Tammy Barton is the founder and Director of My Budget, a financial services company dedicated to reducing financial stress in the community.
Barton founded MyBudget in 1999 after witnessing the devastating impact debt can have on people’s lives. The business literally started at her kitchen table, with Tammy showing friends and family how to put a budget together. Bootstrapped from the beginning, MyBudget has continued to grow into a $34-million-a-year business.
We interviewed Tammy last year, with her final answer hinting at more exciting things to come. We wanted to catch up and see what’s changed since then!
It’s been nearly a year since we last spoke, and you were saying you were evolving your product and technology… what new and exciting things have happened at MyBudget in the past 12 months?
A large focus for us this year has been to rapidly build our next-generation of technology, utilising cutting edge technologies ranging from big-data, AI, real-time event-based design patterns and more. I’m very excited to say that the first component will be due for release this quarter.
Along the way, we’ve also built a world-class technology team, which consists of 50 percent females. The team has grown significantly in the last 12 months across a variety of roles including software engineering, business analyst, product development and UX and UI.
Clients expect you to be omnipresent these days, to contact you any time, on any device, in all ways (message, social, phone). Financial stress is also at an all-time high, including household debt levels, mortgage stress, credit card balances, job insecurity, house prices, cost of living pressures and mental load. One thing we identified from our 20-year anniversary survey this year on Australians’ attitudes towards money is that, in 2019, people are much more stressed with the burden, with 85 percent saying they feel life is more expensive, 58 percent saying managing money is more stressful, and 54 percent worrying about money frequently.
Based on those figures, it’s clearer than ever that MyBudget can help improve the financial health of the community and we can continue to enhance how we do this through technology.
How have you stayed ahead of competitors since you founded MyBudget in 1999?
I think it’s about authenticity. I started the company organically when I began offering budgeting advice to friends and family. The business was founded to eliminate financial stress in the community and improve the financial health of the world. This has helped drive all business decisions made and steer our business strategy. Because of this, I’ve always adopted the philosophy of putting clients at the forefront of everything we do.
Another key point of difference is that our support is hands-on. We genuinely care about our clients. Money can be a sensitive issue that many of our clients feel uncomfortable talking about, so having a friendly, trusted voice on the other end of the phone is crucial to nurturing that relationship. By really listening to our clients, understanding their pain points, and knowing what they need (now and also anticipating what they might want in the future), we’re then able to help them solve their problems and deliver on our promise to them. Money management and personal budgeting is more than straight-forward equation; it’s about understanding how money management fits into your life. We provide you with the visibility, structure and support to achieve your financial goals, essentially helping you live your life without having to worry about money.
On a year to year basis, how do you re-evaluate and move forward as a company? At what point do you sit down and think about the future and create action plans?
We have a very structured process for this. Our values, purpose and promise sit at the centre of our strategic planning process. They represent the ‘why’ of the business—why we get out of bed in the morning, why we strive for continuous improvement, why we love what we do.
In practical terms, our strategic plan is broken down into the following headings:
- Core Values
- Core Purpose
- BHAG (Big Hairy Audacious Goal)
- Brand Promise (sometimes called a Customer Value Proposition or Unique Selling Proposition)
- Five-year Key Performance Indicator (KPI) Goals
- Five-year Top Priorities
- One-year KPI Goals
- One-year Top Priorities
- 90-day KPI Goals
- 90-day Top Priorities
- Top Opportunities
- Top Threats
We take the time as an executive group off site once a quarter, where we discuss our KPI goals and top priorities for that period of time. Each year, we look back at the previous 12 months and work out where we can innovate and do better and differently. We set strategic priorities (normally no more than five) for the year and are disciplined at sticking to them.
From there, we develop quarterly actions, which are closely aligned to our long-term goals. Importantly, we ensure these are clearly communicated to the entire team and provide clarity as to what their relationship to them may be.
We also have a very long-term goal (20 year), which we work back into five-year goals. As Benjamin Franklin says, “If you fail to plan, you are planning to fail”.
Did you find cultivating culture at MyBudget a challenge, and how did you manage a positive work culture as you grew?
Our vision and values are the bedrock of our culture. It’s an extension of our core purpose (eliminate financial stress in the community and improve the financial health of the world) and our core values (we care, make a difference and financial responsibility). We use these values as a foundation to make decisions, to recruit people, to lead people, and bring simplicity and clarity to many of our people ‘systems’ within MyBudget.
When you work for a company that really makes a difference in people’s lives the way MyBudget does, it gives our staff meaning and helps them feel fulfilled in their work. This, coupled with giving our employees a voice, respecting them, celebrating and recognising achievement, holding individuals to account, and not burying bad news, keeps us all aligned.
Culture is sometimes described as ‘what happens when no one is looking’. I’m confident that when no one is looking at MyBudget, all our team members are living our purpose.
Being authentic as a leader, along with strong communication and storytelling aligned to our core values, has really helped, too. For example, we share core values stories every month, which are then celebrated via our internal communication channels, and we reward based on the core values stories shared. Our Customer Service superstar Nicole Martin won the Global CX Hero award recently and we shared the news far and wide, celebrating and highlighting her amazing work.
