Ask a business owner what their revenue target is, and they’ll usually have an answer. Ask them what their financial freedom number is, and most will pause.
It’s a strange gap when you think about it. Business owners can rattle off their monthly revenue, their growth targets, even their competitors’ numbers, but ask how much money they actually need coming in for their life to feel genuinely free, and the answer is often a shrug.
That gap is the subject of this week’s Money First CEO episode, and it’s one of the most practical exercises a business owner can do.
The Number That Disappears
When you first start a business, there’s a very clear number driving you. It’s whatever your household needs to function: rent or mortgage, food, utilities, kids’ expenses, car, insurance. Most business owners know this number instinctively, even if they’ve never written it down. It’s the number that makes them anxious when they’re under it and relieved when they’re over it. Usually, it roughly matches what they used to earn in their old job.
But once a business owner passes that survival number, something shifts. The clear goal disappears, and it gets replaced by something much vaguer: more. More revenue, more clients, more growth. More feels good because it fuels progress. But more isn’t a destination. It’s a treadmill.
This shows up constantly with growing service-based businesses. Owners doing $100,000, $150,000, even $200,000 a month, working long hours and building genuinely impressive businesses, and when you ask if they’re where they want to be financially, the answer is almost always “not yet.” Ask what “enough” would look like, and most have never actually thought about it that way.
That’s the gap a financial freedom number closes. It gives you a specific destination instead of an endless chase, a number you can reverse engineer your business around, that tells you when you’ve made it. Not someone else’s version of making it. Yours.
And here’s the part that tends to surprise people: the number is usually lower than they expect. Financial freedom isn’t about being rich. It’s about having enough: enough to live well, enough to stop worrying, enough to have real choices.
Building Your Number: Three Layers
A financial freedom number is built from three layers: what you need, what you want, and what gives you peace of mind.
Layer One: What You Need
This is your baseline: the non-negotiable cost of your life, not your business. Add up every personal expense that has to be paid regardless of what happens: mortgage or rent, utilities, groceries, insurance, car costs, school fees, phone, internet, and any debt repayments. Don’t inflate it, and don’t include the nice-to-haves. Just the genuine floor.
For most families, this figure sits somewhere between $6,000 and $12,000 a month, depending on where you live and your circumstances. Your number might sit outside that range entirely. The point isn’t to match anyone else’s, it’s to actually know your own. Below this number, life gets stressful. Above it, the essentials are covered.
Layer Two: What You Want
This is where it gets personal, because freedom isn’t only about covering the bills. It’s about living the life you actually want. What would make your current life feel genuinely good? A family holiday twice a year? Dinner out once a week? Extra contributions into super? Being able to say yes to your kids without checking the bank balance first?
Put a dollar figure on each one. Two holidays a year at $5,000 each is roughly $1,000 a month. Dinner out weekly at $150 is $600 a month. Extra super contributions of $500 a month. Add these on top of your baseline, and you’ve got your lifestyle number. It doesn’t need to be extravagant. Financial freedom is about having enough to live well without anxiety, not about being wealthy.
Layer Three: What Gives You Peace of Mind
This is the buffer: the safety net that means if something goes wrong, you’re not scrambling. Two things sit in this layer.
First, a personal emergency fund. How many months of your baseline expenses do you want saved and accessible: three, six, twelve? This isn’t money you touch. It’s money that lets you sleep at night.
Second, ongoing savings or investments beyond super. Is there a goal you’re building toward, a buffer you’re growing, an investment you’re contributing to each month? Add the required monthly contribution here too.
Needs, plus wants, plus peace of mind. That’s your financial freedom number.
A Worked Example
Say your baseline living costs are $9,000 a month. Your lifestyle wants add another $4,000. You want to put $2,000 a month toward savings and investments. Your financial freedom number is $15,000 a month after tax, the amount your business needs to pay you consistently for you to be financially free. Not rich. Free.
For a lot of business owners, that number ends up lower than expected, because we’ve been conditioned to think freedom requires millions. In reality, it usually requires consistency: the right amount arriving predictably, every single month.
Turning Your Number Into a Revenue Target
Knowing your number is only useful once you connect it to what your business actually needs to produce. This is where most business owners stop short. They know what they want to earn, but never link it back to a revenue figure.
Start by accounting for tax. If you need $15,000 after tax, you probably need to pay yourself somewhere around $19,000 to $20,000 before tax, depending on your business structure and marginal rate. Your accountant can help you get the exact figure.
From there, if your owner’s pay allocation sits at, say, 30% of revenue, you can work backwards. $20,000 is 30% of roughly $67,000. That’s your monthly revenue target, not a number pulled from a goal-setting workshop, but one directly connected to the life you want to live.
Check that figure against your current revenue. If you’re already there, you might already be financially free without realising it, simply because you never ran the calculation. If you’re below it, you now know exactly how far you need to go.
Why This Number Changes Everything
Once you know your number, it becomes a filter for every business decision. Should you take on a new client? Does it move you closer to your revenue target? Should you invest in a new tool? Does it help you reach or maintain that target? Should you raise your prices? If your target is $67,000 a month and you’re currently at $50,000, a price increase might get you there faster than chasing more clients.
It can also reframe how big your business actually needs to be. Plenty of business owners are pushing hard toward a million dollars in revenue because it sounds impressive. But if a freedom number is funded by $500,000 in revenue with healthy margins, chasing the extra half a million is a choice, not a necessity. And growth by choice feels very different from growth by pressure.
Your Number Isn’t Fixed
A financial freedom number changes over time, and that’s completely normal. Life shifts: a mortgage gets paid down, kids start or finish school, lifestyle goals evolve, an emergency fund target gets hit and the monthly contribution drops, or a business structure changes. For a lot of business owners, the number actually goes down over time as better systems, debt repayment and a stronger buffer ease the pressure. Revisit it at least once a year, run through the three layers again, and adjust your business targets to match.
The Real Point of the Exercise
This isn’t only about earning more. Sometimes the exercise reveals you need less than you thought, and that alone can take real pressure off your business, your hours and yourself.
It’s also a reminder that a bigger business isn’t automatically a freer one. A business doing $2 million a year with higher overheads, more complexity and an owner working 80 hours a week can be far less free than one doing $500,000 with lean costs, strong margins and an owner working four days a week with six weeks of holidays. Which one is more successful depends entirely on how you define success. If success is revenue, the bigger business wins. If success is freedom, the smaller one does.
Building Toward Something That Means Something
A Money First CEO doesn’t just build a profitable business. They build a business that funds the life they actually want. That starts with knowing the number that proves it.
Your financial freedom number is the amount you need each month to cover what you need, fund what you want and build your peace of mind. It’s personal, it’s specific, and it’s probably lower than you think. Once you know it, reverse engineer your business around it: work out the revenue required to pay you that amount consistently, set that as your target, and build your pricing, margins and allocations around it. Then revisit it once a year, because your life will keep changing, and your business should change with it.
This week, set aside 20 minutes. Work out your three layers: what you need, what you want, and what gives you peace of mind, and add them up. Then check what you’re currently paying yourself and ask honestly whether you’re on track.
If having clear visibility over your numbers feels like the missing piece, that’s exactly what Blu Bookkeepers’ Financial Calm System is built for, helping service-based business owners move from financial uncertainty to the clarity and confidence of becoming a Money First CEO.
