Personal finance tips for business owners

In today’s post, I’m sharing some valuable tips and strategies to help you save money on personal expenses as a business owner.

Becoming a business owner changes your relationship with work, spending, and personal life. Here are some Personal finance tips for business owners. You should approach money management differently, saving and investing your personal funds alongside your business. This can lead to significant savings.

Today, I’ll share some strategies that may not be obvious, but could help you save money.

I’m not an accountant or financial advisor, and this isn’t financial advice. I’ll raise questions you might want to discuss with your own financial advisor or accountant.

The advantages vary depending on your business, location, and lifestyle.

For most people, housing and car expenses are the two biggest monthly costs. These are often dictated by work. However, with a business, you have more flexibility in choosing your work location.

Now let’s explore how you can save money with personal expenses.

My first and biggest tip is to separate your finances from your business and personal finances. This may sound obvious, but it’s crucial.

When setting up your business, open a separate business bank account. All business income and expenses should go into this account, while your salary should go into your personal account.

Maintaining proper financial records isn’t just about keeping things clean; it also changes your mindset. It makes you more conscious of your purchases and their purpose. Consult your accountant if you’re unsure about certain expenses, as some may be tax-deductible.

It’s a common mistake to forget that business expenses should be paid from the business account, not the personal account. Many of these purchases can be tax-deductible through your business.

Investing in bookkeeping is another valuable step to this. A bookkeeper or bookkeeping software ensures that all business expenses are accurately recorded and categorised, providing guidance and support to maintain clean and separate business finances.

This is a personal one but sits behind common sense because it is a logical choice. Let’s talk about holidays. Yes, your holidays are personal expenses. You’re spending money to recharge, have fun, and unwind.

And in many cases, this is actually not an insignificant expense. Between airfare, hotels, food, and all that, this could be thousands of thousands of pounds every single year. A great way to save is to avoid going during peak season.

Moving your holidays by a week or two even a few days can literally save you thousands. Don’t go on holiday when everyone else is. You’re an entrepreneur.

You have the advantage of going when it’s cheaper, when it’s not crowded, when the fairs are dirt cheap, and you can have the city, country, or resort to yourself. So, when you plan your breaks for the year ahead, do your best to go during the lowest seasons possible. Consider going outside of school holidays.

Now, if you have children, I totally understand that this can be a little bit challenging. I have kids too. In my experience, many schools are very accommodating if it’s just a 1,2 or 3 days either side of the school term.

This is a huge money saver, and you have the privilege of doing it because you are in control of your time. This also makes your travels and holidays much more relaxing. It’s not as crowded, less families around causing chaos, less traffic and airport visits are much more relaxed.

My final tip is around emotional spending. You will have heard of it being called Retail Therapy.

Many of us spend money to feel better, have fun, or treat ourselves. We might go shopping just to get some gratification, take a trip or weekend away, or buy a gadget we don’t really need. But here’s my tip: instead of filling your life with retail therapy, try to make work fun.

I’ve found that this is incredibly important. When you make work fun, it means literally throwing parties for your team, playing games, having fun, doing contests, having dinners, and doing retreats. This stuff enriches your life and makes you feel like you love what you do at work.

You enjoy every day, you love hanging out with your colleagues, and you’re having so much fun that you don’t feel the need to fill the void with retail therapy. We spend most of our waking hours at work or working, so if we can make it as fun as possible for ourselves and our team, the more we’re going to enjoy life.

That’s just math. Making work fun is one of the best life hacks, financial hacks, I’ve ever tried. By doing this you can move the majority of your expense from personal into a business expense, check with what you can consume as a business expense by checking with the tax office website or with your accountant.

Again, this is just some ideas for you to explore. Please consult your own financial advisor or accountant. This is not financial advice, but just a few things for you to think about and discuss with your financial expert.

If you’re an ideas person who loves what you do but struggles with numbers and finances, consider seeking help.

Once you get financial assistance, whether it’s a part-time financial advisor, accountant, or hourly support, you’ll feel a sense of relief knowing that you’re taking care of this crucial aspect of your business or life. Neglecting it can lead to unnecessary stress and hinder your progress. If it’s not your forte, don’t hesitate to seek help so it’s taken care of.

That covers everything for today.

Got a burning question? Reach out on our social channels or email me at michael@purpleyak.co.uk

Thank you so much for reading.

Take care.