Running a successful small business is no small feat. However, a common mishap that small business owners make is taking their foot off the gas when it comes to their personal finances. We get it, it’s hard to balance the books and keep a hold on personal stuff, after all, running a business does take up the majority of your time and resources. Unfortunately, complacency when it comes to your own bank balance could be detrimental to your business. The good news is that it does not have to be difficult and we’re here to show you how.
If you’re finding it difficult to keep track of your own finances while running a small business, do not worry because you are not alone. But how does it happen? Often, small business owners will spend two years building up their business and focusing on making sure their business is profitable all the while neglecting their personal finances. It could be that you leave little time to manage your own finances or it could be that things are going so well with the business you spend more of your own money.
Another common issue is not building that all important retirement fund. Managing your personal finances ensures that if the absolute worst goes wrong with your company, you have your personal finances in order as a safety net. If you want to take our personal credit on a car or obtain a mortgage, your personal finances need to look good to be approved. But how can you make sure your personal finances are in the best possible shape and keep them that way?
Separate the personal from the business
They always say don’t mix business with pleasure and in this case business owners should avoid mixing their personal and business finances and this is something you should be doing from the get-go. If you haven’t already, make clear definitions between your personal and business finances with separate accounts, this will give you a better vision on what you are spending and where.
Make time for your personal finances
The biggest issue most business owners run into is a lack of time. There aren’t enough hours in the day. However, carving out time to look at your personal finances is just as important as making time to manage your books. If you struggle to put time aside, why not set yourself a dedicated day each month to go through your personal accounts? If you can’t dedicate a full day, take some time once a week.
When you’re in a rut or on the verge of one, it’s not always easy to admit that you need support. Finances services like Crediful can offer invaluable advice on credit, debt and mortgages so you can take control of your finances. You can also work closely with your bookkeeper or accountant to separate your finances and discuss systems and process you can use to get a handle on both personal and business.
Balance the books with online tools
Another barrier business owners find is finding the right tools to support them balancing their finances. Online tools like Mint and Spendee, are really useful to keep an eye on what you’re spending and where. These tools are good for equipping yourself with budget plans and credit score updates so that you can make better decisions with your cash. And since these tools are online, you can use them on the go and check in whenever you have a spare minute or two.
Create a rainy day fund
Having a financial safety net is always a savvy idea in the event that something goes wrong with your personal or business finances. Make sure that wherever you park your money, you’re getting the most for your money by choosing a bank account that can offer you a great deal on interest rates.
Save for the future
Planning on spending your later years in paradise or in a cosy cottage? Making sure you have your retirement fund padded out is the only way you will get there. Nowadays there are multiple ways you can save or invest for your retirement, we recommend finding a good advisor who can explain your options, go through your finances and find the most suitable solution for your current and future situations.