12 Money Saving Tips For A Business Owner’s Personal Finances
As a business owner, you likely already know a thing or two about finances and the best way to manage them. However, it is essential to remember that your business and personal finances are very different and should be managed in totally different ways for the best financial stability.
For your personal finances, it is important to look at your lifestyle, incomings and outgoings to see how you can improve things. You should also be thinking long-term and looking at how retirement will work and what you need to save to retire comfortably.
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Understand Your Income
This may seem basic, but you will find your personal finances hard to manage unless you know exactly what you have coming into the bank at any time. Just as you should know your business’s income to the last penny, you should keep track of your personal income with as close attention.
Build Up Your Emergency Fund
An emergency fund is crucial for everyone and can help you navigate difficult times, such as an unexpected bill or expense. It is best to have between three and six months saved in your emergency fund to keep you afloat in emergencies. For business owners, the more of an emergency fund you have, the better, as it can be used in a scrape for business purposes if necessary.
Keep On Top Of Things
Running a business is hard work and can easily get in the way of dealing with your personal finances. This is one of the biggest mistakes a business owner could make, as issues in your personal life can often leak through into your performance at work. It is important to regularly look at your personal finances to make sure they’re in good health. Consider all of your outgoings and what they amount to, and ways that you can reduce the amount you’re paying for things like credit cards.
Shop Around For Utilities
One of the biggest mistakes many savers make is not shopping around for vital services and utilities. The deal you currently have may not be the best one for you, and many people put off switching because of the hassle that it can be to do so. You could end up saving significantly, however, and getting even better service than your current provider offers. To begin with, look on price comparison websites, and then contact your current provider to see if they can match or improve on the offers you’ve seen.
Unsubscribe From Services You Don’t Use
In the age of digital streaming and other subscription services, it is easy to end up with many subscriptions which you might not use. One or two won’t break the bank, but if you have multiple subscriptions that you don’t use, this could cost you hundreds of pounds unnecessarily per year. Consider making a list of the subscriptions you have and making a note each time you use them. At the end of a month or two, consider cancelling any that you rarely use or don’t use at all.
Consider A Lease For Your Next Vehicle
Buying the latest car brand new might not make the best financial sense, particularly if you’ll require a loan to buy a car outright. A lease will often offer better terms and is an excellent option for a busy business owner who needs a reliable vehicle. Leasing an electric car could have the dual benefits of giving you the best quality while massively reducing fuelling costs. LV ElectriX has a great article explaining everything you need to know about leasing your next electric vehicle.
Make Use Of A Budgeting App
It can be tough for us to see where all our money goes each month, particularly if we aren’t used to tracking our spending. A budgeting app can help you track what you spend and identify areas for improvement. Things like eating out, going for drinks, shopping for clothes and other expenses can quickly mount up.
That doesn’t mean you have to give up doing all the things you love, but it is still worth having a clear visual of how much you spend on these things each month. Once you can see the biggest spending areas you have, you can take steps to cut back if necessary. This could be by forgoing alcoholic drinks with a meal or limiting the amount you spend on clothing per month.
Take Advantage Of Loyalty Schemes
Many shops and restaurants offer quality loyalty schemes to their customers, which can save you money over time. The important thing is to actually use the scheme if you choose it, but without making unnecessary purchases. Supermarket loyalty schemes are often the most advantageous, with some brands offering discounts on purchases throughout the store, cheaper petrol, or exclusive discounts based on your shopping habits. If you are a big fan of dining out, a loyalty card at your favourite eateries could earn you some free goodies and make your next dinner out even more cost-effective.
Get Advice From A Financial Expert
As with business financials, it can always help to have a professional review your personal finances. They can give you tips on how to improve your financial situation and plan for important future events like a wedding or your retirement. There are many types of financial advisors out there, so it is a good idea to look for someone who has experience with other business owners or specialises in areas that could be most beneficial to you, like retirement or investments.
Look At The Pension Plans For Business Owners
If you are an employer, you will need to set up pension plans for all of your employees. You will also need to start thinking about your own retirement and give yourself plenty of time to do so. This may mean finding a suitable pension plan to help you invest and maximise your pension pot. There are many options available, including those aimed at self-employed people. The earlier you start planning for retirement, the easier it will be, so you should regularly think about this.
Open A High-Interest Savings Account
A high-interest savings account is one of the easiest ways to make money. The more you put into the account, the more you will get out of it, so try to save as much as you are able. You should also shop around to find out what will be the most advantageous savings account to open, as many banks offer welcome deals and other enticements to new savings customers.
Diversify Your Investments
Investing is another crucial part of ensuring you have healthy personal finances. There are many ways to invest, including property investment, buying shares, stocks and bonds, and investing in items with value that can be expected to rise over time. It is a good idea to look at a little of each type of investment and consider getting a professional investment advisor to help you navigate the challenges of investing.
12 Money Saving Tips For A Business Owner’s Personal Finances – To Conclude
For a business owner, having excellent personal financial health is critical. This means that you should make your personal finances just as big of a priority as your business finances. You should look at many ways that you can save and manage your money to make sure that your finances are strong. Regularly reviewing your income and outgoings to ensure maximum efficiency is critical.
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