Solopreneur Finances: Finding Your Balance

by | Jun 6, 2024

As a solopreneur, you’re juggling more than just your business finances- you’re also managing your personal, household, and family finances. 

And while business may be good, a lot of solopreneurs feel like they’re making too much money to be feeling so broke. 

Let’s dive into why this happens and how you can strike a healthier balance between growing your business and boosting your personal wealth.

Starting your own business is thrilling, but it’s easy to let personal and business finances mix. This blend can muddy your financial clarity, leading to stressful cash flow management and possibly even legal headaches when tax season rolls around.

Penny’s two cents worth: Make sure you have separate bank accounts for your personal and business finances. My favorite tool for personal accountability and control is Qube Money. It’s more than a tracking tool, it’s a planning and real-time tool to stick to your intention of how much to spend in each category. It’s great with a partner and even has kid cards to help them or another adult such as a nanny.

As of this writing, it’s only available for personal accounts, however, it’s on the development roadmap for a business version shortly.  You may use something such as QuickBooks for your business or even a basic Excel sheet. We like the idea of an account to receive revenue, an account for expenses and a business savings account for things like taxes and other short-term categories. This clear divide helps you see exactly where your money’s going and how your business is doing.

Ever feel like you’ve got plenty of cash flowing in, but then suddenly, it’s gone? This illusion is all too common and can leave you feeling like you’re never really making progress.

Penny’s two cents worth: Get ahead by setting up a cash flow forecast. This will show you when money will likely come in and when it is supposed to go out, helping you avoid those surprise shortfalls. Plus, it helps you figure out the perfect time to pay yourself so you don’t feel business broke. We recommend getting on a bi-monthly pay cycle as soon as possible. 

Don’t miss out on my detailed guide, The Myth Unveiled: Pay Yourself First – A Reality Check for Solopreneurs, where I dive deep into getting your pay just right.

It’s a weird feeling – your business account looks great, but your personal bank account tells a different story. This disconnect can mess with your head and slow your momentum. Just because the business makes X dollars doesn’t mean the owner/employee does. I hear people mesh this all the time but it doesn’t reflect the health of the business.

Penny’s two cents worth: Nail down some solid financial goals. Set specific targets for your savings and investments, and regularly check how you’re doing. This keeps you focused on real wealth-building, not just day-to-day earnings. It might be great to have a slush fund or “hill and valley” fund for those irregular months so your pay doesn’t take a hit when things slow down.

Reacting on the fly to financial ups and downs can leave you feeling out of control. It’s stressful when every financial decision feels like a crisis.

Penny’s two cents worth: Draw up a detailed plan that covers both your personal dreams and business goals. Whether it’s saving for a big family vacation or reinvesting to grow your business, having a plan in place makes every dollar work smarter.

Adopting these strategies will not only streamline your financial landscape but also boost your confidence in making smart money decisions. Remember, flying solo in business doesn’t mean going it alone financially. It takes time to master it so give yourself grace and get support.

Feeling ready to align your business strategies with your personal aspirations? Let’s chat! Schedule a free Discovery Call with me at Pennywise Coaching, and we’ll start mapping out your path to financial clarity and success.

About Penny Kidd

I'm a social worker turned Financial Coach. I'm completely debt-free (including my house!) and help others make their money behave by doing a budget and becoming intentional with their money.

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