Personal Finance Tips for Business Owners

Being a business owner means balancing your business’s finances and your personal finances. As well as making sure your business is bringing in enough money, you need to keep your own finances healthy. If you’re not personally doing well financially, it will make it difficult for you to continue running your business. Entrepreneurs can face some unique challenges because they take on a lot of risk, and they don’t have any support from an employer. If you’re trying to run a business while also fulfilling your own financial goals, there are a few key moves that you can make.

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Have an Emergency Fund

An emergency fund is the savings that you can rely on when you have unexpected expenses. Everyone should have one to help cover costs, such as home repairs or medical expenses. It’s even more important for entrepreneurs to have an emergency fund if they rely on income from their business. If your business has a slow month or anything starts to go wrong, you might be unable to pay yourself your usual salary. An emergency fund will help to keep you afloat. Building a fund worth at least three to six months’ expenses will give you a strong safety net.

Be Careful with Credit

It’s important to manage your business credit, but you also have to pay attention to your personal credit. It’s best to stay out of debt if you can and to balance any credit that you do have to make sure you’re not borrowing too much. Keeping your credit utilization ratio below 30% is smart. You should try to maintain a clean and solid credit record, so keep up with any payments and avoid missing any, even if you can only pay the minimum payment. This will help you if you want to secure any long-term debt, such as a mortgage, which can be tricky if you’re a business owner.

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Prepare for Your Future

Many entrepreneurs don’t think enough about their financial future. They might feel they can’t afford to save for the future or simply don’t consider it because they don’t have the benefits they might get from an employer. But by accessing some advice on retirement planning for entrepreneurs, you can start getting set up for your future. You can still be prepared for your future and ensure you will be able to retire, even if you don’t have help from an employer.

Give Yourself a Pay Raise

As your business grows, you can consider whether you can afford to pay yourself more. At certain times, it could be the right moment to give yourself a pay raise. Of course, you don’t want to do this too soon, when it’s also important to have money to invest back into your business. However, as your business grows, make sure that you are rewarding yourself for your hard work too. You deserve to benefit from the growth of your company.

Although you need to spend a lot of time working on your business, don’t forget about your personal finances. It’s important to pay attention to them too.


Financial Planning for Life’s Unexpected Events

Life always brings surprises, some of them good, some of them not so good, and many of them that require some financial input from you. That’s why it’s so important to plan, as best you can, for life’s unexpected events. By preparing now, you can ensure that those tough financial moments are a little easier to deal with when they do arrive…

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Insure for What You Can

These days we have insurance for everything from a broken phone to pet illnesses and even life insurance that will only pay out once we die. If you’re serious about planning for life’s unexpected events, financially at least, it’s a good idea to take out as many insurance policies for as many of the biog issues that are likely to affect you as possible. That way, when the worst happens, you won’t have to worry about the financial side of things at all.

Start an Emergency Fund

Sure, payday loans are available to many people at a push, but when those financial emergencies come around unexpectedly, it’s a never a bad idea to have a pile of money set aside to deal with them. That’s where the humble emergency fund comes in. Basically, an emergency fund is simply an amount of money that you set aside and do not touch until a serious financial emergency comes along – things like job loss, huge vet’s bills or a period of illness. Thus, emergency funds only work when you put money aside regularly and leave it untouched until it is really needed.

Stay Out of Debt

It may not always be possible, but the more you can do to stay out of debt the better Not being in debt means you will have more money available to deal with life’s emergencies and one less thing to deal with. Debt is the source of so much stress that it is worth staying out of it, or if you already have debts, looking at ways to minimise them as soon as possible. If that’s something you are struggling with, there are people who can help you.

Have a Backup Budget

Creating a backup budget, that you can fall back on when your life doesn’t go as expected is a really good idea. It will help you to immediately identify the expenses you can cut back on so that you can free up some much-needed cash and get back on financial track as soon as possible when things get tough. Make that plan now when you’re in a good place and thinking clearly, and you can spring into action right away.

Make a Will

None of us likes to think about dying, but the fact is we will all die one day and when that happens, we don’t want to leave a financial mess behind us. That’s why every adult should make a will as soon as possible. Then, if the worst does happen, those who are left behind will know exactly what is expected of them and where the money will be going.

