Don’t ignore your personal finances when setting up a business

Being your own boss: it’s something many of us dream about, but few of us actually go ahead and do. Not many people appreciate the time, effort and financial strain that can be involved.

If you’re going to make the leap and start up your own business – whether it’s as a freelancer working from a home office or a larger venture – it pays to keep a very close eye on your personal finances. When you’re in charge of your own salary, your business’ finances are (pretty much) your finances – and unless you keep a close eye on the two, you could easily end up struggling.

Keeping to a budget

Careful budgeting should be at the heart of the finances of any individual or business. It’s important to make sure all your costs are covered each month before you decide how much you can afford to spend on non-essentials for yourself.

Putting together a personal budget is simple: add up your monthly outgoings and subtract the total from your monthly earnings. Then make sure you put enough money for your outgoings to one side at the start of the month, leaving you with an amount that you know is safe to spend.

Maintaining your ‘safety net’

Having some money put aside for an emergency is important for anyone, but if you are managing a business then it could be even more important. Your income is likely to be a lot less stable than if you were working for a fixed salary, so a good savings pot could come in very handy when your finances are low.

You’ll have to be clever about how you save. If you have a good month when earnings are higher than usual, make sure you put a good amount of this aside for months when your earnings aren’t quite so high.

Organising your debt

A lot of businesses rely on some kind of debt from time to time, and you may have other debts to think about too – such as your mortgage or credit card repayments. Learn more about BranchRight.com to get an opportunity to provide a healthy and rewarding financial future for yourself and your family. Keeping on top of these repayments and working them into your budget is very important, because if you don’t organise your debts in the right way you could end up paying a lot of interest – or worse still, unable to keep up with your payments.

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