How to Manage Your Business Finances with ADHD
Managing your money feels overwhelming for many but the difficulty level increases by x10 for ADHDers. Add in income through self-employment and there are a lot more things to think about and manage.
What can you do to set yourself up for success? I’m going to share with you exactly what I do, and why. I’ll walk you through how to set up your business finances so you’re able to pay yourself consistently, have $ saved for tax time, and more.
STEP #1: Separate your business and personal finances. This means separate bank accounts (more on this later), and credit card. These may not need to be official business accounts, depending on your business and where you live. Check with your bank or a trusted professional.
STEP #2: Get clarity on your entire financial picture. Being self-employed means your business and personal finances are closely related. To see your big picture, start by building a personal budget, and then create one for your business as well. Click HERE to get my free budget tool.
STEP #3: Set up additional accounts for your business. You’ll need the following accounts:
Income (this account's only job is to hold onto your income until you move it)
Tax savings (if you collect sales tax, having 2 tax accounts is helpful-1 for sales tax, and 1 for income tax)
Salary account (this is the account that you will pay yourself from)
Expense account (this account will cover your business expenses)
Bonus account (that’s right, you can get paid regularly AND pay yourself bonuses)
STEP #4: Step back and look at what you plan to earn in your business this year, and what you estimate your expenses will be. Then talk to your accountant or find an online tax estimator to approximately how much you will owe.
STEP #5: It’s time to put your new accounts into action. You need to decide how often you will do transfers in your business. I recommend a frequency between weekly and monthly depending on your business. If the frequency you start with doesn’t work, don’t worry, you can change it.
STEP #6: This step can feel overwhelming because you want to get it ‘right' but there is no way to get it exactly right. The most important thing is to start. You’ve worked out your personal budget, so you know how much you will need to pay yourself. You’ve worked out your business budget, so you know your business expenses. You’ve got an estimate on your taxes. You have everything you need to move forward. I am sharing a tool that I’ve created to help you decide your starting percentages. It will also help you see how much business income you need each month to cover everything. You can grab it HERE. You’ll have to make a copy to add in your numbers.
I want you to take lots of deep breaths as you work through setting this up for yourself because it is a lot. All your efforts will be well worth it once things are up and running. If you are ready to get things going but need a little help to make it happen, I’d love to chat with you on a free consultation.
BONUS STEP: Set up a system to stay on top of your bookkeeping. It could be as simple as a spreadsheet that you manually update if you don’t have a lot of transactions. But for ADHDers I do recommend you use a program like Wave (free) or Quickbooks to help make sure you don’t miss anything. If your situation is complicated or you don’t know where to start, investing in some help will be well worth it.
