had children, whatever. And then a couple of years ago, about five years ago now, I started struggling with my money management again. And I ended up going back into debt. And a lot of it I hid from my husband because we we have shared money goals. And I was very, very aware and cautious of how I would deal with money. And we always have no prior relationship about it. But I was struggling with some internal stuff. And instead of dealing with that, I started overspending. So when I finally had to come clean with my husband and let him know, cat out of the bag and gotten all sorts of trouble and had to you know, pay back my debt again and stuff. I went on this really intense journey. And I ended up working with a coach who helps me realize that my money spending was attached to issues I just wasn’t dealing with. So it was very interesting. So I really wanted to give you an honest question or an honest answer to that question. And I hope I didn’t give you too much information.

Eowyn Levene 4:16
No, far from it. I appreciate the honesty, I think it I think it keeps it real, you know, doctors get sick and doctors don’t always act in their best health interest. And that’s true of those of us who work within finance as well. Like you can have all of the head knowledge in the world, but our behavior is about our hearts and our thoughts and our feelings and it’s it’s so relatable and understandable that you struggle despite all of your professional knowledge it makes it makes total sense to me honestly.

Melissa Houston 4:48
Yeah. And I really like to share that story because I find it makes me relatable to my clients. Because when when I help people, there’s a no judgment zone. Right, we can’t be perfect all the time. I mean, the perfection is an illusion. First of all, yeah, like, let’s, let’s get rid of that we’ll shut that. You know, we just have to do our best every day. And sometimes we overspend. Sometimes we will overeat, sometimes we over drink, whatever the case may be, you know, we’re human, we make a mistakes, we get back up and we start again the next day.

Eowyn Levene 5:21
I think having lived through that experience of stumbling, realizing there’s a problem, working hard to fix it and going through your own debt payoff journey more than once means that you can speak and educate the people that you work with, from a real place of genuine knowledge and understanding. And it makes it easier to just not be judgmental.

Melissa Houston 5:44
Exactly. And I always say that money is the most emotionally charged topic that I’ve ever encountered. And everybody that I’ve talked to about their money issues, whether their clients or friends, or whomever, there’s always that element of emotion attached to it. And for me, that’s very real to like, I’m definitely emotional about money. And quite often, you know, and it’s funny, because I just wrote an article about this. I was saying quite often that you hear and you read all this financial advice, but nobody really talks about the emotion that’s attached to the money. And it’s really complicated.

Eowyn Levene 6:26
without feeling pressure to expose yourself too much. Could you say something about? What prompted the spending five years ago? Oh, whatever detail feels good to you?

Melissa Houston 6:40
Yeah, like, for me, it was very confusing, because on the surface, I felt like it was a very happy person. You know, I’m happily married. I’ve been married to my husband for 21 years. And then, you know, we have two great kids, I have no complaints. You know, we’ve got, you know, we’ve got like, a great support system, like life is good. So I just kept thinking, What is wrong with me? So it was like, I was punishing myself, right? Like, why am I acting like this? I’m obviously I’ve got issues, what are my issues? You know, and I spent a good two years trying to uncover what my problem was after having been caught in in this amount of debt with my husband, because my husband looked at me, and he was so disappointed. And like, just seeing that, that face on him, I was like, I cannot do this again. So I took this very, very seriously. And through all the work that I did on myself, when I met my coach, and we started working through the program, and peeling back the layers and finding out what the issue was, I realized, I was in a job that I didn’t enjoy. And I knew that I really knew that. But I kept saying to myself, What are you doing, like, you’ve got a great job, you make great money, you know, you’ve got work life balance, things couldn’t be better. But there was always something inside me that said, you need to go out, you need to do your own thing, you need to help people, you need to do what you love to do. And I just kept suppressing that. And I would, I would eat and I would spend and it would be the cycle. And it would make me feel good for a couple of minutes, or however long the little jolt of joy would last and then I’d be right back in the same spot. So that’s how I would deal with everything. Because I didn’t know how else to deal with it.

Eowyn Levene 8:23
Yeah, yeah. And did your debt payoff process look differently in terms of like the nuts and bolts, in addition to the excavation you did around your emotions and how you’re feeling about your life? Like, did you implement a budget differently than you had previously, when you got out of debt with your husband? Or were there other things that you pulled in? To help yourself?

