How to Manage Business Finances

How to manage business finances is a question that often comes up when people are starting their own business. There are many different methods for how to manage your business finances, whether you want to go with an online system or invest in accounting software, there are several options out there for entrepreneurs looking to expand.

“I’m working on my personal finance, but it’s tough work.”

Are you one of the millions of Americans who say they’re working on their financial health? Millions of people have turned to sites like Mint or You Need a Budget in order to become financially responsible. Unfortunately, 40% of these users abandon their resolutions within six months- sometimes because it’s just too much work.

If this sounds familiar, maybe what you need is an automated system.

Unlike the human brain, financial software doesn’t forget to track your expenses or fail you when it comes to saving money for your goals. Whether you choose an automatic direct deposit option like Wagepoint or simply want software that tracks your investments, there’s a way to manage business finances with little difficulty.

“I don’t know how much I make…”

One of the biggest reasons people abandon their resolutions concerning personal finance is because they find it difficult to determine exactly how much money they’re shelling out each month. Fortunately, there’s no need to go through life in the dark when it comes to knowing what you spend- even if it means giving up that spare time around tax season. Apps like Mint not only show you where your money is going, but they also provide a detailed look at what you’re bringing in and how much your monthly expenses are. Mint offers free software that can sync to your bank account and track upcoming bills so you’ll never be surprised by an overdraft again.

While apps like Mint help you see where your money goes, it still doesn’t tell the full story- as there’s no way of knowing how much you make . Most financial experts recommend setting aside 30% of your income for savings. However, if you take home $2000 each month and spend $1200 on rent, even with zero spending on entertainment or food, this leaves only $800 per month for other expenses (and absolutely nothing leftover). This is why it’s important to know exactly how much money you bring home each month, not just how much you spend.

A financial tracking system like Wagepoint makes it easy to manage business finances- whether you want to track your expenses, budget for upcoming bills, or project future earnings. When employees choose direct deposit, they can program Wagepoint to divide their funds into different accounts based on percentages or goals (i.e., one account for rent, another for food). If an employee wants to take a long weekend with no spending money at all? That’s fine, too; the software will automatically delete that day’s income from the appropriate account(s) and keep them in the black- without them even having to think about it!

According to Forbes, 63% of Americans spend more than they make. If you want to reach your goals and become financially responsible, you need a system that can make progress towards those ends.

“I don’t know where all my money goes…”

So it’s been a few months since you downloaded Mint or Wagepoint- but now what? That’s a great question. It might seem like an insurmountable task at first, especially if you’re not accustomed to tracking your expenses on a regular basis, but the sooner you get used to keeping track of your spending habits, the faster you’ll be able to save up for anything from an emergency fund to retirement. Keeping accurate records is the only way to determine whether or not there are trends in where your money is going, or if you can do anything to improve your financial health.

According to Time Magazine, the average household spends $2,060 per year on coffee. Whether it’s Dunkin’ Donuts Blueberry Scone Splash; Starbucks Iced Skinny Hazlenut Latte; or Peet’s Coffee Cold Brew…it adds up. If you buy a cup of joe every weekday and spend $5 (a low estimate), that translates to over $1,000 in spending each year! You could save that money towards something special; like a vacation for two to Paris (and give yourself some extra spending cash).

When it comes down to it, there are millions of ways we end up wasting money without realizing it. Additionally, there are many habits we can adopt that will help us save money each and every month.

Here are a few ways to become more fiscally responsible:

Track spending on an app like Mint or Wagepoint (you’ll never again wonder where your money goes) Set up automated transfers into multiple savings accounts (one for emergencies, one for movie nights, and another for new shoes ) Decide on a percentage of monthly income you’d like to save- so you don’t have to think about it Add an extra $100 per month to your 401(k) If you want something, wait 30 days before buying it so as not to impulsively consume Cut out the extras such as daily Starbucks trips and expensive dinners with friends  Negotiate your bills (i.e., call Comcast to lower your internet bill)

If you want to be financially responsible, it’s time to put a plan in motion. Once you know where your money is going every month, you’ll begin to see trends and can make changes accordingly. If spending on entertainment or food has gotten out of control, try starting small- dedicate one night a week to staying home with pizza instead of hitting up your favorite restaurant. Taking small steps towards frugality will help you become more mindful about how much money you’re really bringing into the house each paycheck.

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