Seven tips for how to manage your money and not let it manage you
Money Management 2.0
By Cheryl Benadie, Managing Director, Whole Person Academy
- Separate your personal finance from your business finance:
Have separate accounts for your business from day one. Funnel all business payments into the designated account and pay all business expenses from there as well. It is too easy to conflate personal and business finances if everything goes into one account.
- Keep personal expenses to a bare minimum:
Your business idea will take longer to develop than you anticipate, and income will start out at a lower level that you might have planned for. You will be paying yourself last, so be prepared to cut down your personal expenses to the bare minimum while you are getting the business off the ground.
- Build an emergency fund for your business:
Try to save up at least three to six months of expenses that will help you keep things afloat when customer payments don’t come in on time or when there are delays in new customers signing up.
- Stay away from debt as much as possible:
It can be tempting to take up a business loan to get you started, or to tide you over during a tough spot, but make sure you evaluate the real cost of the loan over time. Not being bogged down by anxiety around debt repayments will free you up to focus growing your business!
- Develop multiple streams of income:
Don’t be afraid to leverage other skills sets to make money while you are pitching your proposals to new clients. Brainstorm all the ways that you can earn money with your current business products, as well as your range of skills sets. Can you offer your serves as a consultant that will help to build a monthly retainer? If the recent covid19 crisis has taught us anything, it is to never make the mistake again of relying on a single source of income.
- Automate as much as possible:
There are amazing online tools that will help you make money management easier for your business. Explore what’s available and keep tweaking until you find the tools that work for you.
- Keep an eye on the money:
Make sure that you schedule time in your calendar every week or month to revise the budget, review the income pipeline and track expenses. The buck stops with you!