Money management. Sounds like something reserved for accountants in grey suits or people with spreadsheets open for fun, right? But if you’re running a business, managing a household, or simply trying to keep up with the cost of living in Western Australia, money management isn’t just a nice-to-have – it’s survival.
Let’s break it down in plain English: money management is about knowing what comes in, what goes out, and whether what’s left is enough to get you through the next season, both financially and mentally.
So, What Is Money Management?
At its core, money management is just being intentional with your money. It’s about giving every dollar a job and making sure your money is working for you, not the other way around.
That means:
- Knowing where your money’s going (hint: if you’re not sure, it’s probably leaking out somewhere)
- Having a plan for what’s coming in
- Being prepared for the “uh-oh” moments, because they will come
In WA, we’ve been riding the wave of a long economic summer. We’ve had boom times, a mining industry that’s kept things afloat, and government support during COVID that gave many businesses a soft landing. But that doesn’t mean we’re immune to winter. And winter doesn’t send a calendar invite, it just shows up, usually when you’re not ready.
Let’s Talk Budgeting (Before You Switch Off)
Budgeting isn’t about restricting yourself or cutting out every nice thing you’ve ever enjoyed. It’s simply about paying attention. Think of it as pruning your garden. Yes, it takes effort, but it makes room for healthier growth.
Here’s how to start:
- Track what’s coming in and where it’s going (no, “miscellaneous” is not a category)
- Set goals that actually mean something to you, like taking a holiday and paying yourself properly
- Allocate your income into categories that match your goals (this is where the Profit First system really shines)
- Review and tweak as life happens, because it will
In Profit First, we use separate accounts for things like Profit, Tax, Owner’s Pay, and Operating Expenses. That way, you can look at your bank balance and actually know what money is for what, not just a big lump sum that disappears before your eyes.
Saving Isn’t Optional Anymore
Gone are the days when you could rely on “next month’s good sales” to smooth things over. These days, unexpected expenses seem to show up like relatives at Christmas, often, and always with timing.
A few saving strategies worth considering:
- An emergency fund with 3 – 6 months’ worth of expenses (trust me, it saves more stress than it does money)
- Automated savings transfers – set and forget, so you don’t spend it first
- High-interest accounts that give you a little reward for being responsible
And Then There’s Debt…
If budgeting is the pruning, debt management is weeding the garden. Not glamorous, but absolutely necessary.
Start by paying off the high-interest stuff (hello, credit cards), and consider consolidating debts if it means fewer payments and lower interest. The goal is to get back in control, not to be punished.
And please, if you’re staring at your credit card wondering how it got that bad, know this: you’re not alone. But ignoring it won’t make it better, just more expensive.
It’s Not Just About Numbers. It’s About Purpose.
At Additional Business Concepts, we don’t just crunch numbers; we help you connect your money to your purpose.
We ask three simple but powerful questions:
1. What is the purpose of your business?
2. How much does it need to pay you?
3. How much does it cost to run?
If #2 and #3 don’t support #1… then we’ve got a gap to close. That’s where money management, specifically the Profit First system, helps you close the loop.
Final Thoughts
Money management isn’t about perfection, it’s about paying attention. The economy may be heading into a new season, but you don’t have to be caught out in the cold.
If you’re feeling a little unsure of where your money’s really going, or you’re ready to finally feel confident about your cash flow, get in touch. At Additional Business Concepts, we’ll help you put a plan in place that actually works for your business, your life, and your goals.
We’ll help you manage your money so your money stops managing you.
It’s the calm before the storm. Let’s get your finances winter-ready.
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