We all have a different relationship with money. From our childhood to education we have instilled certain rules and mannerisms around how we spend our hard earned money! But did you know your personal money habits pose the risk of influencing how you spend your organization’s money? You bet they can! Now, this may not send the alarms blaring if you have a positive relationship with money but if you have certain negative habits you could put your business at risk. Take a look at a few habits which may influence your business spending.
Spending Money Without Tracking
Spending your business’s money without any form of tracking is your accountants worst nightmare. If you suffer from aimless spending in your personal life it is best to put in the actions to change this before it influences your business spending. Don’t bother tracking in your head, this is not accurate and can lead to some major mistakes. Utilizing a cloud financial app is our #1 tip for all business owners. With today’s technology, you can even take pictures of your receipt and have it upload instantaneously to your online vault. You can learn more about these technologies in last week’s blog covering our top tips for receipt tracking, you can read all about it here. Starting this early and staying consistent will save you and your account a lot of headaches down the line.
Constantly Making Late Payments
Paying a bill late every now and then is ok but it’s a slippery slope and can lead to constantly making late payments. If the dreaded late charges aren’t enough to scare you, repeatedly making late payments can eventually impact your credit score. With a lower credit score, you will end up paying higher interest on your loans and may even be unqualified for future loans. It’s best to pay off that bill the moment you receive the email notification. Letting things slip can lead to a buildup of unpaid bills and a major dent in your bank accounts.
Operate Below Your Means
Do you really need that iMac upgrade? In most cases, you don’t. Live below your means and save your business’s money. As business owners, we always need to be prepared for the unexpected. Falling into the pit trap of the latest gadgets and on-trend products can drain your bank accounts fast. By keeping your spending to a minimum you’ll be able to stretch your dollar further. What are our quick tips to keeping spending to a minimum? Try out a co-working space instead of working form an office, or even better move your office home. If you find yourself yearning for that new Mac take a look at your current computer. If it’s running a bit slow it will be much cheaper to take it in for a hardware upgrade than replacing a working device with whatever technology is “on trend”.
At the end of the day, you have to keep your long term goals in mind. Before making a purchase consider if this purchase will bring you closer or push you further away from achieving your goals.