When you become a business owner, your life responsibilities double.
You have your home needs and budget and your work needs and budget to track. This can be overwhelming at first for many people. To stay on top of life and not feel constantly overwhelmed, you must learn how to integrate the business part of your life into your personal life as easily as possible.
One of the biggest stressers in self-employment is managing your expenses and taxes. There are many ways you can approach this business requirement, but I want to share a trick I learned several years ago that made tracking expenses much easier.
It is what I call the “Two for One”.
How to Use the Two-for-One – For YOU
This is actually just a habit you use when purchasing. If you use this habit it does several things all at the same time for you:
- Helps track your mileage by date
- Helps manage your business purchases
- Separates your business purchases from personal purchases with no receipt separating and calculation
- Helps you budget for home and business more effectively
- Cuts down on the amount of fuel you spend for errands
- Cuts down on the time you spend to run your errands
- Could possibly cut down on the amount you spend because you are organized and plan what you are spending your money on
This easy habit looks like this. EVERY SINGLE TIME you go to the grocery store – or go shopping – plan in advance your personal shopping list, have a separate business shopping list, and use that trip to purchase for both at the same time. Then follow the outline below.
I keep a running list of things I need to get for home and a list of things I need for my business.
- There are some great apps for your phone that you can do this on.
I take both lists with me and every time I go to a store I do 2 things:
- Make 2 completely separate purchases – one for home and one for work
- Use 2 separate debit cards for those purchases – my home account and my business account
I do not use cash for these purchases because I want the records of the purchase through my account as well as the receipt. Credit cards can simplify this even further if in the annual report for your card, the categories and what you spent in each “expense’ area is already divided out and calculated. I have a business credit card for just business purposes and this information is so easy to plug in come tax time.
I also try to avoid making special trips to the store for different needs. I have learned that it is a waste of precious time, money, and fuel for my car.
The tax benefit to all of this is that you keep expenses separate, have a mileage log that is more complete, and are able to keep track of things in a more organized fashion automatically. Recording your expenses as an excel document or in a quick books program becomes even more simple. You are doing the sorting and documentation as you are making the live purchase.
The only downside to this habit effects the person standing behind me in line – the one that has to wait through a second purchase.
To learn more about how to manage your business efficiently, go to the Massage Business Methods online training center.
