8 Bad Money Habits to Kick – Part 1
Generally, I am seeing and hearing slight improvement in business confidence now and for the future. This is a great time to take stock of money habits and put in place improvements to strengthen your business. Over four Blogs, we will look at eight money habits business Owners/Managers should make sure are NOT occurring in their business.
Spending without a Budget
When in business, there is a tendency to focus on sales/billable hours and customer service, without always keeping an eye on what it is costing to provide these services and products. It is vital, to ensure success of a business, to operate with a budget. Business owners need to plan and monitor for the money going out as much as for the money coming in.
Businesses owners need to forecast and track expenditure to understand and optimise where the money is going. Businesses owners also need to account for the non regular spending and perhaps put a bit aside for the emergencies.
Carrying a Balance on Credit Cards
Carrying a balance on credit cards is a very expensive way to do business. Even with relatively small amounts owing, add up over time. For example, if a business is carrying $5,000 on a credit facility with a 18% rate, and makes minimum repayments each month, it would take approximately 26 years to pay the debt off at an all up approximate cost of $12,000 (assuming the original debt is never increased, payments are made on time and not fees are incurred).
Consider paying credit balances in full each month. If budgets and cashflows have been developed and are being monitored, utilising credit should be manageable. If an unforeseen situation arose requiring an emergency use of the credit facility, consider not using credit again until the balance is paid in full.