Your browser (Internet Explorer 7 or lower) is out of date. It has known security flaws and may not display all features of this and other websites. Learn how to update your browser.

X

Navigate / search

How to Save Money This Winter

If you’re determined to save money throughout 2013, you might have already switched to a low interest credit card, or opted for a cheaper phone tariff, but have you thought about lowering your utility costs? With winter in full swing, your household bills can go through the roof if you’re not careful, so do all you can to bring your outgoings down.

Make use of your heating controls

During the cold spell, it can be tempting to turn the heating up high. While it’s good to have a warm, cosy environment, there’s no need to heat your house all day – particularly if you’re not at home. To avoid high charges, programme your system to come on at specific intervals and ensure everything is switched off when the house is empty. This will keep your costs under control and stop you from using energy unnecessarily. What’s more, try lowering the temperature overnight and throw an extra duvet on your bed to help you sleep.

Insulate your home

If you’re looking to make a few home improvements, wall insulation might be the way to go. Of course, you’ll have to pay to have it installed, but it could save you hundreds of dollars a year. Cavity and solid walls are treated slightly differently, but they can both be sealed to prevent warm air from escaping to the outside world. If you already have insulation, or can’t afford it right now, simple draught-proofing techniques can also make a big difference. Gaps around windows, doors, electrical fittings and pipework will all let cold winds in, so seal them up and make your house fit for winter.

Use less water

As the wind howls and the snow falls, a hot bath can be truly satisfying. Nevertheless, using too much water can increase your expenses, so it’s worth hopping in the shower instead. This small lifestyle change could make a big difference to your bank balance and leave you with more money at the end of the month. Other water-saving tips include washing your clothes by hand, filling the dishwasher to the max before turning it on and fixing all leaking taps as soon as possible. If you think you’re being charged too much for your daily consumption, research prices online and try to negotiate a deal with your utility provider.

Lag your water pipes

Many people spend a fortune on DIY and apply for a credit card to cover the costs. Full-scale repairs can cost money, but simple tasks like lagging your water pipes don’t have to be expensive. Insulating materials such as foam tubes are cheap to buy and are available from most well-stocked home stores. They slip nicely onto a wide range of pipes and prevent them from bursting when the weather takes a turn for the worse. They also keep hot water warmer for longer, meaning it won’t take as much energy to keep them toasty – saving you money!

Penny-pinching and reducing your bills is easier than you might think, so why not give it a go?

5 Common Money Management Mistakes Small Business Owners Make

Two of the most important aspects of of owning a small business is to keep personal spending and business spending separate, and the life line of your business is a healthy cash flow.

Cash-flow management and planning has helped keep my small cleaning business profitable every year since it opened in 2009.

Keeping on top of cash entering and leaving a business is the most basic yet crucial aspect of cash-flow success, but it’s often overlooked by many small businesses owners.

Most business owners wait until the end of the year to find out whether they are making money.There’s one problem though – Waiting until the end of the year is simply not good enough, because fixing problems at the end of the year is simply the wrong way of running a business, and instead problems need to be addressed along the way. And when year end arrives, there’s no worry on whether the business made money, lost it or broke even.

Liquidity is important to maintain the day-to-day operations. Your employees need to be paid, you need to pay your self, and new stock needs to be ordered, and without liquidity it’s a tough stretch.

Here are six common cash-flow errors and a few suggestions on how to avoid or fix them:

1. Not Paying Yourself

Often small business owners forget to pay them selves first, and if we think back to personal finance 101, the first basic aspect is paying your self first. Include a reasonable living wage for yourself in business and cash-flow planning. Planning ahead is essential, and if you go into a personal cash-flow crisis and need to pull cash out of the business, you’ve also created a business cash-flow crisis. That’s why you need to plan accordingly, so that you’re ready at the time of crisis.

2. Mismanaging Credit

How many times have you heard of a small business owner with maxed out credit? I’ve heard and know a few of them personally. They started their business, applied for credit (line of credit or credit-card), and a few months later the credit is maxed out because they went on a shopping spree.

As a small business owner you need to prearrange credit (such as lines of credit or cards) through financial institutions before you need it. You want to be proactive – if your cash flow is tight and you’re experiencing challenges, it will be more difficult for you to go to a bank and get it at the time when you need it the most. If using credit to defer cash outflow, ensure it’s paid back before high interest rates kick in – typically most business credit cards have a 21 day grace period.

Finally, please please please don’t make personal purchases with your business credit. Keep business and personal expenses separate or you’ll end up upside-down with personal and business debt.

3. No Reliable Cash Flow or Tracking System

Use special accounting software and online interactive tools that can help in cash-flow tracking and forecasting (i.e., what is likely to happen to a business over a day, month or year). For receivables, for instance, programs and online tools can send electronic invoices to clients with a link to a portal where bills can be paid online. If you have a company’s accountant, he or she should be providing the owner with information regularly. No information means no cash-flow management.

4. Neglecting the Bills

Just as much as you enjoy getting paid on time, so does everybody else. So, pay your taxes, suppliers, utilities and other bills on time to avoid interest charges and a bad reputation in the industry. Every supplier is different with their terms, some will give you 15 days, others 7 days, and some (very few these days) will give you 30 day terms. Use online programs to keep tabs for you on the due dates or possibly even setup pending payments.

Many companies are offering early-payment discounts, and why isn’t it worth while to get 5-10% knocked off your invoice for paying on time. If you can’t make a payment on time, have that conversation with vendors and let them know your situation, you’ll be amazed at how receptive people are to honesty, and making alternate arrangements.

5. Stagnant Growth

If your company is experiencing significant sales or expansion, update your cash-flow plan and projections to take the implications of growth into account. Businesses find cash flow comes under the biggest demand in rapid growth situations, which means you have to start funding more inventory, more receivables, higher expense levels. Experts say rapidly growing businesses can also benefit from hiring a special adviser, such as a chartered accountant, to aid in growth planning.

Final Thoughts

Being a small business owner online and offline requires tremendous planning, and money management. One aspect that always stuck with me was to keep my personal and business purchases separate. If you do this, you’re already half way there, and for those of you still trying to become effective at this, starting doing so now before it’s too late.

What were some of you money management mistakes? How did you handle them?

Cheers!

Eddie

Photo Credit (kenfagerdotcom)