Bits of advice about getting rich quick, starting up a business, setting a budget, or saving for the future are not necessarily taught in school. We’re lost in all the slew of information, navigating through life and debt on our own, charging everything to experience. It can turn out to be costly, and even weigh heavy on your relationship as business partners.
Here are seven do’s and don’ts to help you manage your finances as business partners:
1. Do: Take account of your expenses
Plan your expenses BEFORE your money gets into the bank. Don’t begin spending for something you can’t afford to pay. You have full control of where and what you will be spending on in advance. If you need help, tempCFO as the best financial services outsourcing firm to keep tabs on your ‘numbers’. Keeping a budget and sticking to it before the entry of money can avoid all the hardships of debt and ensures discipline especially when sales try to lure you to spend more than you should.
2. Do: Know your limits and spend accordingly
Taking to account all your accounts, investments, assets and perhaps net worth, you and your partner will be able to see just how much you can spend and invest in per month. Having a clear picture of what you can or cannot afford keeps you in check and your spending too.
Try comparing each month’s expenses and see if there are ways you can save or do without a particular expense. Discuss with your partner some of the things that are essential to your business and those that are not basing it on what you can and cannot afford. It helps both of you participate in financial decisions and a way to get to know your partner more.
3. Don’t: Give in to Impulse Buying
The latest trends and sales can lure you into purchasing something unnecessary that would only gather dust in the house and affect your business budget. Marketing is a billion dollar industry that aims to get you to spend more on something that you don’t necessarily need at the moment. They seek to tickle your fancy and get you to bring out your wallet by making you feel incomplete without their specific product. Buyer, beware!
To protect your relationship with your partner, here are some tips to keep you aware of the seductive schemes:
- Understand what the company is selling. Is it happiness? Belonging? Achievement? Will the product bring you all these?
- Cash is best used when making purchases outside the budget. Can you afford it?
- Stop the entitlement. Yes, you may be having a hard day at work and think that you deserve that product. But in the end, giving into the emotions will only burn a hole in your pocket. Live with contentment and gratefulness.
- Stick to the budget. Don’t buy items that weren’t in the grocery list lest you go over the budget and cause tension with your partner.
- Use the 24-hour rule. When you see something you really like offered at a great price, consider waiting at least 24 hours before purchasing. What’s meant to be yours, will be.
4. Do: Save
Make sure that savings are also included in your financial goals as partners. There are ways to ensure that contributions are made, such as setting up the auto-debit feature in your current account. Instead of withdrawing everything at once, have a system set to make you save for your future as partners. Try splitting one account into several accounts each with particular purposes like savings and investments.
5: Do: Be aware of your Credit Report
Adulting is hard work and keeping your relationship void of financial woes, and your savings intact are even harder tasks. Your Credit Score and Credit Report are essential factors that will follow you and haunt you especially in making financial decisions as partners. Don’t take this for granted because it will affect your future and that of your partner. When looking to invest, it is best to have a good Credit Rating already covered to ensure you get that loan, car, or even house that you may be needed as your business grows. Pay those bills off. Keep your rating spic and span. Think future forward!
6: Do: Enjoy your workplace benefits
Before getting into any employment, we usually ask what’s in it for us. There are benefits each company provides that you still may not know the full scope of. Understand your rights and benefits as both an employee and employer by checking in with the HR, understanding your work contract, and even researching the laws. Don’t underutilize these benefits that you and your partner are entitled to. There are many companies out there that offer rebates on insurances, leaves, loans and other financial means. Make sure you’re in the know with the latest memos on these.
7. Do: Live within your means
There’s no need to “keep up with the Joneses” or the Kardashians. Let’s be honest, who are we really trying to impress with that last luxurious expense? You definitely won’t find favor in your partner for it. Think before you buy. Maybe you feel pressured to spend when you’re with a certain group of friends, take a good look at that and evaluate whether these friends are worth trying to impress. If your neighbors buy a new car, should you too? Beware of covetousness that may lead to debt and of course the inevitable arguments with your partner. Learn instead to live within your means. If you can’t afford it, if it’s not in the budget, don’t.
Save your business partnership by saving your finances. Use these tips to live a life free of debt, stress and unnecessary headaches. Reach your partnership goals through these financial do’s and don’ts.