Melissa Houston 8:45
No, nothing was different. I followed exactly what I teach. And it sucks. I get it. Absolutely. Get it. It sucks, because it took a while to pay all that money back. Yeah. And I was like, how can there not be any joy in my life, and I had to work through that. Because you can definitely have joy in your life without feeling financially restricted. Yeah. So I did everything that I teach people to do. But I was in touch with my emotions. about it. I knew it sucked. I knew I had to do the work. I knew I had to come to terms with the situation I put myself in. I was very verbal about my dissatisfaction with my husband, you know, and he would just be like, Well, too bad. You got yourself there. But yeah, I mean, so it wasn’t the fact that I didn’t know what to do. Yeah. All the emotions that were around it that he didn’t know how to handle.

Eowyn Levene 9:40
Yeah. Yeah, that’s powerful learning that you can survive your emotions.

Melissa Houston 9:46
Absolutely. You know, your emotions, like they come out in so many different ways. And I know a lot of people struggle with it, or we wouldn’t have this high, like household debt levels that we do right now.

Eowyn Levene 9:58
For sure.

Melissa Houston 9:59
Mm hmm.

Eowyn Levene 9:59
Yeah. It’s not just shopping and spending that we use to doll our experience of our emotions that can be food, it can be sex, it can be the internet, social media, whatever. Like, we have all kinds of interesting ways of not feeling our emotions.

Melissa Houston 10:15
And I think especially now, it’s a trying time for dealing with the emotions. I mean, yeah, it’s it’s a totally uncharted territory that we’re on right now, too, which is hard.

Eowyn Levene 10:28
Yeah, no doubt. And isolation is especially challenging for humans who are who are quarantining on their own.

Melissa Houston 10:35
I know, as we’re talking, I’m just thinking, oh, maybe I’m spending too much time on the internet. I know I am covered. Yeah, me too. Like, I think I need to revisit this.

Eowyn Levene 10:47
I’ve had periods that are a lot worse, but sometimes I’ll catch myself just automatically clicking through to Facebook or Instagram. And then I’m like, No turn around!

Melissa Houston 10:55
Oh, yeah, you get suckered in.

Eowyn Levene 10:58
Yeah. So could you tell us some, well, two things – they’re related – one, tell us a bit about that professional experience that I touted at the beginning that you speak from and you work from. And then also a bit about the process that you put yourself through, which is what you teach others?

Melissa Houston 11:15
I am a well, I know in the US, you call them Certified Professional accountants. And in Canada, they’re called chartered professional accountants. Slight different CPAs. I am a professional accountant. And I have over 20 years of experience, I have done everything financial from corporate tax returns to personal tax returns, working with individuals, working with large corporations, I’ve done budgeting, forecasting, variance analysis, I’ve like I’ve done it all. I do internal controls, I could go on, but I won’t hurt you. So I have a really solid understanding of business finance. And I also have a very solid understanding of personal finance, working with a lot of clients with personal tax returns, teaching them how to manage their personal money situations. And I also do volunteer work for my professional association for CPA Canada, where we volunteer, and we go into different offices and classrooms and stuff when we teach financial literacy. So all this combined experience over 20 years, and mine not being super satisfied my employment position. I’m like, what is it that I do? Because, okay, a little backtrack. My first this is actually my second career. My first career was in social work. I wanted to combine what I love doing it just social work and working well. Essentially what it is, is I love working with people, and I love helping people. So then I was like, I’ve got an excellent skill. And I’ve got this deep desire to help people. So I decided to combine them and teach people, mostly entrepreneurs, how to manage their finances. So to me, it was a great marriage. And since I’ve been doing it, I’ve never been happier, I can honestly say that, like I absolutely love helping people.

Eowyn Levene 13:07
And then what was the process that you took yourself through, which is also what you teach others when you got out of debt?

Melissa Houston 13:14
Yes. So what I commonly noticed when I was meeting clients, especially for small to medium business size, they would come in, and they would meet with us, and they would get their tax return, return to them. And we would also give them you know, a whole bunch of great financial tips for them to take away and implement in their business. But I noticed that we would often get blank stares in return, like they had no idea what we were talking about. And this was far too common. So I knew like 10 years ago, I was like, if I’m ever going to open my own business, this is what I want to do. I want to help people so that when they go meet with their accountants, or when they’re dealing with their bookkeepers, they know exactly what they need. Because this is vital information. If you’re a business owner, and you don’t know your finances, it is essentially like driving blindly. You’ve got this business, you invest so much time and energy and love into your business, if you don’t know if it’s profitable, or if you don’t know how many offers you’re offering that are profitable, or you can’t read your financial reports, then you’re in trouble. Because the only thing in life – well not the only thing – but a huge thing in life, especially in business is the most honest you’re going to get is the feedback that your numbers are telling you in your business because numbers don’t lie, you know, so you need to know how to read them and move that needle and if you want to redirect pivot, you know, adjust whatever you want to call it your business into more profit, because quite often I hear too, especially in the online space, is everybody’s talking about these big seven figure revenues, multiple millions, whatever you want to call it, you know, this is all the the revenue that they’re generating, but nobody is talking about how much costs to generate that revenue. So these are things that I really want to educate people because you can be making millions of dollars in your business. But you could also be going bankrupt. And if people don’t understand that they’re in for trouble.