I also maintain a positive work culture by being consistent, authentic, transparent and always listening and learning. I am devoted to MyBudget.
There have been things that we felt were important in building a strong culture that you have to create; they don’t happen organically or on instinct.
An example is diversity and equality. We feel this is so important to our company’s culture, but you need a structure to manage it. At MyBudget, we closely monitor and publish our pay gap, which is currently less than one percent. Ideally, businesses should also be addressing the underlying reasons women are paid less. Organisations need to be educating staff, addressing their workplace policies and adding more female voices at the highest levels.
MyBudget has a gender and diversity committee that oversees mentoring programs, ensures our flexible work policies meet the needs of our employees and work to provide pathways for women to be promoted to management positions fairly and equally. Proudly, MyBudget is one of very few companies globally that has achieved gender parity in our technology team.
Women also make up over 70 percent of our non-management employees. We vastly outperform the industry average for gender mix in management (43 percent females in management and 33 percent female executives) and we interview at least 50-percent women for all management or higher roles. Our aim is to strive for a true 50:50 gender balance at management and executive levels.
Do you find it hard to delegate as MyBudget as after all, it is your own business?
When I started out 20 years ago, I knew I was naturally skilled at the core offering of the business – developing a budget, and becoming financially fit, but I had little experience of management and had to learn how to be a leader. I invested time watching others I admired. I learnt from their stories and styles and read a lot of motivational business books. I now find podcasts to be a wonderfully efficient medium to continue to expand my knowledge and to learn from others’ experiences.
So yes, at first I did find it hard to ‘let go’ and delegate, and that’s a normal reaction. I wanted to make every decision, particularly when it came to clients as they were (and still are) the centre of everything. Our clients’ success equals the success of MyBudget, after all.
Quite quickly, though, I saw the benefits of delegation. I knew I needed to transition from doing to leading and working on the company’s growth and strategy, rather than in it.
I identified my strengths and weaknesses and used delegation to support my weaknesses. I find, if you afford someone respect, accountability and power to make decisions, they usually relish the opportunity. By hiring right and trusting in your team they’ll understand the importance of the task at hand, and take care to do it well.
Last time you mentioned cashflow and managing risk as helping you stay at the top of your game – is this still true for you, and what are your top tips for other businesses to do this well?
Absolutely. A balance sheet is a company’s only absolute truth. Careful financial planning and forecasting is what will allow a business to realise its success. There is no point having a strategy you can’t afford. If financial mapping is not your strong suit, get support from someone you trust to do this well. It’s money well spent.
Here are some of my top tips:
- Start by taking the time to know your financial position.
- Put a budget or financial model together – this is your operating budget.
- Include all your predicted income (based on your previous year’s incomes) – remember to be as specific as possible, i.e. plan it month by month.
- Include operating expenses, depreciation, interest etc.
- What are the KPIs you need to be at your businesses core? E.g. EBITDA / Profit, Sales/Revenue, Gross Margins
Once you have done this, then you can dig into the data:
- Have you got enough money coming in to cover your expenses?
- Do you need to re-adjust your payment terms?
- Do you need to cut back?
- Compare your actuals on at LEAST a month basis to your budget.
- Did you hit your targets?
- Check in quarterly, did you reach your KPI’s and do the things you said you would do?
Having a plan will give you the visibility to make better financial and strategic decisions for your business and your life.
It’s also an easy trap for personal finance to get tangled up with business expenses. Separating the two will make it much easier to make the correct deductions at End of Financial Year and easier to grow your business. Most importantly, it allows you to make clear personal financial decisions and create a plan to reach your financial goals.
Ensure that you pay yourself market rate – most underpay themselves which shows a false profitability. Focus on real profitability. Put your tax in a separate account OR pay it weekly – just set up payments!
Debt, unsurprisingly, is generally not your friend. Lines of credit are like a drug for businesses because it’s too easy to draw on them to solve cash-flow issues, rather than make the hard decisions that lead to profitability. I would suggest that a good rule of thumb would be to have two months of operating expenses in cash, after you have set aside money to pay your tax (assuming no money to pay on line of credit). It’s so important to pay attention to your cashflow
“Revenue is vanity, profit is sanity, and cash flow is king!”
What’s the plan for MyBudget over the next five years?
We’re seeing a growing client base of everyday Australians who are on good salaries, and may not necessarily be struggling day to day, but still need external support to manage their finances. People who simply don’t have the time or inclination to focus on paying their bills and want to pass this responsibility onto someone they trust.
Why go it alone? As we outsource more things in life, I anticipate this client base to grow. It’s like any job that requires a skilled professional – you wouldn’t try and cut your own hair, or draft up a legal document – you’d consult the experts, and I think personal financial management will soon be considered in this way.
We believe that our offering is something that can benefit people all around the world. We are working at pace to develop the next generation of our technology that will assist us in improving the financial health of the world. Ultimately, we want every household in the world to know what their financial goals are and have a roadmap to get there – and how MyBudget can help them get there.