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When it comes to money, it’s always good to know that you’ve got things under control. If you’re someone that works from home, you may find that your personal and your business finances tend to blend a bit. While that’s not always a problem, it can just mean that you have a lot more on your plate to manage and organize. Because you technically now have two times the number of finances to deal with – and that can be tough. But you need to know that it’s not impossible. Maybe you’ve put off working on things because you have no idea where to start? That’s something that so many of us are faced with, so you don’t have to feel bad about it. But you do need to just get started.
If you’re overwhelmed, then it’s time to break things down. Whether you know it or not, it’s actually going to be incredibly easy for you to get a hold on things. But you can’t do it when you’re looking at the issue holistically. Instead, you need to dissect everything down into categories. As you start to work through each area, you’ll find that you finally have things under control. At the same time, you need systems. When you’re able to manage everything with a very organized and systematic approach, you’ll find it super easy to stay on top of it all. So let’s break it all down and help you to do that.
So the first thing that you want to do is ensure that you’re able to work on your income. It’s important that you know how you’re going to make money from home. No matter what you do or the kind of business you’re doing, you need to know how you’re going to generate your income. So think about getting a plan together for pitching or making sales. It’s important for you to have a system for how you’ll work on your sales on a daily or weekly basis.
After your sales, you then need to think about what you’re going to do about keeping track of your invoices. You need to have a process that allows you to create them, send them, record when they’re paid, and also chase them too. Although you can get accounting software to help you, if you’d prefer to do this manually, you can set up your own system on a spreadsheet if you’d be more comfortable with that.
Next, you need to ensure that you are recording your payments. An income tax calculator might be of some help as well. This is going to help you to stay organized for when it’s time to process your taxes. The last thing you want to do is have to get to the point where your taxes are due and you’re trying to track back down invoices that were paid over a year ago. To create a system for how you’re going to record them as they come in.
Diversifying Your Income
From here, it’s often a great idea to think about ways in which you can generate income in different ways. No matter what your business idea is, there will be more than one channel that you can earn an income from. So research different ways to diversify your income and see which you feel comfortable with trying out.
Tracking Your Income
Then, you need to be able to track your income. This isn’t for record purposes, but more for growth purposes. If you’re now aware of how well you’re doing, how can you push forward? Think about the different key performance indicators (KPIs) to track and put measures in place. As you record these, you will then be able to push for more work.
Recording Your Expenses
When it comes to your spending, you’ll want to make sure that you have a great system for recording everything here too. Again, for your taxes, you need to have accurate and up-to-date records. If you’re not sure how best to do this, your accountant can advise you on what expenses should be documented.
As part of that, you’ll want to store your receipts. You may not need them, but you may also find that if the government wants to check your taxes, that you do need them as proof. So it’s always best to store your business receipts in the office or away somewhere in case you need to refer back to them. Saving receipts after making a purchase can also help you to record your expenses accurately too.
Next, you’ll want to ensure that you’re spending efficiently. And this is something that you can do both in your personal financial situation, and with your business financials too. If you tend to be able to do something more efficiently by going all in, then a blended approach will help you. All in all, you’ll just want to ensure that you’re spending smart. You need to make sure that any purchases you make are worthwhile. That way, you’re not wasting money and can save it for the things that count.
Reducing Your Outgoings
As a step on from the previous point, you may also want to bring down your outgoing too. This is definitely important from a personal financial sense. If you have a lot of bills that aren’t overly essential, you may find yourself in a better financial situation if you can reduce them. But you need to think about cutting out the smaller things first, then looking to reduce some of the bigger bills that you may not really be able to cut out altogether.
Being Smart With Your Money
The final part of this section is to ensure that you’re smart when you are spending your money. If you’re using credit cards, then ensure that you have the best rate possible, or that you’re able to get a good benefit. If not, then think about spending options that will provide you with the best savings or benefits, like using coupons or buying in bulk.
Starting To Save
So now that we’re on to the savings section of this money management guide, this first step really is the most simple one of all. You just have to get started. There’s nothing else to it. If you want to have money behind you, you need to save. And that means moving some money into a savings account.
Getting The Best Rate
When it comes to saving, you are going to want to shop around for that great rate. You will always find that you get better rates when you tie your money up for a longer period of time. That’s just how it works. But if you want to keep your money as ‘instant access’ then you need to really shop around to find the best rate that you can get for that.
Setting Savings Goals
From here, you’re then going to want to think about what you’re saving for, and what you’re going to be putting that money away for. Because when you have that aim and a goal to work towards, you’ll have more incentive to actually do it. No matter what that is, you’ll want to get yourself into the habit of being able to move a bit closer to that goal.
Then there’s always investing. As we briefly touched on, you can often get a better return on your money when it's tied up. So this is an incentive for you to think about investing. When you get started out, just take it slow. Don’t think about making rash decisions, just get some money out there and you should find your feet before long.
Focusing On The Long-Term
Finally, when it comes to saving, you should definitely be looking ahead. You need to focus on that long-term goal. Whether it’s to buy a house, retire early, or to travel the world, focusing on that and not your everyday spending can help you make it happen. Otherwise, you may find that you spend more today and you’ll never reach that goal.
When you’ve thought about working through each of the section and working out which you can apply comfortably to your situation, you should find that you’re able to manage your money more efficiently. When you’re looking at the idea of your financial situation holistically, it can seem impossible to keep track on. So that’s why we break it down. And not only into those three main areas but also by business and personal requirements, and then further again by actionable steps that you can measure and keep track of.
Now, you should find that you’re so much more in control of your money and your financial situation. By really honing in on each area or at least the ones that apply to you, you should find that you can nail money management and really grow from where you are today too.