Eowyn Levene 15:14
Yeah, the overemphasis on sales and revenue,

Melissa Houston 15:17
it’s your profit line that matters the most. Whether you’re pulling in, you know, $40,000, if you’re not profitable at that stage, chances are, you’re not going to be able to scale and grow your business to a more profitable business, we have to get that information from your financial reports, learn how to dissect it, and help your business grow, and to be healthy. Because if you can’t afford to pay yourself and your business, that’s a problem. That’s your first red flag. You know, if you’re always running out of cash, and you’re like, I don’t understand, I’m making so many sales, but I have no cash left in my bank account to pay myself big issue. Or even if you’re struggling just to make payments that you need to make. So when you get in a system, that everything is organized, and you understand the flow of it, and you understand the feedback that your financial reports are giving you. And you can make those adjustments, plug those money leaks, or market your more profitable products, whatever it is that you choose to do, when you have the skills to do that. It will help you grow your business. And it’s very similar to the way that you would do your your personal budget as well. Because if you’re spending more money than you’re making, you’re going to be in debt.

Eowyn Levene 16:29
Are there certain areas that you find the entrepreneurs, and especially online entrepreneurs, areas that they tend to overspend that you’ve noticed. Yes. I mean, I can guess one, which is education.

Melissa Houston 16:44
Yeah. And I am guilty of that myself, you know, and it’s hard because they dangle this carrot Invest in me, and I’m going to give you the answers. And I know when I started on, like, I have a very strong business background. But it’s totally different when you’re in the online world. And I’m like, I I’m struggling with this messaging. And this isn’t that. And everybody’s got these shiny objects, they’ve got the promise for me. And I’m not saying that I’ve spent all my money on courses and programs and coaches and stuff. But it is very tempting, and that I see a lot with people, they put all their investments, because so we’re also told that we should be investing in ourselves that if we’re not investing in ourselves that we’re doing ourselves a big disservice. So I find a lot of people get sucked into that. And that’s how the online entrepreneurs are making their money. And, of course, they’re sending us messages that this is the answer, because that’s what they’re selling. And we have to really stop, take a step back and have a look at how much of my investing in myself and I did air quotes there. versus what is a reasonable amount to invest in myself. Because Yeah, you know, you have to track your expenses so that you don’t put yourself in personal bankruptcy as well.

Eowyn Levene 18:02
And plan your spending, like I know you’re a fan of this as well. And

Melissa Houston 18:07
Oh we get to budget talk.

Eowyn Levene 18:09

Melissa Houston 18:13
That was the carrot that you use to get me on the show.

Eowyn Levene 18:17
I’m like I promise we’ll talk about budgeting. But yes, simply planning your spending, like knowing what a sensible amount is to spend in a certain area of your life, and then choosing accordingly and waiting to spend, if it’s not the right time to fork out, you know, six or $800 for something

Melissa Houston 18:36
Exactly. And what I usually do with my clients is I teach them how to break out their spending, like we do budget plans at the year. And whether we’re looking at business budgets or personal budgets, they’re essentially built the same way, where you plan out how much money that you have coming in, and you plan out how many, I mean, especially online, you’ve got like all sorts of software subscriptions that you have to pay. And there’s just a bunch of expenses that you don’t necessarily have to deal with in a brick and mortar or whatever, like however you’ve set up your business, but you plan everything out so that you know exactly how much money is going out the door. And you know how much money you need to bring in in order to just break even. And then you understand how much you can pay yourself and you know if you want to grow your revenue, you know you understand like it’s just it gives you so much more clarity and then it also offers you goals that you can tangibly work towards because you know what you need to do in order to succeed. And then if you monitor your your progress each month, then you know if you’re on the right path or not.

