When you are a small business owner, you’ve got a lot of different financial challenges swinging your way. You not only have to manage the financial aspects of your business, but you also have to look after your personal finances.
Balancing both aspects of your life can be hard, but it’s definitely not an impossible task to manage. Take a moment now to read through a few tips aimed towards helping small business owners better manage their personal finances, and get your money on the right track today.
Get yourself a retirement fund
If you’re going to live life as an entrepreneur, you’re a “take life by the horns” kind of person. You’ll have to have the same attitude towards investing in your retirement, so you’ll have a cozy cushion when you’re done pushing so hard.
As a small business owner, you have a few different options for retirement. You can choose to invest in a Simple IRA, a Solo 401(k), or a Simple 401(k). Each has different implications and setups, so it’s wise to fully research your choices before making a decision.
Always have an emergency fund
As an entrepreneur, your emergency fund serves a dual purpose. If you run a nonprofit organization, it’s even more crucial to make sure your operation always has funds to keep it moving forward.
You have to ensure that your business and your household stay afloat in times of trouble, and it takes a good bit of money to truly provide stability.
Now is the time to start saving, if you haven’t already. You don’t have to put back a significant amount of money everytime you pay yourself, but there should be a consistent flow of cash rolling into the account.
Keep your business and personal finances separated
While it is important to feel like your business is an extension of yourself, you don’t want that belief system in terms of finances. It’s safer to keep your personal and business finances separated.
When tax season arrives, you will be thankful you kept your business and personal finances separated. Placing the full strain of both your business and personal finances on either yourself or your company is always a recipe for disaster.
Setup automated payments whenever possible
Setting up automated payments on recurring expenses is a simple way to save money by not having to pay late fees. Handling a business and regular life grants far too much room for forgetfulness. Let the bills pay themselves.
Create a detailed budget and use it
Above all else, it’s vital that you create a very detailed personal budget. Your business likely has a strict budget to follow, and your personal finances should follow suit.