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How to separate your family finances from business ones

How to separate your family finances from business ones - financial report image

Mixing work and our personal lives never ends up being a good thing in the long-run. Apart from the fear of having your two worlds collide, there’s also the issue of practicality. When setting up a business, it is considered wise to remove all and any traces of your personal life from the mix. This makes it easier down the line when the ol’ tax records are due and even before that. Separating these two makes it easier to track everything on either end and make sure that nothing gets buried in the paperwork.

Make it official

Simple as that, if separation is your goal, make your business official. Choosing what entity to go as is crucial because it affects your finances down the line and legal protection should you ever need it. Because of the gravity of such a step, it is paramount that you run this through your accountant, insurance agent(s) and your legal representative. Two options usually find themselves as a good fit for fresh companies, these are a limited liability company or LLC and an S corp. Both effectively function as pass-through tax entities, this means that taxes aren’t paid on a business level but passed-through to the tax returns of the company holders.

Open a separate account

How to separate your family finances from business ones - business bank account image

When that’s out of the way, the next thing that is recommended for any potential business is to open a separate account. This makes sure that all of your business expenses are separated from your personal ones, making everything transparent and easier to grasp once taxes are due. Another benefit is having the IRS deem your business as valid, as opposed to classifying it as a hobby if you kept everything on personal accounts. The idea of separate accounts can be expanded upon, making the process even smoother – investing in several accounts for the business itself, making each transaction visible in more than one spot.

Use different software

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This essentially ties into the previous idea. If you’re already focusing on separating the two, go the extra mile. It may be a hassle to get used to two different accounting systems, but it will grow into a huge quality of life improvement down the line. Ostracizing your accounts may seem a bit extreme, but it removes any possibility of having errors and mistakes pop up from trying to do your books last minute. Separate software leads to less opportunities for problems to arise and keeps you in good standing which is imperative for a business’ success.

Opt for a business credit card

This goes without saying, a business credit card is your best friend. Every expense, every transaction, every single solitary change in your finances is logged and kept. This may not seem like much, but having actual proof of a transaction is a godsend for anyone who’s had trouble with tracking finances. If you should ever be faced with an audit, these records will help back up your own logs and make the whole thing go a lot smoother. Should your business credit not be established enough to secure a card, work it out, at least try to use on of your personal ones for business to make it easier on yourself.

Consult professionals

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Although mentioned above, it still deserves a segment of its own, consult a professional. No one likes to be the person asking for help, but this is our livelihoods we’re talking about. Seeking out professional help at the beginning is still cheaper than doing something wrong and have your business finances embody the concept of the domino effect. A plethora of companies like Darcy Bookkeeping & Business Services offer free quotes to help you get an idea of where your company’s currently at and where it could go. With a seasoned accountant on board, all of the aforementioned steps get kicked into high gear. Think of it as learning to ride a bike, we all started with training wheels.

Tread carefully

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Even with all of these steps, the road will be difficult. By separating your accounts and keeping them that way, both sides of our lives are given equal opportunity to flourish without impeding the other. Make no mistake, business is all about playing the hand you’re dealt and seizing the opportunities you’re given. We may not be able to predict what’s coming over the horizon, but we sure can prepare for the worst. Just like any venture, a good plan will see us through and that is the point we’re trying to get across – be prepared. http://credit-n.ru/zaymyi-next.html

The Immense Benefits Of Being More Money Conscious Around The Home

There are so many benefits of becoming more money conscious around the home. Sometimes, when we’re simply living our day to day lives, it can be easy to forget that most things we do cost money. Putting the heating on costs money. Running the water costs money. Cooking dinner costs money. Absolutely everything, whether necessary to live (like eating), or for fun (like watching TV) costs money. Being more money conscious around the home doesn’t mean becoming a Scrooge or developing a negative mindset. It simply means being smarter. Here are some of the immense benefits of living this way:

You’ll Be More Friendly To The Environment

Usually, the ways in which we become more money conscious around the home mean we are being more eco-friendly. This really does matter, and many people must start making eco-friendly changes so that we can work towards healthier, more sustainable environment. Don’t you want your grandchildren to grow up in a healthier environment? By doing things like changing your light bulbs to LED bulbs, turning down your thermostat, and being more conscious about turning the tap on, you’ll help the environment. Every little helps!

You’ll Have More Money To Spend On Cool Stuff

When you become more money conscious around the home, you find you have more money to spend on cool stuff. Of course you don’t want to go out and blow all of your cash on gadgets, but you will be able to afford more of the stuff you fancy. The infographic below can give you some great ideas!

Credit to Sunny.co.uk http://credit-n.ru/zaymyi-v-ukraine.html

Family Finance and Family Business: Start Teaching Your Kids to Manage Money Early

family business finance - piggy bank image

Source: unsplash.com

Having a family business is hard on its own since you need to know how to handle family and business as two separate entities as well as how not to let one suffer because of the other. This type of business usually lasts for generations or that’s the plan at least, and there’s nothing more satisfying for a parent than to leave their legacy to their children. But before taking such a big step, parents should prepare their children for this future by teaching them about some facts and aspects of the family business as early as possible.

Running a family business is no different than managing any other business. And all businesses have some basics which need to be mastered, such as managing and budgets, resource allocations and knowing how everything fits together into a successful undertaking. With the intention of helping you achieve just that, we’ve singled out a few hints to help you prepare your children for walking in your shoes one day.

