Saving money isn’t always easy, but with the right steps and tools to help you, you will be able to fulfil all your personal and professional goals with fiscal responsibility. Below are a few basic ways to stay on top of your finances as a small business owner or an individual with a bad spending habit.
1. Start with a budget
The easiest way to begin taking control of your finances, whether personal or professional, is by creating a budget. This budget will be used as a guide for how you live your life and manage your work goals, allowing you to make necessary improvements without spending more than you make or can afford. Your budget should be created with a goal in mind and should be practical for you to maintain. While it might be ideal to save as much as you can, it isn’t always realistic and could affect the way you live your life or do business in the long run.
2. Make it a habit to jot down your expenses regularly
Whether you have a set budget or not, making the effort to write down everything you spend regularly will save you a lot of confusion throughout your daily life. These notes can be as small as a purchase of pens for your office or as big as a new laptop for your remote working. Either way, knowing exactly what you spend your money on, day in and day out, even if it is outside of your budget, will help you when you are sorting out your invoices or tax paperwork later on in the year.
3. Communicate with your accountant often
As a small business owner, it is key that you are in constant communication with your accountant to ensure that all information regarding your taxes is accurate and up to date. This can be done simply through email correspondence, however, that isn’t always the safest when sharing your confidential financial documents. Opt instead to store your invoices and other business finance documents online in a secure virtual data room where you can control who sees them and for how long. This way your accountant has all the relevant access to your data while still ensuring it remains under your control at all times.
4. Use tech to your advantage
Much like with a virtual data room, as mentioned above, using digital tools to help you manage your finances is both easy and effective for small business owners as well as every day people. Whether it’s for credit card bills or rent payments, you can use automation as an easy way to ensuring you are making all your payments on time and can budget your monthly expenses accordingly so that you always know what’s leaving and entering your accounts.
5. Check your accounts frequently
Furthermore, keeping a close eye on your accounts at all times is as simple yet effective way to stay on top of your finances. It is important to always know where you stand before you make large purchases, pushing you over the edge of your financial capabilities. Use your smartphone banking apps to manage your accounts and always be aware or any unexpected or unauthorized activity that might be going on.
6. Don’t touch your tax money
It can be easy as a small business owner to forget that you have to put away a certain amount of money every year for your taxes. This means that there should be a chunk of your bank account that is never in reach and that your payments and expenses are working around that amount of money rather than incorporating it and costing you more in the long run. Work with your accountant to determine how much you expect to have to pay in taxes for the year and create a budget around that amount so that you never have to touch it while running regular business functions.
7. Keep your financial goals in mind
Whenever you opt to take a significant amount of money out of your account for a big business or personal purchase it is important that you do so with your financial goals always in mind. You need to be aware of where you plan on being at the end of the year and how much you will need to satisfy that lifestyle before you begin spending on items that might not be relevant to your goal.
8. Value yourself through your money
Consider the way you treat your finances as the way that you treat yourself. If you are spending more than you make or on purchases that aren’t necessary for your lifestyle, then it will have a drastic impact on how you live. By putting that much more value on yourself and your way of living, your finances will fall into place because you will realize they are a vital aspect to living a comfortable and fulfilling life.