Business Expenses Are Not Free

Business Expenses Aren't Free: At Peace With Money

There is a common misconception among business owners: thinking that “I will write that off as a business expense” means it’s free. Let’s bust this myth! Our business (and bottom lines) will be all the better for it. 

Why Do We Think This?

The root of this misconception probably stems from our experiences as employees of larger companies. As an employee, business expenses are often “free” in that you get reimbursed for them or your company is covering the expense. However, now that you own your business, the expense is included in your bottom line. Business expenses no longer disappear into the ether of corporate bureaucracy – owning a small business means every expense shows up. 

A New Way to Think About Business Expenses

It’s true that as a business owner, you do get a tax write-off for business expenses. But it is also true that an expense is still an expense; the money still leaves your accounts. It’s important that, as business owners, we rewire our brains to recognize this. Business expenses are not equal to receiving things for free. Free stuff is still the best option!

Business Expense Advice: At Peace With MoneyRecognizing this may mean we need to reexamine our approach with expenses in general. When making a purchase, it’s important to ask yourself, “Is this expense actually adding value to my business? Do I really need this?”. Often we are pressured into spending money on our businesses that we don’t really need to, especially when starting out. Evaluating our priorities and finding financial clarity in our businesses can be a helpful step in the right direction. 

As my final tip, I’d like to present a favorite Profit First strategy of mine. Ask yourself, “Can I wait just one more day to make this purchase?” This simple question can again help you in evaluating your financial priorities, and buy you more time to get your business finances in order. 

 


Angela

Images: rawpixel.com , Brooke Lark

Keep This Financial Advice in Mind While Car Shopping

Keep-This-Financial-Advice-in-Mind-When-Shopping-for-a-Car: At Peace with Money

Recently, my sister called me to ask for some financial advice while car shopping. I suggested that she keep in mind the big picture of her life. It’s easy to get distracted by the shiny new gadgets on a new car and to think you need them or that upgrading a bit won’t make much difference.

However, if you step back to remember what it is you are working towards, that can help you evaluate your financial priorities and clarify your decision-making. It may be important to you to drive a new energy efficient car, or maybe you’re working toward early retirement. Perhaps you have kids or parents you want to provide for.

During the car buying process,  it’s easy to get sucked in and forget those priorities. Suddenly you might find yourself thinking, “I deserve this fancy ride.” Sometimes salespeople attempt to entice you by spreading out payments over just one more year. All kinds of trickery and tomfoolery can be found at car dealerships!

Keep-this-in-mind-while-car-shopping At Peace With MoneyYour goal is to avoid that, and focus in on your needs and financial priorities. You do not want to be that person who is excited about their new car for the first 6 months– that is, until you realize you don’t have funds for that once-in-a-lifetime vacation. My sister realized her most important goals are to fund retirement and to keep her work schedule flexible. Keeping those life goals in mind helped her reach a decision she felt good about. Maintaining a sense of financial clarity goes a long way while car shopping!


Angela

Image Sources: Mitch Rosen, Tuce