Eowyn Levene 19:43
So tell me how do you work with people who have highly variable income? What do you put help them put in place to manage that?

Melissa Houston 19:50
Very simple. What I do is you take if you’re dealing with it and income level that’s variable, but you know you have a good idea like you know, you’re going to make good I don’t know, let’s just say 70 to $90,000 a year. So you plan your budget according to that. And then you also plan your personal budget to see how much you need to live off of. So then you incorporate that into your business budget and you pay yourself a salary each month, or Hey, you see, you’ve got this set monthly payment, because you know how much you need to live off of, and then all that extra money, you’re in keeping there for rainy day funds. And you’re either going to, you know, have a nice cushy emergency fund, reinvest that money into your business, the way you financial plan is making sure that you’re paying yourself what you need, minimally, to live in your personal budget. And the extra is always the icing on the cake.

Eowyn Levene 20:46
Yeah, it’s definitely key to know your numbers and your personal life. When you work for yourself. That’s really where you start, you have to know what your bare minimum is, you have to know if i mean that combined with know your bottom line and your business, because knowing those two numbers, your minimum expenses and your personal life, plus what’s available to pay yourself in your business tells you whether you need a side hustle to your business, or you need to go make some money on the side.

Melissa Houston 21:13
Yeah, and, and then it also takes the fear out of if your your income fluctuated. So on those months, where you’re like, I know not gonna make as much money. If you’ve got that money in the bank, and you know, that paycheck is coming, then it gives you some assurance. Now, for some people, it can be difficult, like for me, because I just confessed to you, but how much I’d like to spend, I’ve got a spending issue. I just tend to not like when I know I’ve got money in the bank, I tend to hide it. So by hiding it for me, especially for my personal finances, it’s not so hard for my business, but for my personal. I put it in a completely separate bank account, and I don’t see it. It’s not it attached to my daily banking, because I checked my bank balances every morning when I wake up. And if I see that I’ve got money sitting there that I can spend, it will just tempt me. So this savings account is at a different bank. And it’s in a higher interest earning bank account, and it just stays there. So the temptation.

Eowyn Levene 22:14
Yeah, I just did my own air quotes for higher interest, like 1% higher. I mean, interest rates clearly must be different in Canada than they are here. But you’re lucky if you’re getting 0.5% in the States at the moment.

Melissa Houston 22:28
Oh, really? Oh, that low. Yeah.

Eowyn Levene 22:32
Eve n like a CD.

Melissa Houston 22:34
Really, eh? You can my hear my Canadian.We’re usually around for high interest savings accounts around 3%.

Eowyn Levene 22:47
Yeah, so once again, Canada wins.

Melissa Houston 22:52
Yeah, but we also have a foot and a half of snow right now.

Eowyn Levene 22:57
Oh, my goodness.

Melissa Houston 22:59

Eowyn Levene 23:02
When you talk about a business owner understanding their numbers I know there are. So I have some experience with bookkeeping and a general understanding of what we’re talking about. So but walk us through the three main financial documents. So whether a business owner is maintaining their finances themselves, or whether they work with a bookkeeper, there are three sort of primary documents that we’re talking about or reports that we’re talking about. So would you walk us through those? Absolutely.

Melissa Houston 23:29
The first is the balance sheet. And the second most common one is the income statement, or also known as the profit and loss statement. And then the third one is the cash flow statement. When you’re in a business, I’ll be honest, the most common one that you use is the income statement. Your income statement is basically telling you well, essentially, is telling you what your profit level is in your business. And the way you know, that is you’d take your revenue, and you subtract your expenses. And that’s what your net income or your profit would be. But quite often, and I’m just going to use this as a little opportunity to offer some free advice. Quite often business owners forget to budget for their tax bill. Yes. So yes, so that profit number is not what you get to keep, you have to also estimate your taxes. And you can usually get a percentage from your your tax accountant. And we’ll give you an accurate percentage where you can just take like let’s just say for argument’s sake, it’s 20%. Take that 20% put it aside, because that’s not your money. And then the rest of it would be your money.

Eowyn Levene 24:37
Do you recommend putting tax savings aside anytime it hits the bank or once a week or once a month? Or does it just depend on what your revenue looks like?

