Are You Making These Money Mistakes, Mama? - By Dondrea Owens
“When it comes to money, a whole new level of taboo gets added and makes it hard for us to really get the answers we need. It’s like opening your lingerie drawer and inviting others to explore its contents.”

We’ve all made a mistake before. Yet, no matter how gentle the delivery or how quick the discovery of it, making a mistake elicits a strong emotional response from us. We feel guilty. We feel ashamed. We feel less than our best selves.

We share the same shoes, mama!

I’ve been there — working hard across the board as a mama, a business owner, a wife … you name it. Growing a business while being everything to everyone is no small order, but we do our best to make it look easy and to juggle as many balls as we can without dropping one.

When it comes to money, a whole new level of taboo gets added and makes it hard for us to really get the answers we need. It’s like opening your lingerie drawer and inviting others to explore its contents. We don’t want to expose our potential money mistakes to the world.

That’s why I’d like to share with you a few tips to boost your confidence and ensure that you’re not making simple (and easy-to-fix!) money mistakes in your business. So, let’s get started.

Money Mistake #1: Mixing Business and Personal Expenses

The first piece of advice I give to creative entrepreneurs is to use separate checking accounts for business and personal transactions. Not only does it make it easy to track business expenses for tax reporting purposes, but it also makes it easy to know your numbers when you run monthly profit and loss statements and assess business performance.

Having separate accounts also ensures personal privacy. Imagine handing your account statements off to a bookkeeper at the top of the year and having him or her sift through your personal transactions for business deductions. Save yourself the worry and fear of judgment, and separate those accounts now! If you already have separate accounts, make sure to avoid commingling funds by using your business debit card for personal purchases and vice versa.

Another factor in keeping business and personal expenses separate is liability. If you’re a registered business entity (LLC, partnership, or corporation), maintaining a separate bank account for business keeps personal assets out of the mix. One of the benefits of forming a business entity is to shield personal assets from business liabilities, so do your part in keeping them separate. Otherwise, you could risk losing that shield of liability.

Money Mistake #2: Spending Everything You Earn

The second mistake you may be making is spending from sales instead of profit. That’s why you must know your numbers! You could be spending cash that truly belongs in your business to cover expenses.

You also need a spending plan — a list of expenses that occur monthly or annually in your business. Include the due date for each, as it will help with planning cash flow from month to month. You should review your spending plan monthly so that you’ll always know what bills are due, when they’re due, and how much cash you should have on hand to pay them.

You may be thinking: what if I forget something is due or have a large unexpected expense that I can’t pay from my current monthly profit? That’s where having a reserve or savings account comes in handy.

The first reserve I recommend is a tax reserve. You don’t get to keep every dollar you earn, so it’s wise to set aside those estimated tax payments ahead of time in a separate account until you’re ready to pay. When it’s time to write your quarterly check for taxes, you won’t find yourself shrinking in shame because you’ve spent the money. Business savings accounts are perfect for planning future purchases such as conferences, new equipment, courses and training, or new branding. Saving for these expenditures helps smooth the demand on your cash and makes sure you’re not tapping credit to pay for these expenses.

Money Mistake #3: Skipping Weekly and Monthly Bookkeeping

The third and final mistake you may be making in your business is skipping weekly maintenance and monthly bookkeeping for your business. Mamas, it’s a must that you know exactly what transactions happened in your business every single week. Quickly categorizing the week’s transactions and scanning receipts will eliminate the scramble to do a whole year’s worth of transactions at once. Trust me, it’s no fun. So, make it happen weekly!

Accountability partners are great for this sort of task. Hook up with your business bestie, and keep each other accountable for getting those transactions categorized weekly. The same goes for monthly bookkeeping.

If you’ve been keeping up with weekly maintenance, running your monthly reports will be a breeze. Run a profit and loss statement for the month and year to date, and compare those reports against your annual income goals to see where you stand. This makes analyzing your business goals against your performance part of a regular process and ensures that you’ll stay on track to crush your goals.

Already have enough on your plate without adding these new tasks? Hire a bookkeeper to help you manage your monthly bookkeeping.

Now that you’ve done the heavy lifting in mistake-proofing your business finances against three of the top money mistakes you could be making, take a breather. Many more mistakes exist, but know that you can always raise a hand for help with the solution. So, go easy on yourself, mama!


Dondrea Owens is the founder of The Creative’s CFO, a boutique agency that provides virtual bookkeeping and financial accountability partnerships for creative entrepreneurs and small business owners. When Dondrea is not working, she enjoys having fun in the sun with her family, sipping a smooth glass of Malbec, and reading romance novels. Find her on Anchor.fm and Instagram

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