Finance is one word which makes or breaks a business. Hence, financial Planning is a must for every business’s growth. Many businesses go bankrupt due to their negligence towards business expenses. Maintaining your financial record and keeping a close eye on it will help you in eliminating debt and increase financial security. Not just this you can then easily save for future expenses. We have compiled a list of risky financial habits which should be avoided and ignored by small business owners.
1. Risky Investments
Avoid risky investments. You don’t want your savings to dissolve into vacuums. Whenever you want to invest in any business or if you wish to buy shares, make sure that you have completed your research comprehensively. Know the history of profits generated before investing, so that you may know how much to invest.
2. Ignoring Your Cash Flow
Cash Flow management is one task which everyone should become familiar with. You should keep a close check on your financial statement and bank account information, whether they are home based expenses or business related. Creating a plan for your financial goals should be an important yearly task and should be followed religiously.
3. Do You Use Credit Cards for Purchases? Don’t!
Ditch the plastic cash. If you cannot pay for something at that moment, then don’t buy it. Many tend to utilize the facility of bi-weekly direct deposits without keeping a track on it. So by the time salary or profits are deposited in your account, banks deduct the amount which you have already spent through credit cards, leaving you in debt. So, using credit cards for expensive purchases may not be a healthy idea while running a small business.
4. Bad Spending Habits
Making Impulsive Purchases is one bad habit which should be ignored. Impulse buying, during shopping, can be easily avoided by staying miles away from shopping areas- both online and offline stores. Before you plan to buy anything make sure and think whether you need it or not, wait for 24 hours and think it through. Do you need it as badly as you think you do?
5. Are You Saving for Emergencies and Retirement
Retirement is a phase of our life which we often ignore during our youth. Also, one cannot avert Illness and accidents. So first of all, save for your emergency fund, keep your family’s future secure and then save for your retirement days as well. Because investing in your future is the best thing you can ever do to yourself.
Healthy financial habits are the secret behind healthy lifestyle. So ditch the bad spending habits and create a path for yourself which will lead you towards financial success.