By Rhonda Campbell
You could hire a money manager or go out and buy money management software like Quicken Budget, Mint, AceMoney or Money Dance. It’s an effective way to track profits and losses. But, just tracking what you’re spending and earning may not be enough. You also have to get control of your financial habits. Push this point aside, and you could find yourself swimming in a pool of debt.
Money Management Skills Could Help You Avoid Going Into Debt
To get control of your business (and personal) finances there’s an easy, inexpensive step you could take. You could avoid creating long-term debt. If you’re already in debt, it’s time to take steps to come out of debt. To do this, limit the reasons you’d ever use a credit card or take out a loan. Also start paying your credit cards off, as the interest rates on the cards generally only rise the longer it takes you to pay your balance off completely (I’m talking down to $0).
Before signing up for business credit cards, compare long-term interests rates on the credit cards. Additionally, pay off credit cards within 30 days. Once you get in the habit of doing this, it may feel foreign if you let a credit card bill go unpaid for 31 days or more.
The Right Type of Money Management Help
Look at your credit card expenses each month; no more guessing at what you’re putting on your credit card. This cannot be overstated. You have to take the guesswork out of your budget. Better yet, consider getting a business charge card; this way you’ll have no choice except to pay your balance off in a certain number of days. Also, avoid taking out loans to pay off existing debt as this could create a cycle of debt. For example, you could sell stocks in your company to raise capital.
Other ways you could improve your money management results include selling off equipment you no longer use, developing more digital products (to lower shipping and handling costs), closing early during slow sales periods, lowering office thermostats to save on utility bills and unplugging office computers over the weekend. When attending conventions, etc., you could also split floor space costs with another (non-competitor) small business.
The payoff could be huge. After all, national governments aren’t the only entities faced with looming debt. Individuals and businesses also have to find ways to continue growing their revenues while, at the same time, they manage their debt. However, this doesn’t have to be the case. Practice solid money management skills and you could avoid creating debt, putting yourself and your business in position to respond positively to shifting economies.
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