Updated: Aug 2, 2020
We all have bad money habits. It’s the fact of the matter – we are just human. As business owners, unfortunately, we likely learn money facts the hard way majority of the time. However, whereas we’re gaining experience and learning as we go, negative money behaviours already exist that never ought to have shaped in any cases.
From living with a “pay now, worry later” mindset to overindulging in business expenses you don’t really need (simply because you know payday is right around the corner), many of us face to poor money habits.
Here are a couple of beginning points to help you handle those common individual cash propensities that affect you and your business.
Let’s start by identifying some of the bad financial habits that stand between you and financial prowess:
1. Neglecting Your Financial Education
I did not pay enough intention in learning about money until the idea of running my own business came to life. At some point, I picked a copy of Robert T. Kiyosaki’s Rich Dad Poor Dad, and that is what occurred to me: My financial knowledge was a bummer.
In case you are on the lucky side and have already acquired some financial knowledge, you’ve got a head start to the race. Otherwise, your knowledge about money is limited to a straightforward earning/spending pattern, then it’s about time you brushed upon it.
Put trust in your bookkeeper/accountant (if you have one), but remember to keep your finger on the financial pulse of your business too. The goal here is not to end up financial know-all.
Consider it this way: If you want to change your diet, keeping a food diary is a great step. If you want to change the way you handle money, tools can help you easily capture everything going on in one place.
Solution: Take the time to learn bookkeeping. A handful of quality books on money-management will do for starters.
2. Making Your Savings Too Easy to Access:
Ever attempted to save money, but only to tap into your savings when something unpredictable comes up? (Hint: I’m talking about you last-minute farewell party). If this sounds familiar, this is probably another bad money habit you need to kick. Often, even reliably putting a bit of your pay aside doesn't really prevent you from getting the money for out for unimportant reasons.
Solution: If you’re always overspending, it’s clear that your savings account isn’t growing. To kick this money habit, track and categorize all your expenses. Every weekend, sit down with your bank activity statement to order and find where each dollar is going.
3. Indulging in Business Expenses You Don’t Really Need:
Because you maintain a business doesn't mean you have to parade it as it so happens. Many small business owners often adopt not-so-good money habits when they start their businesses. When creating a website for your business—do you really need that expensive website theme or pick a more basic one instead?
Solution: Be straightforward with yourself with regards to business purchases. A good rule of thumb is to practice a cool-down period before you commit your money to a prospective investment. Once you’ve got your habits in check, you can manage your business finances.
So, you should take control of your money.
On the off chance that you neglect to remain over your accounts, you'll never get a legitimate handle on how much work you can or should take on; how much pay you should save for yourself, your bills, and your charges; or in the event that you can even bear to put resources into the apparatuses and gear you have to appropriately support your customers and maintain your business. These issues have a snowball impact, and they put you in stressful situations, hurt your business and lead to big disappointment.
If you need advice or services on any aspect of bookkeeping, accounting and tax, our specialists are ready to help. Get in touch with us for free quote.