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Your Money Boundaries

Fees and prices don’t exist in isolation. They connect to a set of behaviors that also contribute mightily to your overall revenue. A prime example of this is my music teacher, Patrick. When I lived in Boston, I cherished my lessons with him. He taught at the New England Conservatory and helped me with both instrumental technique and performance tips for baroque music, his specialty.

Patrick charged $40 a lesson, which was rather low for someone with his credentials. Each lesson was supposed to last an hour. However, his enthusiasm for the music and love of teaching usually carried him well beyond the one-hour mark. As time went on, the fact that he was shortchanging himself bothered me, to the point where I began paying him $50 per lesson instead of $40. Patrick wasn’t rich. He cobbled together a living from his job, his outside teaching of people like me, and performance gigs. Probably he would have agreed that he should really have kept my lessons to an hour or charged more, but he couldn’t bring himself to do it. He had poor money boundaries.

In other professions, consistently going overtime takes the form of allowing clients to add tasks that weren’t part of the original agreement, without raising the fee. This is known as “scope creep.” Do you tolerate late payments? Do you cave whenever someone asks for a discount? Do you put up with cancellations? Do you allow clients to move up agreed-upon deadlines and constantly dump last-minute tasks on you? And do you act like a doormat when any disagreement about money comes up? These behaviors not only stress you out, but they also affect your overall income.

Do you let long-winded customers talk and talk and talk because you need to be endlessly nice? If a client brings up a hard-luck story, do you get sucked into the drama and relent on the terms of your payment agreement? Poor money boundaries include not being straight with the government or with partners about earnings and expenses.

Are you overly generous about access to you, such as allowing phone calls late at night and on weekends, even though this bothers you because people are paying you or might be paying you in the future? If you feel pressured to go above and beyond, while you know that’s not really part of what you’re being paid for, then you may have poor money boundaries.

When it comes to access, my models are famed marketers Dan Kennedy and Perry Marshall, who do not make themselves available on an unpaid basis to prospective clients or non-clients. If you want to take Dan Kennedy out to lunch, he’ll charge you for his time. Perry Marshall ignited a firestorm on his blog when he defended a similar policy. One of his fans called this policy “Greed with a capital G.” More than 400 people jumped in to heatedly add their opinions on the matter, pros, and cons.

In part, Marshall replied: “There are several reasons why I don’t dispense free advice. 1)It would be unfair to those who pay for it, and there are many who do. 2)People almost never act on free advice, especially if it requires them to do something uncomfortable – so what’s the point in dispensing it? 3)If people want free information there are hundreds of pages of free articles and mp3’s on my website, and it’s good stuff.” You have no business judging me, he added. “You do not know who or what I give my money to, and it’s none of your business anyway.”

You may not want to draw the line where Kennedy and Marshall do, but do create business boundaries, communicate them clearly to clients and consistently adhere to them. Otherwise, your prices become a rather meaningless number. And no wonder your overall income feels disappointing. You’re rowing a leaky boat - working hard and also sabotaging yourself.

Now, what about payment and consumption? That’s the topic of the next lesson.

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Written by

Marcia Yudkin