Melissa Houston 24:46
I recommend every month, you know you like I have a whole system where I teach my clients you know, it’s a four step system where the first thing you do is you understand your financial statements that we just spoke about. The second step is creating your You’re working budget. The third step is monitoring your budget. So then what happens is at the end of the month, let’s just say what we’re in November right now. So let’s say November, at the end of the month, you’re going to have a column that had your November budget numbers. And then you’re going to plug in to the right of that another column where you’ve got your actuals. And then you’re going to look at the variance. But then you’re also while you’re doing because I suggest you do this monthly planning, you take a couple hours, at minimum each month. It’s nice to check in on your business every week financially. But the big job is that the month and then you you know what you’ve earned in that month, and you take that 20% or whatever number it is, and then you put that aside.

Eowyn Levene 25:44
Got it. Can you talk a little bit about the cash flow statement This is so I understand the balance sheet that walks you through, literally the balances and all the different kinds of accounts that you might have assets, liabilities, your literally your bank accounts, like how much cash you have on hand, and then any debt that you’re tracking for your business. So I get the balance sheet, the profit and loss makes sense to me. But I’ve never really understood the cash flow as somebody who is always, you know, some weeks I will have. So this is me talking about my massage practice, not the money coaching, since it’s so new, but I would have weeks where I would have 6000 in income, and then other weeks where it might be 450 in income. And so with, on the average, within the month, I had a more manageable range, but still pretty variable. And so I never really needed to think about that particular document in in the context of my business. So another few just talk a bit more about its function and why it’s important.

Melissa Houston 26:41
Absolutely. And I’ll be completely honest with you, I don’t find it as valuable as the other two statements. Essentially what your statement of cash flow is, it’s going to give, okay, let me backtrack a bit. Because typically, what you do is you keep these three financial statements accurate and up to date. And when you would need all three of these statements is usually for external parties, like you absolutely need your balance sheet and your income statement for your personal financial management within your business. But when you’re going to a bank, or some type of investor, they’ll usually ask for all three of these statements. So your statement of cash flow shows the cash activity, from cash coming in your financing activities, your investing activities, and your operational activities. So financing activities is what you’ve purchased. And like let’s say you financed a piece of equipment or something. So it shows the payments that you have to meet for your investing shows any money that’s coming in and out for your investments, but whatever, just for clarity for people mixed up financing, investing, but investing is when you actually put your money somewhere safe. And then the third one is your operating expenses. So essentially, what your cash flow statement is doing is it shows what’s coming in and out of your bank account for the year. So it’s projecting income and expenses over the year. It has it doesn’t, it actually has very little to do with income and expenses. Okay, it’s your cash. So like, let’s say, like it actually have an excellent diagram, which I wish I could tell.

Eowyn Levene 28:24
If only we could just magic this up

Melissa Houston 28:27
yeah its so visual, and it’s so good.

Eowyn Levene 28:30
well, we could include it in the show notes. If you want to send the image.

Melissa Houston 28:33
Yes, I might do that. Yeah, absolutely. Um, okay, so then it shows you how it can flow in and out. But on a day to day basis, or week to week, however you manage your cash, you’re going to use a system that is similar to like, that’s my fourth step in my in my programs. So you use a similar system that’s well, similar to the statement of cash flow, but it projects it five to six, six weeks ahead of time, instead of like looking at the full year because by the time you see a statement of cash flow, this activity is done and over with and it’s basically useless. It’s just investors want to see that it’s part of how they do their their financial ratios to deem if you’re worthy of investment or not.

Eowyn Levene 29:17
So that sounds like something that’s more relevant generally. I mean, as you said at the beginning of this part of the conversation, that it’s sort of the least important one, but I think it sounds like especially for people who are solopreneurs, or micro business owners or something that this is a less important document because they might not necessarily be working with investors or wanting to share that sort of information.

Melissa Houston 29:40
Exactly. So it’s not to just say that it doesn’t add value because it does show you just have to really understand what it’s telling you and for the large majority of solopreneurs it will not be needed. Yeah, fair enough, but they will need to manage their cash. Yeah. So, management and Statement of Cash Flow are To separate things, yeah.

Eowyn Levene 30:02
Yeah, for me, it was a real revolution to start managing my business on a cash basis in a way that I hadn’t previously. So, when I started to get obsessed with budgeting, I overhauled how I handled my money and my personal life. But I also started to implement the principles in my business life. So previously, all of my recurring charges, like my acuity scheduling, and my liability insurance and these other incidental costs for my massage practice, they would all go on a credit card, which usually got paid off, but not always. And so I slowly got to the point where all of those recurring expenses, in addition to my rent, which had to be paid in cash, but all of the all of the expenses that could have gone to a credit card previously now, a paid for on a cash basis, and it’s life changing.

