6 Personal Money Management Tips for Small Business Owners

As a small business owner, you know that managing your expenses is essential. Check out these six personal money management tips that you can put into action today.

As a small business owner, you know that managing your expenses is essential – every dollar you save is one more you can put toward the bottom line. If you don’t treat your personal finances like a business too, though, you could bring a host of problems on yourself. Check out these six personal money management tips that small business owners can put into action today.

1. Budget Your Personal Finances
Set up an Excel spreadsheet or use a free online resource like Mint to create a budget. List out all your monthly expenses, weigh them against your income, and set about getting your spending under what you’re bringing in.

2. Eliminate Credit Card Debt
Long-term credit card debt is the nemesis of many budgets. Total up all your balances, achieve a budget surplus through your cuts, and pay them down until they’re gone for good. Whether it takes you three months or three years, making an impact and sticking to it means moving in a positive direction.

3. Take Advantage of Coupons and Deals
Use grocery coupons, both from the Sunday paper and mobile apps like Grocery Pal and Saving Star. Check out websites like SlickDeals and FatWallet for deals on general purchases. Just make sure you truly need an item before you pull the trigger. If it’s for a food product you don’t normally eat or an electronic upgrade you don’t need, keep your money in your wallet.

4. Shop Online
Many retailer websites offer better pricing than they do in-store, so go online before heading out. Sign up for email newsletter updates to keep abreast of offers and cross-check prices for any purchase you’re considering on eBay or Amazon.

5. Cut Back on Personal Purchases
Avoid that fancy dinner, skip the upgrades on your TV and mobile device, and spend your vacation time at home. Your current wardrobe ought to serve you perfectly well, too. Forget about keeping up with the Joneses and leave the plastic in your pocket.

6. Automate Retirement Savings
Even though you probably don’t have access to a 401k plan, that doesn’t mean you can’t automate contributions to your IRA. Have your bank direct a preset amount to your retirement accounts, preferably at the beginning of each month. By getting your savings out of the way first, you can spend with a lot more freedom.

If you saved $1,000 on a business expense you would likely put it toward whatever area of your venture needed the most help – marketing or staffing, for example. Take the same approach with your personal savings. Invest them in your emergency fund if you have less than six months’ worth of living expenses, or direct them to a college fund for the kids. If those are not issues, boost your retirement investments and you just might be able to hang it up early. Managing your personal finances as a small business owner is important, but capitalizing on the fruit of those efforts is even better.

What ways can you think of for small business owners to better manage their money?

Image via Flickr

Top 7 Reasons to Keep a Separate Bank Account for Business Funds

You’ve probably heard that it’s important to keep your personal and business finances separate. Here are seven reasons why, courtesy of our friends at GoDaddy Online Bookkeeping.

This post is brought to you by GoDaddy Online Bookkeeping, the simplest way to manage your small business finances online. Sign up today for a less taxing tax time!

When you first started your business, especially if it began as a side gig, you probably just used your personal bank account to manage your income and expenses. Somewhere down the line, though, you have to make the choice to open a business account or stick with your personal account. We’re going to go out on a limb and say you should definitely keep your business and personal finances separate.

Why? Let’s take a look at 7 reasons why you want to consider it.

1. Deductions

Are taxes coming up and you want to reduce your tax obligations by claiming deductions? You can do that even if you use your personal bank account, sure, but it’s much easier to track your business expenses when they all come out of the same funding source. This prevents you from confusing the time you bought printer paper at your local big box store from all the other times you bought groceries there!

2. Taxes in General

Speaking of taxes, tax time is already a mess if you keep everything separate. When your personal and business finances are mixed, it’s going to be that much worse. Going through simple transactions becomes that much tougher, especially when the amount of income you deposited doesn’t add up to the amount of income on the 1099’s your clients sent you.

3. Professionalism

You’re trying to establish yourself as a real, professional business. The difference between a client or customer writing a check out to “Penny Smith” versus “Iowa’s Best Coffee” is huge. It sets a precedent for both the public and for you. Having a business account lets you maintain the level of professionalism you want.

4. “Hobby Business”

While the IRS generally doesn’t care if you consider your business a hobby or not (as long as you’re paying taxes on your income), they do care if you’re making deductions on something they don’t see as a “real” business. You must show a profit in three years out of five so you’re not considered a “hobby business.” It’s much easier to prove this 3 of 5 rule if you have a business account.

5. Mental Health

If you’re taking your business seriously, you want it to run as smoothly as possible. This includes your finances and maintaining a healthy growth pattern. When mixing your personal and business finances, you run the risk of getting an inaccurate view of your company. This can cause strain on not only the business but your mental health.

6. Reports

Growing your business also involves running reports to see where you truly stand. GoDadddy Online Bookkeeping automatically pulls in your business’s income and spending and creates reports like your “Profit & Loss or “Top Vendors.” Mixing business and personal income will confuse these reports and keep you from seeing a clear snapshot of your business’s financial health.

7. Incorporation

Thinking of incorporating your business? Then you’re going to have to keep personal and business finances separate. No matter if it’s a corporation, a partnership or incorporated sole proprietorship, the IRS will require you to separate the two worlds. If this is ever going to be something you do in the future, you might as well start it now. It will help ease the process going forward and prevent any big issues that might pop up during the transition.

