Steps for Financial Success

Image by Adeolu Eletu on Unsplash

My friends at WeddingPro asked me to share the most common questions that I receive from wedding business owners and the advice that helps them set up their business finances. The thoughts that I shared are not specific to the wedding industry or even to business owners. I'm convinced that individuals will greatly improve their financial position by implementing some basic financial management practices.  Consider these three suggestions:

1. Separate your spending. For self- employed individuals there is a legal requirement to separate your business finances from your personal finances. I encourage different bank accounts for personal spending so that at a glance, you're always aware of how much money you have for a particular purpose. In business, I loosely follow the profit first model. Personally, I have different accounts (and banks) for short-term savings, retirement savings, monthly bills, automobile expenses, and fun money. I fund the accounts based on my priorities. Perhaps you have different priorities, so your separation may look different than mine.
2. Track your spending. The only way that I am able to set realistic expectations and make real time adjustments is because I'm tracking my spending down to the penny. For each bank account, I use specific categories to record where my money is going. Some of the categories are broad like household expenses or gifts, whereas other categories are very specific, like eating out for breakfast, lunch, dinner, late night, drinks, and sweets.
3. Know when your cash flows. I'm sure you know when pay day is. Me too!  I also know the total amount of bills I have set up for automatic payment, when those payments will be deducted from my bank account, and the due dates for manual payments I have to make. These dates and amounts inform the flexibility I have  in executing my spending plan.

If you're a business owner looking for more tips, read the full article on the WeddingPRO site.