This is an old post. I like this one better.
Managing money is challenging enough when people work a regular 9-to-5 job, but when you start to run your own online business, managing your money can become even more difficult. While having your own online business can be the first step to financial freedom, this only works well if you can learn to manage your money effectively.
Income is Unpredictable
In a regular job, you can rely on a certain amount of money each week, on a particular day. This means that you can predict how much money you will have when your next bill comes in.
This means that you need to make goals, keep an eye on how much money you actually make and plan around this. One of the most important elements that I learned early on is that if I have a really good week or month, it’s not necessarily the start of a trend. That means going out and spending all that money is risky.
Regardless of how much you are making, you want to save some of it. I always set my goals high. I might only save half of what I aim to each month, but I would probably do the same if my goal was much lower also.
Because of this, I can have a really bad week, or even a really bad month, and be alright. Remember, there is much less to fall back on when you have an online business, particularly if this is what you do instead of a job.
There is More to Manage
For many people with an online business, money does not come from a single source. For example, you might get some money from affiliate advertising on a website, some from doing guest blogging and some from doing freelance jobs. For myself, my revenue comes from writing, so I might have twenty different clients, one company I work for and one freelance website that I check regularly. I have no idea how much work I will have a week from now, and I have to budget around this.
Software Can Help
There are a lot of different types of software you can use to help you budget. Personally, I use Microsoft Excel, mainly because my computer has it and I was forced to learn it at school. Open Office is also a good approach, particularly because it is free and does essentially the same thing.
However, instead of spreadsheet software, you can actually use dedicated budgeting software. A general web search for budgeting software will give you a lot of options and you can go from there. I would suggest only consider things that have free trials, or are entirely free. After all, paying several hundred dollars for a piece of software that isn’t particularly good, doesn’t provide a very good start to your budgeting approach.