Melissa Houston 30:51
It is life changing, it’s a you can breathe again, right?

Eowyn Levene 30:54
and it’s not like I make so much more money. I just took myself through a transition process and just do things differently now. Mm hmm.

Melissa Houston 31:03
Yeah. And you would be amazed at how little money you need to become a wealthy person. Wealth lies in the money management.

Eowyn Levene 31:09
Yes, it’s in that gap between the income of the again, the outflow, it’s not, it’s not the income. And it’s really hard. I think, especially if someone’s newer in their business, or if they’ve always only worked on their own, and never really put the time and effort in or never really saw the point of being more rigorous with how they manage their money, they don’t realize how much freedom is implied in getting more friendly with your numbers and planning how you spend your money, which is one of the things that I get really excited about. And I think you do too, because when you teach someone this and they take it seriously, they’re like, oh, why haven’t I been doing this all along? Everything’s so much easier. I mean, yes, you’re spending, I don’t know, three to five hours a month, like crunching your numbers, whatever it’s gonna take. It’s less if you use software, it’s more if you just do your own spreadsheet or something. But it’s not a huge amount of time for the freedom and, and the wealth that it offers you.

Melissa Houston 32:07
Exactly. And I find for the most part for the people that I’ve worked with, it’s the overwhelm at first that stops them from learning all of this, because it really does feel overwhelming if you don’t know. Yeah. How to manage it. Yes, exactly. We’re not taught these skills in school. And most parents don’t talk to their kids about it. Yeah, you know, money is a very hush hush topic. You don’t talk to your friends about it. You may talk about you know, how much something costs, but people don’t talk about how they manage their finances? Definitely.

Eowyn Levene 32:39
So if you were talking to someone who whose version of managing their business finance is, has been look at the bank account a few times a month, and so long as it’s not overdrawn. They’re taking care of things, they’re more or less able to pay their bills, but they feel like there’s more possibility or maybe they’re struggling with some debt, what’s usually the first place that you look at where the people who come to you

Melissa Houston 33:12
for business finances?

Eowyn Levene 33:13

Melissa Houston 33:14
Basically, what happens is they tell me their story. And they get to work right away, because everybody needs to be on the same system. And it sounds like everybody feels like they’ve got individual problems, and they need special attention and a special snowflake syndrome. Yeah. And it’s not to say that, like they’re not justified in how they feel because they do feel alone. They feel like oh, my God, I must be the only person and nobody’s going through the same thing, because nobody talks about it. So then we just immediately get into the program, say, Okay, this is where we’re starting. And we start from step one, and we go all the way to step four. Yeah. And, you know, I and so often my clients will be like, I’m like, you know, approaching them like, Oh, this is gonna be fun. And they’re like, Yeah, I don’t think so.

Eowyn Levene 34:03
Well, yeah.

Melissa Houston 34:05
Yeah, yeah. crazy lady, you’re kind of like my last resort here. So and I really don’t think you’re going to work. So whatever. And then usually, by week three or four, my clients are like, Oh, my God, what a difference. Yeah. You know, and it really is just the overwhelm. I really feel it is because you just need somebody to guide you through all the crap that’s out there. Yeah.

Eowyn Levene 34:29
So you’re a fellow podcaster. Your podcast is called think like a CFO. Can you say just a little bit about what does it mean to you to think like a CFO?

Melissa Houston 34:40
Okay. Yeah, absolutely. Because if you look at the large corporations, every CEO, the chief executive officer has a CFO behind them. And the CEO is definitely a valuable role in the business, but so is the chief financial officer. For most of us, we can’t afford to have a full time CFO, on staff and to help us guide us through. So what I like to do is I like to teach people these skills, so that they know what they’re doing. Like, you know, once they take that eight week investment, and like, it’s one hour a week, for eight weeks, you invest in the program and stuff, and then you’ve got that extra support when you need it, then you can make financial decisions that benefit your company, you’re making informed decisions. So if you don’t understand what your numbers are telling you, and you’re making business decisions, you’re doing the blind level, as I mentioned earlier, like, that’s kind of scary when you think about it. You know, it’s like, if you’re making decisions, you don’t know if it’s gonna be profitable for your business or not. I mean, I’m assuming that you know, every decision you make, you’re making to bring in money. So you know, something’s gonna bring in money. But you don’t know if the expenses are going to exceed that money that it’s bringing in. That’s a big problem. Sure. So everybody needs to have a little bit of CFO in them as a CEO. And then as you grow and scale and you can afford to hire that person or even a virtual CFO, part time, whatever, you can do that. But you can’t, you can’t depend on somebody to tell you what’s going on. You know, there’s plenty of bookkeepers and accountants out there, who they can give you information, but they’re not going to give you the whole picture because they don’t know your business like you do. So you’re doing yourself a huge disservice if you don’t know your money.

