Money management is one of the least fun things in business, but it’s one of the most important parts. It ensures you know what money is coming in and what money is going out, and when all those moving parts of the business are actually happening. But, that’s not all.
Below, I’ve listed 5 of the most important reasons why you should take some time to create a money management system!
1. Set and Reach Your Financial Goals
To set financial goals, you need to know where the money is going. You can’t create goals without knowing what your money is doing. Once you know where it’s going, you can set goals, and once you set goals, you can create a money management system that will work for you and make those goals a reality.
2. Even out the highs and lows in your finances
Most businesses have highs and lows in their cash flow. Maybe you get paid once a month or sporadically throughout the month, maybe you have more expenses during certain times of the month. Whatever it is, money management will help you to balance those highs and lows and make them work.
3. Find the bad spending habits
An all-inclusive budget will show you all of your spending habits, both good and bad. Whether it’s necessities like office supplies and marketing or other impersonal spendings like meals and coffee stops. You will be able to see and analyze those spending habits and decide which ones you can cut back on.
4. Plan for future spending
Whether it’s a business trip, an expense, or a splurge, proper money management will allow you to make a plan to purchase your big-ticket item. You can develop a plan by determining the cost of the item and the timeframe that you want to purchase it in, and then review and evaluate your plan to make adjustments where needed.
5. Peace of Mind
This is the most important reason, in my opinion. Money management lets you know where your money is going, the highs and lows, and all the bits and pieces of your finances. Knowing these numbers will help you take control, make a plan and feel empowered. They’ll be no more staying up at night wondering what’s going on with your numbers or whether or not you’ll make all your payments this month. Money management holds those numbers accountable and gives them a place to be, which takes the stress out of finances.
Well, that’s it. Those are the 5 reasons why you need to have a well thought and proper money management business plan. I know it doesn’t sound fun, but I promise, knowing and creating a plan for your finances will take the chaos out of it. You’ll feel knowledgeable, empowered, and in control, and soon enough, you’ll start seeing sassy and sexy numbers!