Some will say that the biggest adjustment to starting a home business is sticking to a schedule that ensures productivity. However, there are others who will say the biggest challenge is managing finances. Obviously, if you were a one income family before then anything you make is bonus money. If you are treating your business as a major source of income in the home though, then you will limit your spending. This is not necessarily all that easy if you are already pinching pennies, but managing your finances will get a little easier with time.
Open a Separate Checking Amount
You do not necessarily have to open a business account, but you do at least need a separate checking account for any business expenses you have. This could include anything from stamps to your internet bill. If you continuously pay for work expenses out of your personal account you will find yourself short when it comes time to pay bills.
You should pay yourself a set amount of money weekly. Now, if your home business is your fulltime job then you will need a higher salary. If this is something you are working on part-time for a little residual income you should still have an exact amount determined. Just because money is there does not mean it should be spent. If you do not limit how much money you spend you will likely find you buy a lot of unnecessary things simply because you can.
If you and your significant other or business partner have a joint account make a rule that one cannot withdrawal or spend over a certain amount without approval from the other party. This is where having a salary will come in handy.
Keep Track of Spending
You may find after a while that you do not need to keep track of every little thing you spend money on. However, this habit will be very helpful when creating a budget. Plus, if you find you are struggling you will be able to quickly determine where you may have thrown money away and where you might be able to cut back on your spending.
Have Good Insurance
One of the things eliminated when spending needs to be decreased is insurance. Unfortunately, accidents, illnesses, and natural disasters never come at a convenient time. Smart business people expect the unexpected. You should have good life, auto, disaster, health, and homeowners or renters insurance. You will appreciate the coverage more than you can imagine should the day come when you need it.
Save for Retirement
Since you are working for yourself, you will not have anyone handing you a pension when you retire. Have a small percentage of your income go directly into a separate savings account. If you never see it, you will not miss it. Even $100 per month will add up to a decent nest egg over the years.