This guest post on small business spending is provided by our partner Wave Accounting.

Some small business owners find themselves developing a dangerous habit – using the proceeds from their business to cover ballooning debt generated by their personal expenses. Even if your small business is financially healthy, it can easily suffer if your personal spending is out of control. This situation gets even worse when you’re not tracking personal and business spending separately. Here are five ways small business owners can reduce personal spending:

Understand how you spend

The first step to harnessing your personal spending is to understand how, where, when and why you spend. Before you develop any sort of budget template, characterize your spending behaviour as it is now. Consider connecting an expense tracking software such as Wave Accounting to your bank account and credit card and accurately tracking every transaction for a month. Do this without judgment – the point of this exercise is to create solid data that you can use to identify personal spending triggers and find the black holes in your budget.

Stop using cash

If you don’t know where all your money goes, cash might be the culprit as it’s notoriously hard to track. If this sounds like you, you may be best served to forgo cash altogether. Instead of withdrawing cash to cover expenses, pay for everything using your debit card. Check your records on a regular basis to take advantage of this information.

Move to a weekly budget instead of a monthly budget

Organize your expenses weekly, and create weekly budget targets for your recurring expenses such as groceries, gas, parking, dry cleaning and household items. You can catch overspending much faster in a weekly budget as opposed to a monthly model, and it’s easier to get a better understanding of habits when you’re looking at smaller chunks of time and money.

Budget for real life

Many small business owners develop an austere approach toward their personal spending, believing that they need to completely cut out entertainment expenses. This almost always backfires and results in an unrealistic budget, poor tracking, and unnecessary guilt. Instead, treat entertainment like any other budget item: Give yourself a weekly target, and stick to it.

Don’t give yourself the option to spend

If you still find yourself not sticking to your budget, remove the temptation completely. If you know online shopping is your weakness, remove all of your credit cards from your favorite online sites and delete the bookmarks from both your laptop and your mobile devices. Leave the plastic at home when you leave the house, and make sure you keep your weekly targets visible. Developing these strategies will give your new habits time to take root.

About Wave Accounting

is a free online accounting application designed to liberate small businesses with nine employees or less from accounting tasks. Dedicated to providing solutions for small business owners, Wave also launched Wave Payroll, an easy and affordable online payroll application. Founded in 2010, Wave has already welcomed nearly half a million users worldwide.