Three mistakes I've never made with my finances as an education business owner

I will start this blog post by saying that I have made plenty of mistakes with money over the years... as every successful business owner has!

However, right from the start of my business I have never made any of the following mistakes (which I see other small businesses making all the time)...

Mistake 1 - Not tracking income and outgoings every month on a simple spreadsheet

I spend time on the first working day of the month to go through my bank account and log my income from each different source. Then I go through my business outgoings and note down everything I've spent the previous month. My accountant (who is also my bookkeeper) does the same, but I like to have my own spreadsheet as well, just to make sure our numbers match up! For some people, this might seem like overkill, but it reduces my stress levels enormously to know exactly what is coming in and going out every month. My spreadsheet runs from April to March, so I also have an idea of exactly how much I'm earning and spending every financial year.

Mistake 2 - Doing tax returns at the end of January and panicking about how much to pay HMRC

It's the first week of February as I'm writing this and I must confess I find it incredible to see people only doing their tax returns at the end of January! If you do your tax return months in advance, you find out how much you will need to pay, but you don't have to pay your tax bill until the end of January. For me, it's just much less stressful when you know months in advance how much tax you will need to pay. My accountant does this for me now, which is even better, but even before I had an accountant, I did it myself in April or May every year.

Mistake 3 - Not putting aside any money into a separate tax account/ISA 

The amount varies depending on how much I'm earning/spending and how much I think I'll need to pay, but I usually put around 10-15% aside once a week, and this is always more than enough. As far as I’m concerned, this is not my money, it never was my money and it will never be my money. Love it or hate it, it belongs to HMRC! So I just move it to an ISA and pretend it's not there. Then, when I have to pay my tax bill, I have plenty of money put aside to pay it without stress.

Be honest, how many of these mistakes have you made?! Are you tackling this financial year differently?

If you need some help with tracking your finances, come and join the Teaching Beyond the Classroom membership! I've recently created 5 core masterclasses covering everything I think you will need to set up and run your education business.

In the first of the masterclasses, I walk you through exactly how to set up with HMRC, what to track and what to declare. I’ve even made a spreadsheet for the members to use every month to track their income and outgoings. I have set a reminder for the members every month, so they remember to do it, and knowing we're not alone as we're doing the same spreadsheet together every month makes it feel a lot less daunting!

For more info about the TBTC membership (currently priced at £19.50/month, but this is going to go up again soon), head to https://www.katelanguages.co.uk/offers/Awp8xMhE/checkout