Eowyn Levene 36:31
Yeah. So really valuing the numbers and knowing that they have real importance beyond just what you can afford or something like it’s really about using the numbers to help make decisions. I mean, strategic decisions. Yeah, yeah.

Melissa Houston 36:49
Yeah. And, and intimidates people often because they feel like, Oh, well, you know, I’ll never know this. Like, I don’t understand money. I don’t understand numbers. I’m not a math person, whatever. But I believe that everybody can do this. You just need to be shown how.a

Eowyn Levene 37:06
Yeah, for sure. When it comes to the mechanics of it, do you recommend online software or anything else? If someone’s only just working for themselves?

Melissa Houston 37:18
I highly recommend using online software, if you’re going to be doing your own bookkeeping, especially use on online software, because they’re so advanced right now. They help you they guide you along the way. There’s some great programs out there. And it’s so easy. If there are bookkeeping errors. It’s easy enough to correct but on the other hand, bookkeeping is a whole different discussion. I could go on for a while.

Eowyn Levene 37:46
Let’s sum it up at this. You have to stay up to date.

Melissa Houston 37:51
Yeah, if you’re going to do your own bookkeeping, make sure you know what you’re doing.

Eowyn Levene 37:55
Yeah, definitely. And just take it seriously.

Melissa Houston 37:59

Eowyn Levene 38:01
And so is QuickBooks the basic Go-to for you or do you have other software that you like

Melissa Houston 38:06
for me, Absolutely. Absolutely. I am a QuickBooks girl. I have clients who don’t use QuickBooks, and I have a lot but do I have seen other programs? They function just as well. But yeah, that’s my go to.

Eowyn Levene 38:21
Yeah. And I feel like they have in the last five years or so they’ve introduced a couple new products that are really intended for those who just work for themselves or work in a service based industry, which is a really sort of pared down version. I remember QuickBooks desktop, which is how I learned QuickBooks like back in 2007, it was a behemoth. I worked in Peachtree and Sage all these random things that feel like they’re barely relevant anymore. But yeah, hey,

Eowyn Levene 38:55
I would like to ask just a bit more about you and your business and what you are working towards in the future. I’m curious if you have a big money goal right now.

Melissa Houston 39:06
Hmm, I love money. Not gonna lie. I love money. And I and I love helping people make money. And you know, this is just my first year of business. So it’s been a, it’s been a rocky road with the pandemic. So definitely my five year goal is to be in the seven figure range for sales, but I will have a hefty profit. Yeah. I won’t be bragging about my seven figure sale.

Eowyn Levene 39:36
You’ll be bragging about your bottom line.

Melissa Houston 39:38
Yeah, exactly.

Eowyn Levene 39:41
That’s fabulous.

Melissa Houston 39:42
The more people I can reach and help, the happier I am, because I believe, I believe that a lot of the personal finance space has is getting really good coverage. There’s lots of money coaches out there that are doing a really good job of teaching the essential skills but I do don’t see a lot of business coaches who are teaching the actual finance stuff. Yeah, that is super important. As I’ve mentioned throughout this episode, I won’t reiterate yet.

Eowyn Levene 40:12
So what advice do you give to someone who wants to fill in that gap? And they’re just beginning to work on their business finances with more attention? What’s, what’s a one like a one solid piece of advice, you would tell them?

Melissa Houston 40:28
know how much money is coming in, and how much you’re spending? That is the key do not spend more than what you’re making? And if by chance, I mean, I understand in the green years, you know, things are not moving out the green years. What’s the expression mean, just in the green years? Yeah, it’s hard to do that. And don’t listen to everybody who’s telling you to invest in their course invest in their course, because that’s what you need. You need to make money so that you can invest in their course get the money first. Yeah, before you start investing in things and really understand your expenses.

