3 simple tips for organising your personal finances as a busy business owner

If you run your own business, your routine is likely to be anything but “normal”. You may sometimes envy your friends and family who have a 9 to 5 job, despite feeling proud of the successful career you built from scratch.

You could find that while your business has achieved great things and continues to grow, you have sacrificed some elements of your personal life in the process. In 2023, NatWest reported that 77% of business leaders admit to losing sleep, 39% work more than their “normal” hours, and 34% have to take work calls at the weekend.

Another aspect of your personal life that could fall by the wayside due to these factors is your personal finance journey. Understandably, you could be much more focused on building and managing the wealth within your business, and take your eye off the ball where your personal wealth is concerned.

Although it can be challenging to spin both plates at once, there are simple solutions for managing and growing your personal wealth as a busy entrepreneur.

Here are three to consider trying for yourself.

1. Use free budgeting apps

If you’re spending little time reviewing your spending and budgeting carefully, you might be more likely to regularly enter an arranged overdraft or turn to credit cards half way through the month. It’s easy to fall into this pattern, and very difficult to dig yourself out of it – particularly if your working hours are long, and you wish to prioritise rest and relaxation when you’re not at work.

Budgeting apps can help you to:

  • Work out how much you actually spend on certain essentials, like fuel and food, as many underestimate these costs
  • Gain satisfaction from remaining within budget each week and month
  • Set aside “fun money” to help you enjoy your down time without financial stress.

 

It sounds simple, but it can really work. Your smartphone will give you access to an array of free apps that might help you stick to your budget without spending too much time thinking about it.

2. Ensure your wealth has both a “home” and a “purpose”

If you pay yourself a salary, you might take the time to route some funds into a savings account each month, and/or invest a portion of this wealth into your portfolio.

While this is a great place to start, you could find yourself unmoored at times, wondering why you bother doing this at all and dipping into your savings and investments on an ad-hoc basis. This might be because, while you know you “should” save and invest for the future, you have not yet designated a specific purpose for certain portions of your wealth.

For instance, you likely pay into a pension each month, knowing that this money will one day be used to fund your retirement. You probably maintain these contributions diligently, because you know that your pension is the perfect home for this wealth that will serve its purpose later.

Try doing the same with your savings and investments. Perhaps you have a high-interest cash savings account that you could ringfence for emergencies, such as home repairs. Another cash account could serve as a “fun fund”, out of which you pay for holidays with your family or hobbies you enjoy. Your Stocks and Shares ISA might exist to one day supplement your retirement income tax-efficiently – and so the list goes on.

Simply by giving your wealth a home and a purpose, you’ll have a clear path to follow when deciding where to position your savings and investments.

So, rather than spending hours worrying about whether you’re making the “right” decision, or falling into undisciplined habits, you can build wealth for the future while barely lifting a finger.

3. Work with an expert to mitigate tax

As a business owner, you’ll likely be aware that a large proportion of UK earners and employers are currently being subjected to tax increases.

Firstly, the previous government enacted a series of “stealth taxes” by reducing available tax breaks, including the Capital Gains Tax (CGT) Annual Exempt Amount and the Dividend Allowance. The CGT Annual Exempt Amount fell from £12,300 to just £3,000 between 2022 and 2024, and the Dividend Allowance was reduced from £2,000 to £500 in the same period.

What’s more, the 2024 Autumn Budget struck a blow to earners and business owners alike, with the chancellor vowing to raise an additional £40 billion in tax. The chancellor raised the rate of CGT for non-property assets in line with property holdings and cut key Inheritance Tax (IHT) reliefs too.

Your personal tax bill could be affected by all of the above if you plan to:

  • Sell your business, or shares, when you retire
  • Take dividends as part of your remuneration
  • Bequeath wealth (business shares, cash, investments, or properties) to the next generation when you pass away.

 

So, it’s likely that tax has been on your mind, but you may not have found the time to sit down and form a robust tax mitigation strategy. Tax planning without professional help can be time-consuming, but without taking the necessary steps, you could find yourself paying more tax than ever in the years to come.

Fortunately, we’re here to help. Working with a financial planner could help you to:

  • Review your existing tax bill and mitigate it where possible
  • Look at your estate plan, including your will, and work out ways to reduce the amount of IHT your children and grandchildren pay in future
  • Create a strategy for disposing of shares tax-efficiently
  • Work out how much Income Tax you might pay once you begin to access your pension, and/or claim the State Pension.

 

Staying on top of your personal finances doesn’t need to be a headache. We can help.

Get in touch

If you’re a business owner who wants to gain more from your personal wealth and leave behind a lasting legacy, our team are here to support your goals.

Email us at [email protected], or call 01273 076 587.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

All information is correct at the time of writing and is subject to change in the future.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning, tax planning, or will writing.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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    About the author
    Picture of Oliver McDonald
    Oliver McDonald
    Oliver is the managing director and independent financial adviser at Engage Wealth Management.
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