This archive report was first published on 7 November 2019.
Published on November 7, 2019, a personal finance expert at Centonomy, Michael Thotho, shared valuable insights on how small business owners can manage their finances effectively.
Thotho emphasized the importance of separating personal and business finances, advising business owners to open both a current expenditure and a business account. He explained, “Your money is your money, but your business’ money is not your money. You can separate finances by having a separate account for your business where you channel all your business income then pay yourself a salary.”
He also recommended paying oneself first, which involves putting money aside to save before spending on others. Thotho suggested starting with 10% of one's salary and making it a habit over time.
Tracking expenses is another crucial aspect of managing finances, according to Thotho. He recommended using budget and spending trackers, such as apps like Mint, Goodbudget, or You Need a Budget, to monitor expenses and identify areas for improvement.
Regularizing income is also essential, Thotho noted. He advised business owners to decide on a regular time to withdraw money from their account, whether weekly or monthly, to ensure a steady income.
Lastly, Thotho emphasized the importance of planning for retirement. He suggested starting to save for the future through retirement plans offered by institutions like the Retirement Benefits Authority, Old Mutual, or other suitable providers.