Plan now and cope better when those unexpected life events show up! 


The Importance of a Rainy Day Fund

What would happen if you lost your job tomorrow? Would you have enough money to cover all of your expenses without running up extreme credit card debt? It is very important to have an emergency fund set aside for life’s unexpected events. There are many reasons why you should have a rainy day fund, and there are ways you can ensure you’re able to set one up that is sufficient for your specific needs. Let’s discuss some of the ways you can manage your money properly so you are able to allocate money to your rainy day fund!

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Losing your job is only one of the many reasons you need to have back up cash. You can also have expensive health or dental issues, or a major car repair. It’s essential that you have money set aside for these occasions. It is recommended that you have at least three to six months worth or income set aside in this fund. If you own a home, a recommended emergency fund of 1% to 3% of the total home value is encouraged to cover any unforeseen repairs which may arise. You can check out this handy calculator to get a more precise amount!

Once you have calculated your monthly expenses, then you need to figure out how will you will actually save up the money to put into your rainy day fund. Take a look at your current budget to see if there are areas where you are spending in excess. If you are able to cut out some excessive spending like dining out, or buying daily coffees, you might be well on your way to meeting your fund’s goal. There are also apps that offer automatic savings which make it very easy to ensure that you are setting aside a portion of each paycheck towards your emergency fund.

There are many other ways which can make your emergency fund goal a reality. You could sell items which you no longer need. The average garage sale could net you around 750 dollars! Getting a side hustle is another great way to bring in extra income. Some common side gigs include, freelance writing, graphic design, virtual assistant, bookkeeping, and accounting services. Check out this article for some more side hustle ideas!


How To Survive The Next Big Economic Meltdown

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It is NOT a matter of IF another economic collapse happens, it is a matter of WHEN and HOW you can prepare for. We don’t mean to be fear-mongers or cynics, but history would suggest the world cannot operate without an economic crash every so often. It could be a political move that sends us spiralling down, perhaps Trump will annoy Putin or vice versa. It could be that the next generation of bankers doesn’t remember the risks they run, get greedy with mortgages again and see another bank too big to fail actually fail. It could be a zombie apocalypse that sets it off.

The point is, any economic collapse will worsen spending habits, poverty, disrupted social order, protests and maybe even violence is inevitable. That is why you should always prepare for the worst. And here is how you can do that.

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Your Finances

This is a huge part of protecting yourself from the turmoil of a crash, and your first move should be saving up an emergency fund of at least $1000. Once you have reached this figure, divert all of your attention to paying off your debt. Once that is done, go back to increasing that emergency pot of yours, and make sure you keep it separate from all of your other accounts. Temptation can be a hard thing to resist. The reason for this is simple; an economic crash sees people lose their jobs and it can be near impossible to land yourself another role until the economy picks up again. If it is a total crash, then you need to protect against the unknown, which will be you not being able to access your account. As such, it is worth having your emergency fund available in cash, cold hard cash, or consider stocking other commodities like gold; anything that can be used to barter.

Clean Water

When an economic crisis happens, a serious one, it is possible that certain supplies may get cut off, such as water and power. Now, it can be hard to store power, unless you have a generator, but you can store water. So make sure you have a stash of drinking water than can be used for drinking, hygiene, and cooking. As a rule of thumb, store a gallon of water for each person, and store it in a clean place.

Food Supply

This is not a grocery shop. No. Storing food for an emergency means buying non-perishable goods. This may seem like a drastic measure to take unless you are in a war zone, but an economic crash can see fuel run out and prices of essentials sky-rocket, so make sure you have enough food to cover you for when times get hard. This should be stuff that doesn’t require refrigeration and has all nutrients you need to sustain a healthy and balanced diet.

Emergency Kit

Once again, in an economic crisis, these items tend to go quickest, so make sure you have a stockpile of specific items that you may need in an emergency. These are things like blankets, multi-use tools, matches, battery-powered radio, cell phone, charger and maps, and torches. You should also make photocopies of any proof of ID and address, as well as have first aid supplies just in case. Know the contact details of family and friends that you may want to contact and, if you have a baby, then make sure there is a supply of nappies, food, and formula.