1.      Draft a business and budget plan

family business finance - lady with laptop image

Source: pexels.com

Just like with everything else, having a good plan can help you clarify what comes ahead and how to handle it in time. Every successful business is built on sound planning and financial predictions, the same applies to your family business and its future. Whether you’re old school and decide to use a pen and paper, or technologically savvy and decide to conduct your budgeting electronically, it is very important that you start preparing for the day your children take over the helm. Also, if you’re in any doubt you can always contact a bank or financial advisor to help you crunch those numbers.

1.      Separate business and family, but not quite

It’s very important to be clear and honest with your children from the start about what you expect from them in the future. It is prudent to leave your business problems far away from family matters, although there are some things to which the same principles should apply – money. Teaching your children about the value of money and how to be responsible with it doesn’t need to be separate from teaching them how the financial side of running the business works.

What you do need to separate are the roles. At home you are a family, and at work you are co-workers, and by separating the professional from the personal you’ll be able to convey discipline and ethics without losing your footing on both sides.

2.      Start from the beginning

Every family business is a story which needs to be passed down from generation to generation. Your job as a storyteller is to tell it as simply and interestingly as possible so your successors understand what’s ahead of them and are willing to take their place when the time comes. The latter means you will have to explain to them the rules and responsibilities, structure, management, financial transactions and dealings, as well as the clientele, future plans and the market.

3.      Finances – the backbone of your business

family business finance - computer finances image

Source: pexels.com

If you are the soul, then your finances are the backbone holding it all together. We’ve already mentioned that money and how to handle it responsibly shouldn’t be treated any differently than you do it inside your family. From an early age, your children should know that every penny counts and that it has to be earned and spent responsibly. You can let them work on some summer jobs for the family business, starting from the lowest position so they could connect the effort with the reward. Also, you can ask them to present you their ideas and financial plan on how to realise them and make them profitable.

4.      Representation is also important

There is one other aspect you should also include and that’s marketing. This one might be closer to your children’s interests than you may think since today’s advertising efforts are mostly digital and Internet-based.

family business finance - office desk image

Source: pexels.com

Help them understand that by investing in the presentation of your family business and its brand, they can increase the profit and promote the image. It may seem easy and a money saver to do it by themselves, but entrusting the SEO company to promote your website and hiring design professionals to embellish your image will save them time and resources while providing excellent results. It will also be a good lesson for them to see how allocation of work can be beneficial for the business.

Finally

family business finance - family fun image

Don’t be afraid to talk about money with your children. By teaching them about its value and significance you will inspire them with responsible habits and manner of handling it. Showing them how your family business works from the inside out and the important role financial background and forecasts have in its success will prepare them for ongoing and new activities when they take over. http://credit-n.ru/offers-zaim/ekapusta-besplatniy-zaim.html

Survey reveals the influence of Mums on money habits

Mum Knows Best

Britons’ money habits are most influenced by their mothers

  • 36% of Brits say that their mothers have had the most influence on the way
    they handle their money
  • We are twice as likely to consult Mum than Dad on our daily spending
  • More than half of people say their father took control of their household
    finances when they were growing up

New research from M&S Money reveals that our mothers are the biggest
influences on our financial habits.

M&S Money surveyed 1000 people to find out about how their family has
influenced their finances. The research reveals that 36% say that their mothers
have had the most influence on the way they handle their money, compared to 32%
who say it is their fathers.

Grandparents (3%) and siblings (1%) have little influence while 24% say their
family have no influence over their financial habits at all. It seems we also
follow our own gender as a role model; women are most likely to say it is their
mother that has most affected their financial habits (39%) while men are most
likely to say that it is their father (36%)

When it comes to their daily spending, more than twice the number of people
would consult Mum for her point of view instead of Dad. 22% would ask their
mother about their day to day finances, while just 8% would consult their father
on matters such as shopping or saving. Indeed, 6 in 10 people say they are not
like their fathers at all when it comes to their finances.

It is only when the stakes are high that we turn to our Dads for occasional
advice. When making large financial decisions such as buying a house or a car,
one in five (20%) would turn to their father for advice compared to 11% who
would ask their mothers.

Despite more people saying their Mum has been the biggest influence on their
money habits, more than half (55%) of people say their father took control of
their household finances while they were growing up, while for 40% it was their
mother.

Colin Kersley, Chief Executive of M&S Money, said:

“While it may not always have been our mothers who controlled large financial
decisions and the overall household budget when we were growing up, it seems
they are now the ones who we are most likely to turn to for advice on day to day
matters such as saving and spending.

“Our fathers do still have a clear role in being first point of call for
advice on bigger purchases. It is great that we see the value of both parents in
helping us through the many different financial decisions we face on a daily
basis such as choosing the best home for our hard earned cash.”

Table 1: How our family has influenced our finances

Dad Mum Grandparents Sibling
Took responsibility for household finances 55% 40% 3%
Has most affected my financial habits 32% 36% 5% 1%
Would consult on large financial issue 20% 11% 2% 7%
Would consult on small financial matter 8% 22% 1% 8%
Least likely to take financial advice from 12% 12% 5% 24%

Regional Findings

  • Mums are the biggest financial influencers of all regions except for the
    West Midlands (42%), North West (39%) and South West (29%) where Dad’s are the
    biggest influences.
  • Scotland is the only region where more people say that their mother (51%)
    took responsibility for household finances when they were growing up rather than
    their father (47%).
  • The West Midlands is the only region where people are more likely to say
    they are like their father when it comes to financial matters than they are not
    (52%).
  • Scots are the only people in the UK who are more likely to ask their father
    (14%) than their mother (9%) for advice on their day to day spending.