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Bad Idea #1: The Business will "Buy It"

June 3, 2018

You just tore your final contact lens but don't have the money in your regular checking for more.  "I know," you think to yourself, "the business will buy it!  I've gotta see, right?"

 

You didn't quite plan out your personal grocery budget that month, so when you go to buy the snacks for your piano party, you add a gallon of milk, loaf of bread, and those rainbow carrot things that would be great for dinner.  It's not exactly ALL for your piano party, aka a true business expense, but hey, you're out of cash, so "I know," you think to yourself, "the business will buy it!  I've gotta eat, right?!"

 

Standing in Walmart you see a cute shirt that would look great on you, and you're tired of your clothes.  Didn't exactly budget for that, but you cleverly think, "I know;  the business will buy it!  I need to look professional, right?"  

 

Oh, you clever thinker, you.

 

But then, a few weeks later, you sit down to fill out your monthly Profit and Loss statement for your piano lesson business and you are reminded of all of those times the business "bought it."  And after doing the math, you realize that, you may have made $1200 that month in piano lessons, but after taxes and all of those clever business expenses, you actually brought home $239.  

 

Um, ouch.  Not so clever after all.

 

Not only that, fast forward to tax time and you and your tax preparer are looking over receipts and she calmly looks at you and says:  "Really?  You needed sunless tanning lotion to do your business?"  

 

Um, ouch.  Not so clever after all.  

 

Dear Piano Teacher friend, believe me, I do not write you this in judgment whatsoever.  I get that you are doing the best you can and that finances are tight (definitely can relate!). so I'm not pointing fingers your way. 

 

I'm writing this as a loving warning.  So, remember all of that mushy love I'm adding to this when I write this bold statement:

 

If it is a personal expense and you don't have the money for it, you don't have the money for it.  Do not pay for it out of your business account.  Don't.  Don't. Don't.

 

Because then you've got two problems, my friend.  You've got a personal budget problem (because you didn't budget accurately in the first place) and now you've got a business budget problem (because you're spending things out of there that have no business being bought.)

 

Who wants two problems instead of just one?  

 

Keep your budgets clean.  Keep your spending accurate and ethical.  Keep simple records.  

And listen to that inner voice.  No, not the clever one that says, "I know, the business will buy it."  

 

Listen to the wise voice that says "Stop. Think this through." 

 

There are certainly legitimate expenses we incur as piano teachers, and those should be taken out of your business account.

 

But, using your business account to rescue your personal budget?  That's a bad idea.

 

Trust me, when it comes to spending, keep personal, personal and business, business.  You will be glad you did.  

 

 

 

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