Question
Am a fashion designer and a Mwananchi credit client, I get good jobs but don’t know where my money goes.
Answer
Here are some detailed points to help you manage your finances as a business owner and keep track of your money.
1. Track your income and expenses: Start by recording all your income sources, including payments for your fashion design jobs, freelance work, or any other earnings. Also, keep a detailed record of your expenses, such as materials, equipment, transportation, and any other business-related costs.
2. Create a budget: Once you have a clear picture of your income and expenses, create a budget to allocate funds appropriately. This budget should cover both your personal and professional expenses. Set aside a specific amount for savings, emergencies, and future investments.
3. Categories your expenses: Group your expenses into categories, such as raw materials, business overheads, marketing, personal expenses, etc. This categorization will help you identify areas where you might be overspending.
4. Review your spending habits: Regularly review your spending habits and identify areas where you can cut back. Be mindful of unnecessary expenses and consider alternatives that can help you save money without compromising on quality.
5. Set financial goals: Define both short-term and long-term financial goals. Having clear objectives will motivate you to manage your money better and achieve your desired financial milestones.
6. Separate personal and business finances: This is where some business owners miss it and it begins to seem like you’re not making any money when in fact it’s just mismanagement of funds. Separate your personal finances from your business finances. Set up a dedicated business account to handle all your fashion design-related income and expenses. This separation will make it easier to track business-related finances and claim tax deductions.
7. Regularly review your financial situation: Make it a habit to review your financial situation regularly. This will help you stay on top of your financial health and make necessary adjustments to your budget as your income or expenses change.
