Budget Tips for the New Year
If you’re a work-at-home mom, you likely have a pretty tight budget as is (unless you’re making money hand-over-fist, in which case, congratulations!). And with holiday spending contributing to a marked decrease in your bankbook, you’ve probably already planned for cutbacks as soon as December rolls into January and you’re back to work. However, there are always ways to minimize expenses and maximize profits when you’re running a small business (and a household). So if you’re looking at making some New Year’s resolutions that will improve your bottom line, here are just a few tips that could help you along the way.
1. Organize. If you don’t have all your ducks in a row, there are probably a few items slipping through the cracks (overdue invoices, late fees on household bills, follow-ups with prospective clients, etc.). All of these little things can quickly add up to a substantial loss of income if you don’t get them under control. So put a system in place to ensure that you are able to stay on top of money coming in and money going out.
2. Separate. One thing that can have a major impact on your budget is a failure to separate your income and expenses into two parts: one for your business and one for your household. By using separate accounts for each you can make sure that you’re not missing out on potential write-offs for your business or confusing funds that should go to one or the other.
3. Balance. Set aside time in your schedule to balance your accounts frequently (once a week is good, once a day is better). Whether you prefer to keep a ledger or you do everything online, you should always be aware of where your money is going so as not to find yourself with a host of overdraft charges (money down the drain).
4. Maximize deductions. Many amongst the self-employed fail to realize all of the deductions they can claim on their taxes. Knowing what to write off (and what not to) can save you a lot when it comes time to pay the piper, as well as help to ensure that you don’t get flagged for an audit down the road. Just remember to save receipts for any business-related expenses (even small stuff like “business dinners”).
5. Consolidate debt. If you’ve taken out loans for your business, racked up expenses on a company card, or otherwise found yourself in debt, then you may be able to cut down on monthly payments by taking out one low-interest bank loan that will allow you to completely pay off the majority of creditors. This could also reduce the total amount you owe.
6. See a financial planner. The best way to get your budget on track is to meet with a financial planner to lay out a comprehensive plan that accounts for the income and expenses for both your household and your business. Most people don’t have the first idea how to go about setting up a workable budget, but by seeking the help of a professional, you can get yourself on track and learn how to make your money work for you.
Jennifer Kardish writes for Purchase Order Finance which helps small businesses find the working capital they need for big business opportunities.
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