Managing your finances can feel overwhelming when you’re handling both career and a side business.
Most Career Women earn a monthly salary, while side business income may be less predictable.
It is good to note that the basic principles stay the same no matter your income sources.
What differs is how often money comes in and this affects how you plan.
Managing Your Finances: The Three Golden Rules of Money
Managing your finances starts with having a budget.
You need to have an idea of how much you earn versus how much you should spend.
Beyond budgeting, managing money revolves around three essential principles:
- Make Money: As a career woman, you make money by going to work and earning your salary.
- Maintain Money: This involves saving a portion of your income and ensuring its value is protected against inflation. As a minimum, if you earn 100 naira, you cannot spend the whole 100 naira; you need to save something.
- Multiply Money: Invest your savings to grow your wealth over time.
Let’s look at how to keep these principles
1. Setting Your Savings Goal
You need to have a savings goal and a budget to determine what you are saving.
A recommended blueprint is to save a minimum of 20% of your income, as seen in the biblical story of Joseph and the Egyptians, who saved 20% during the seven years of plenty.
If you can’t start at 20%, start somewhere and gradually build up to that goal.
That saved 20% should be kept somewhere that is at least maintaining its value or ideally, where you are investing and multiplying it.
2. Living On Your Budget
Knowing your income and savings plan is one step, the bigger challenge is adhering to your budget.
You must be mindful of purchases you make that you don’t need. For example, when you attend a wedding, if the required colour is “miraculous pink” or “sexy pink,” remember that pink is pink.
If it’s not your wedding or a close family member’s, can you wear the pink dress you already have in your wardrobe instead of buying a new one?
The key thing to bear in mind is that within every month, you have a specific amount you want to spend so you can save or invest the rest.
3. Managing Your Side Business Income
If you have a side business, you may be getting money intermittently, unlike your monthly salary.
Money from your side business should be considered additional income and your base financial needs should be satisfied by your salary as much as possible.
You should not spend 100% of your salary and 100% of your side hustle income.
You can decide on a percentage that works for you, such as spending 30% of what comes from your side business and saving 70%.
If you only run a side business, you need to determine what percentage of the income is profit that comes to you as the founder (e.g., 10% or 20%).
At the end of a specified period, withdraw that money, keep it as your own and invest it.
The biggest takeaway is to set a clear savings goal, be disciplined enough to meet that goal and build your financial intelligence to invest your money in the right way so that it multiplies.
READ ALSO: Why Most Businesses Fail