Do you keep your business and personal finances separate? What are your tips to maintaining the separation?

Which small business credit card is best for your biz?

One of the most important choices you’ll make as a business owner is which small business credit card to use. In this article, we review four great options and make a recommendation about the best credit card for your business needs.

Finding an awesome virtual assistant, switching your email service provider, scanning your receipts, keeping up with social media… Let’s face it, as a small business owner, you have puh-lenty on your plate without having to scour the Internet trying to find the best small business credit card.

That’s why we’ve done the heavy lifting for you. First, we thought about what small business owners need most in a credit card, and came up with the following criteria:

  • Flexible spending: You have business expenses that need to be taken care of today, not three months from now. You need a card that offers you a generous credit line for emergencies and the regular costs of running your business.
  • Rewards: A good small business credit card should have a stellar rewards program that offers you points every time you spend.
  • Perks: In addition to rewards, we wanted to see additional perks such as the ability to secure credit cards for your employees, 0% introductory APR, no annual fees, etc.

Next, we sifted through hundreds of small business credit cards in order to weed out the duds and present you with the studs. After a lot of blood, sweat, and tears (okay, there wasn’t any blood), here are our top four candidates for the best small business credit cards out there:

AmEx SimplyCash

Our favorite thing about AmEx SimplyCash for small business? You get 3% cash back on the category of your choice from a list of select categories. You can choose the category that works best for your business to ensure you maximize your cash back. Categories you can choose from include U.S. restaurants, U.S. gas stations and shipping in the U.S.

Want even more cash back? Lucky for you, SimplyCash also gives you 5% cash back at U.S. office supplies stores and on wireless telephone services through U.S. service providers.

Another great perk is that you’re automatically entitled to 24/7 service and support through dedicated business consultants to help you solve the specific problems your business is facing. You’ll also receive other great benefits, like access to purchase protection, extended warranty and more.

You might be wondering, “How could it get any better?” Well, on top of all of that, SimplyCash has no annual fee and 0% APR for nine months. Pretty awesome, right?

Terms and restrictions apply.

AmEx Blue for Business

There are serious benefits to using an AmEx Blue for Business card. Stay with AmEx Blue for a year and receive an “anniversary bonus” in the form of extra rewards points, which will be the equivalent of 30% of qualified purchases.

AmEx Blue gives you the flexibility to distribute your points to your employees, clients, or any other area of your business that needs a little TLC.

AmEx Blue for Business also offers an introductory rate of 0% APR for 9 months (like SimplyCash). After this period, Blue for Business offers an APR of 11.24% – 19.24% variable.

Terms and restrictions apply.

Chase Ink Cash Business Card

This card gives you $200 cash back when you spend $3,000 in the first 3 months after opening the card. It’s not as high as AmEx SimplyCash, but Chase Ink Chase offers 0% introductory APR for 12 months, regardless of your credit score. After that, you’re looking at a 13.24% APR that will vary with the prime rate.

So what about rewards? This card will give you 5% cash back on the first $25,000 you spend on office supplies and office utilities like internet, cable and phone services.

You’ll also get 2% cash back on restaurant purchases and gas (up to $25,000). Once you’ve spent $25,000 in these areas, you’ll continue to receive 1% cash back, and all other purchases in other categories will also receive 1% cash back.

Because the introductory APR and ongoing interest rate are not based on credit worthiness, this could be a great business card choice for small business owners with less than perfect credit.

Terms and restrictions apply.

Capital One Spark Cash for Business

What if you don’t want to worry about what you’re spending based on categories like office supplies, gas and so on?

Then Capital One Spark Cash is the small business credit card for you. This is a great introductory card for new business owners. It doesn’t offer the big introductory cash back bonuses of the other cards ($100 vs. $250), but it doesn’t require you spend as much either ($1,000 in the first 3 months instead of $3,000).

The best feature of this card is its “rewards across the board” promise. Instead of earning 5% cash back on some purchases and 1% on others, you simply earn 2% cash back on all purchases, all the time. There are no spending limits, either – the 2% reward stays in place no matter how much you spend, and what you spend it on.

There are two drawbacks to this card when compared with the others: no 0% introductory rate (you’ll pay between 13.9% and 20.9% based on your credit), and there is an annual fee of $59 (although it’s waived during the first year).

Terms and restrictions apply.

Our Recommendation

Choosing the best card for your small business is a personal choice, and depends a lot on the type of small business you’re running, how much you spend each month, and what types of rewards program would benefit you most.

After reviewing the top four cards, we think AmEx SimplyCash is the best small business credit card for the majority of small business owners.

This card gives you the opportunity to earn the most cash back short-term and long-term. It also gives you 9 months with 0% APR, a low long-term interest rate after the first year, and great business-related perks through the OPEN savings network.

Do you use a credit card for small business? Which one? What do you like/dislike most about it?

*This content is not provided or commissioned by American Express. Any opinions, analyses, reviews or evaluations provided here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Advertiser. This site may be compensated through the Advertiser’s affiliate programs.