Being a successful entrepreneur is complicated. In addition to dedicating a large part of your time to building your business and making it prosper, you have to achieve a balance between your personal-work life, without neglecting your finances at Christmas and other dates. You know how to do it?
Entrepreneurs tend to focus on the finances of their companies and leave personal ones aside. By doing so you can forget an important payment date, pay charges that you did not make or ignore where your money went. Even if your schedule is very tight with all the things you must do, it is best to give yourself a few minutes of your time each day to check the status of your finances.
Take care of your finances at Christmas
Some tips that you can follow are the following.
1. Create a fund for your expenses
At the start of your company, it is possible that you spend months of “lean years”. If your salary comes from the profit of your business, you must have a plan B for that scenario.
In order not to suffer for money, it is best to have an emergency fund to help you cover your basic expenses (rent, utilities, food, transportation, etc.) during these months.
2. Keep accounts separate
It is important that the money accounts of the startup and the entrepreneur are separate. Although he has been the main investor; the money in each account is for different uses. Absorbing all personal expenses within the company or vice versa will only bring you confusion at tax time.
Make sure you pay yourself a salary that allows you to cover your fixed expenses and then some; and don’t pay your bills from the income your business can generate. The fixed costs of your company must be covered by the financing obtained or the profits that it can generate; but never from your small salary.
In case your business ends up in bankruptcy, your personal finances will be intact.
3. Check the numbers constantly
Making a monthly budget is not enough. You should review it every week (or more) to identify your progress or mistakes. Doing so ensures you don’t miss payments, the amount of cash you have, and you can measure your progress toward your financial goals.
You can apply it with the finances of your company and yours.
4. Record your expenses
Just as in your business you must keep a record of everything you spend and on what, also do it with your personal money. You could be putting some of your money to pay for company things! You can discover unnecessary expenses or purchases that end up with your money.
Plus, it’s the best way to stay in line with your budget. You don’t have to record your expenses in a tedious way. Write them by hand in a special notebook, make an Excel on your computer, or download an app on your phone.
Business Insider made a list of the best personal finance apps. Choose the option that best suits your lifestyle!
5. That your expenses are less than your income
We all have a spending limit per month. An amount that, if we go over, we lose the delicate balance of our money. An entrepreneur must know the limit of his company’s budget and his personal money.
The increase in income of your company should not be a reason for you to spend more. Always remember to keep your business expenses (and yours) below the amount of money coming in. This way you avoid getting into debt.
7. Budget events
It may sound strange, but to have healthy personal finances it is best to know our budget. Just as your company makes a budget for an event in which it can make itself known, you do the same with yours.
Stipulate a maximum amount of money that you can spend on gatherings with friends, family, etc.
8. Don’t forget about your future!
It is far away and there are more important things to attend to (or pay for) now; but still save for your future. You can do it through a bank or a Retirement Fund Administrator (Afore). The National Commission of the Retirement Savings System (Consar) made a list of the best and worst Afores in Mexico.
To find out the options and their respective returns, use this calculator. With it you identify the profits offered by different institutions. This is how you choose the Afore that is closest to what you are looking for.
With information from Coru.