Eowyn Levene 41:06
Yeah. There’s a product at the moment that has been popping up in my Facebook feed as an ad. And part of her copy states that online business is the only area of business where you’re expected to give everything away for free and invest a ton of money in yourself over the course of years, and then start charging for something once you’ve built an audience up. She’s like any, any other business starts with a product like that is the foundation of the product is to sell. And, and it’s something that I’ve been thinking about it’s a good point, you know, because it’s a little bit like the wild west of business to be an online business. And so there’s a lot of noise to sort through. And I do I like that I like that underscoring of, you’ve just got to be practical and not be seduced by all of the expert copy, much of which is manipulative. All of these false deadlines that are created. They’re like, get it now before it’s gone. But it’s anywhere, it’s mine. It’s off deadline, and they’re building up the sense of scarcity, and they’re accurately depicting all the faults that you see in yourself and offering you the solution. There’s a lot of Yeah, it’s manipulative, even though it’s normal. It’s, it’s once you sort of dropped down a layer and look at the standard sales practices online and really wonder there’s just sort of an unconscious process that people tap into, because it’s what they’re taught about how to sell stuff.

Melissa Houston 42:37
And it’s funny that you mentioned that because I’ve had this conversation recently with a couple of other friends of mine that are online entrepreneurs. And it’s very frustrating to a lot of people because it feels so deceptive.

Eowyn Levene 42:49
Yes. Yeah. There’s actually I think I’ve mentioned her on the podcast before, but her name is Kelly deals. And I definitely have in mind to enroll in one of her programs at some point. She does what she calls feminist and justice oriented copywriting, among many other things. But she gives very specific examples. I think it’s one of her lead magnets Actually, this it’s a free email course on what it looks like to have a more conscientious copywriting offering in your work. And I really like how she thinks about things. She’s trying her best not to be manipulative within the context of genuinely selling what she knows can help people. And it’s been thought provoking even just to take that free email course. And yeah, I highly recommend checking out what she does. It’s definitely gonna check that Yeah. It’ll be in the show notes. Her last name is di e LS deals. ls okay. ls Yeah, yeah. So I think there’s there’s a lot to think about and work with. Because at the end of the day, yes, we need to sell things like that is how a business works. And there’s nothing wrong with that. I’m, I’m pro sales, I just am not pro manipulation. And I exactly I want to open up as not as much space as possible for people to make a decision within a conscious and aware and intentional state where they’re like, Yes, I am choosing this thing out of freedom rather than from a sense of lack and rather than from a sense of pressure.

Melissa Houston 44:22
Absolutely. I completely agree.

Eowyn Levene 44:25
I want to finish with my final question. Are you ready?

Melissa Houston 44:28
I’m absolutely ready

Eowyn Levene 44:30
Okay,What is your favorite fruit?

Melissa Houston 44:34
It’s a tough question

Melissa Houston 44:35
is it?

Melissa Houston 44:36
Yeah, no. its Kiwi. Kiwi is my absolute favorite. Yes,

Eowyn Levene 44:42
you are introducing a new fruit to us. We have some Best in Show so far. They’ve been mangoes and lychees. Interestingly enough, so Kiwis new

Melissa Houston 44:49
kiwi is new to you?

Eowyn Levene 44:51
no not new to me new to the podcast. To the to this question. I really like Kiwis, and I think they’re really beautiful. As well the plant is gorgeous. It’s amazing, like curly Willie vine with these beautiful hairy leaves

Melissa Houston 45:07
are really yeah, I’ve never really seen it. Yeah, tree or volume.

Eowyn Levene 45:11
I mean, it’s, have you seen a grapevine where you have kind of like the woody treatment on the bottom and then you’ve got the tiny bit. So it’s a bit like that there’ll be a mature base that the vine grows from each year. Okay, yeah, they grew a lot of them in California. Okay, you’re welcome for this unexpected.

Eowyn Levene 45:34
Let’s finish up with you sharing where people can find you online. And if there’s anything in particular you want people to keep an eye out for?

Melissa Houston 45:41
Absolutely, you can find me at And if you’re interested in getting a free download for the four step program that I was talking about, you’ll be prompted right on the first page, and you can click and sign up for that.

Eowyn Levene 46:07
Special thanks to Michael P. Atkinson, for help with producing this episode and for composing its peaceful music. If you enjoyed listening today, I hope you’ll return and tell your creative friends and colleagues about it and also to take a moment to leave a review wherever it is that you listen. positive reviews make a huge difference in getting the word out about creatives do money. And in the meantime, wishing you all money, business and life success, whatever that means to you.