Money Matters: Take care of yourself first – without you there is no business

So, let’s start with something fun: try to write out what you actually spend on all those TV channels you subscribe to but never watch, and take it from there…

Hopefully the result of this sleuthing is that you stop spending money unthinkingly and unnecessarily and can therefore choose whether to spend it on something useful or save it. This is the secret: seeing a positive outcome so that it becomes a habit – financial management needs to be regular but not a chore.

What should become clear is the difference between your needs and your wants. You can then identify two targets to hit every month: Your essentials then your nice-to-haves.

It’s vital to include everything, some costs might be hidden if they come out irregularly such as every quarter or year. It might show that’s it better to pay some things every month by Direct Debit and spread the cost.

You need to be honest when it comes to you gauging these average amounts, however it makes you feel seeing what can be the awful truth in black and white – nobody’s judging!

It might be the first time you’ve ever done this exercise, it might be shocking! It’s useful to see categories as a percentage of the total, so you can set some easy targets to reduce certain areas (JustEat?) or increase others (hobbies?).

All in all, as a first step, you need to know how much to take out now (or work towards in the near future, if you’re just starting out and have got some savings to dip into) as your ‘Take-Home Target’ – you should be the first in line for when your business pays out, because there’s no business without you!

Otherwise you might not have enough in your personal account and find yourself in a variety of unwelcome scenarios:

Ó paying for items from your business account

Ó taking out random amounts as and when you need them, so not keeping tabs on what you’re taking out (and how much tax you should be setting aside)

Ó taking out a loan

Ó taking a second job or hustle

So take care of yourself! As the philosopher Ru Paul says: If you don’t love yourself, how in the world you gonna love somebody else?

#ownallyourfinances

Sign up for my 2-hour workshop at Portobello Business Centre! [https://www.pbc.co.uk/service-page/financial-big-picture?referral=service_list_widget]