24: The Importance Of Financial Literacy In Your Small Business Whether You Are Self-Employed, A So

24: The Importance Of Financial Literacy In Your Small Business Whether You Are Self-Employed, A Solopreneur, Entrepreneur, Small Business Owner, Virtual Online Bookkeeper, Virtual Assistant Or VA

Financial literacy is just as important when you are taking care of your personal finances as it is when you own a small business. April is financial literacy month and since this podcast is all about Mastering Your Small Business Finances, it is only fitting that we should talk about how financial literacy makes an impact on your small business. Studies are showing that the financial literacy scores are slowly and steadily declining. I understand you became a business owner because of the passion you have for what your business is all about and not necessarily about the finance aspect, but I know you want to do everything you can to ensure your business is as successful as possible, which includes understanding your finances. Financial literacy might not come easy to you, but if you make it a priority, especially if you are new to owning a small business, it will help you manage the financial side of your business more effectively. Increasing your financial literacy will help you make smart business decisions such as when to hire an employee and when or if you should take out a loan as well as how to manage your debt. You will be able to understand the taxes that are relevant to your business and how every action you take impacts your financial statements. Listen in today as I talk about why financial literacy is so important and how you as an entrepreneur, small business owner, virtual online bookkeeper, or virtual assistant can increase your financial literacy. Not only do I feel financial literacy is important for adults, but it is also extremely important to increase financial literacy in children. My passion for helping increase financial literacy extends to kids and teens as well. My Youth Financial Journeys help increase youth financial literacy by incorporating real-life and hands-on scenarios from our normal day to day lives and simplify it for kids and teens, so they are able to learn from these financial activities. To help increase children’s financial literacy and in honor of April being financial literacy month, I have a special offer for you at the end of this podcast if you have a child in your life you want to make sure has a good understanding of financial literacy for their future so that they will learn to be responsible with their financial choices and make smart financial decisions throughout their adult lives…

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Show Notes:

Financial literacy is just as important when you are taking care of your personal finances as it is when you own a small business. April is financial literacy month and since this podcast is all about Mastering Your Small Business Finances, it is only fitting that we should talk about how financial literacy makes an impact on your small business. Studies are showing that the financial literacy scores are slowly and steadily declining. I understand you became a business owner because of the passion you have for what your business is all about and not necessarily about the finance aspect, but I know you want to do everything you can to ensure your business is as successful as possible, which includes understanding your finances. Financial literacy might not come easy to you, but if you make it a priority, especially if you are new to owning a small business, it will help you manage the financial side of your business more effectively. Increasing your financial literacy will help you make smart business decisions such as when to hire an employee and when or if you should take out a loan as well as how to manage your debt. You will be able to understand the taxes that are relevant to your business and how every action you take impacts your financial statements. Listen in today as I talk about why financial literacy is so important and how you as an entrepreneur, small business owner, virtual online bookkeeper, or virtual assistant can increase your financial literacy. Not only do I feel financial literacy is important for adults, but it is also extremely important to increase financial literacy in children. My passion for helping increase financial literacy extends to kids and teens as well. My Youth Financial Journeys help increase youth financial literacy by incorporating real-life and hands-on scenarios from our normal day to day lives and simplify it for kids and teens, so they are able to learn from these financial activities. I have a special offer for you at the end of this podcast if you have a child in your life you want to make sure has a good understanding of financial literacy for their future so that they will learn to be responsible with their financial choices and make smart financial decisions throughout their adult lives…

Welcome Back…When you own a small business, more than likely it is going to be you, the business owner who provides the skills and financial knowledge to run your business. You will be the one to create your budget, do your accounting and set your sales prices. You will bring everything you know from your personal finances into your business. Being financially literate can help you manage your small business effectively and elevate your decision making and leadership skills.

So, what is financial literacy? Financial literacy is the ability to understand and effectively use various financial skills including personal financial management, budgeting and investing.

When you are financially literate and can apply these skills to your business you are better equipped to understand your financial statements and can see the impact your actions make in the financial health of your business.

Understanding your financial statements helps you make smart business decisions, and by increasing your financial literacy you will be able to consider how certain decisions will impact your financial statements before you even make those decisions. These decisions could be whether to hire an employee or when and if you should take out a loan for your business. No matter which actions you take, you will want to know how these decisions are affecting your profitability.

Financial literacy can be broken down by many different aspects in your small business. Let’s take for instance taxes. Your small business may be subject to different taxes, but you want to be familiar with and understand the taxes that affect your small business. Do you have payroll taxes, self-employment taxes or sales taxes? How is your business entity taxed? Does it get taxed at the corporate level or does the income pass through to your personal return? Not only will it be important to understand your small business taxes, but equally important you will want to understand the due dates of these taxes as well.

Another area of financial literacy that will be important to your small business is how your cash flow impacts your business. You will want to make sure you understand when and how your business receives income as well as when your bills and other expenses are due. These are two ways financial literacy relates to your business, and having adequate financial knowledge about them and many other areas within your business can contribute to the success of your small business.

So, now that you know how important financial literacy is to your business, you might be asking how you can build your financial literacy? First, you need to make it a priority. Jump at the chance whenever you have an opportunity to learn more about financial literacy and how it impacts your business. This could be taking a basic accounting course, attending a webinar, training or reading a book or article. Another way is to take advantage of lessons you can learn each day in your own business. Such as making sure your bookkeeping and financial statements are up to date. Look over your financial statements each month and keep a pulse on your cash flow. Next, when you are talking to your accountant or bookkeeper, make sure you ask them questions so that you understand what they are saying. There could be times when an accountant or bookkeeper assumes you understand what they are saying. Don’t be afraid to spend some time with them and ask questions. A good accountant or bookkeeper will help clarify what they are saying in terms you are able to understand. You can even ask them to explain it to you like they would to a fifth grader. You’ll be amazed at how much you can learn from them. When you have a small business, it’s easy to use your financial information to help you become financial literate. Don’t make increasing your financial literacy too difficult, find a way you learn that you actually enjoy. Yes, you can actually enjoy increasing your financial literacy…you are doing it right now by listening to this podcast.

Money management and financial literacy starts when you are young. It is important to have our children start learning about financial literacy early to improve their financial literacy as an adult, so they make fewer money mistakes. Business owners tell me all the time, they wish they had learned many of the skills I teach in my Youth Financial Journeys when they were younger…and especially before they went to college. During the month of April, I am offering you $10.00 off one of my Youth Financial Journey packages which start at just $39.00 by using the coupon code April2021. These journeys inspire kids & teens with age-appropriate adventures in earning, saving, spending, and sharing money while developing a strong financial foundation. When we teach children about money at an early age and as they grow, they will learn to be more responsible with their financial choices and make smart financial decisions throughout their adult lives. The Financial Adventure’s Youth Financial Journeys are simple, easy, and available for immediate download. I take the hassle out of trying to gather all the necessary information needed to teach your children financial literacy on your own. The Piggy’s Youth Financial Journey is recommended for ages 5–7, The Kid’s & Teen’s Financial Journey is recommended for ages 8–18 and the Teen’s Advanced Financial Journey is recommended for ages 13-18. The Youth Financial Journeys make great gifts as well, and you can purchase them at www.FinancialAdventure.com/Join. I’ll post a link where you are listening to this podcast as well.

And, you know I’m going to ask…what’s at least one thing you will take away from this episode that will help your business succeed and grow your bottom line? If you need some accountability, join our PRIVATE Facebook community and post your action item, we’d love to support you.