4 Personal Finances Management Tips for Entrepreneurs

Posted in Entrepreneurship, Revenue & Profits | 14 comments

As an entrepreneur, managing your personal finances is very important as you’ll be more aware of how your business venture is doing. Being able to make ends meet and keep your finances in order can seem like a challenging and complicated task, especially if you’re just starting up.

Keeping your personal finances healthy ensures that you’ll be able to support your entrepreneurial journey.

Take a look at these concrete guidelines on how to effectively manage your finances both at work and at home.

1.Track expenses

Tracking where your money goes is the first basic step for improving your personal and business finances.

Most start-up entrepreneurs don’t keep track of their income nor record their expenses.

Paying attention to where you are spending your money keeps you in control of your finances. It also gives you a much better insight into your spending habits.

Make it a habit to record expenses in categories such as insurance premiums, birthdays and holidays, vacations, repairs, entertainment, etc. You can use a simple notebook, an account book, or a computer program. Saving those receipts are a good idea as well.

Remember to think before you spend. Don’t go overboard with your expenses—especially when you see income flowing in.

2.Pay yourself

You’re working hard on managing a business, so reward yourself regularly. If your personal finances suffer for the benefit of the business, your business might actually get hurt in the long run.

But when you pay yourself first, you’ll save money that you can use for your personal life or business ventures.

Know your worth and how much you need. As your business profits rise, give yourself an increase as well. Through this, you’ll learn to be disciplined and set priorities. Invest in yourself just like you do with your business.

3.Separate personal funds from business funds

This also helps lessen your personal liability if something negative happens. It keeps you organized when it comes to managing your income, paying taxes and other payments.

To keep your sanity, creating a wall between your personal and company bank accounts is a major key. When your business hits a rough patch, you can remain calm since you still have personal funds left in the bank.

In starting a business, entrepreneurs tend to get their finances intertwined. They use their personal money for business expenses, and their business funds to pay for personal things.

Consider using Intuit’s QuickBooks (http://quickbooks.intuit.com/) for your business and Quicken (http://quicken.intuit.com/) for personal accounts

4.Allocate a budget

As humans, we have a lot to cover financially for our needs and wants. This causes too much stress and too many headaches, so it is really vital to learn how to budget your finances.

Try to cultivate the art of adjusting or moving money within your budget. This means that you have to take care of every necessity before you think of spending money on your wants list!

Preparing a weekly or monthly budget and sticking to it helps resist those temptations that can potentially blow away your funds. Make sure you set aside a budget that will make your personal and business life grow.

Keep in mind that the key to managing your personal finances effectively is the same as managing your business finances: creating financial plans, understanding expenses and cash flows, and maximizing your returns.

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