Personal budgeting for business owners

Nov 28, 2021 | Budgeting

With the cost of living quickly rising, budgeting is becoming more and more popular. Business owners often struggle with personal budgeting though as your income can fluctuate so much. While on holiday for example, you may earn nothing at all. So how do you budget?


Estimate your total cash profit for the year. You might base this on your business budget (if you have one), last year +/- changes you know about or a gut feel. Don’t forget to allow for asset purchases as these can use a lot of your cash. 


Deduct tax from this profit – Include student loan and Kiwisaver if this is applicable for you. You can use this calculator here: 


Frequency of pay – Choose how often you want to pay yourself (weekly, fortnightly or monthly). The calculator above will show you the amounts for each of these


Bank transfers – Transfer the amount from step 3 to your personal bank account each week/fortnight/month. Limit yourself to this and don’t transfer more just because it’s there. 


Leave the balance – During busy times of the year the balance in your business account will grow. This is good because it means there is funds to ‘pay’ yourself when you take annual and sick leave. There may also be payments you pay infrequently, such as rates, insurance, and maintenance. Having the surplus cash will get you through all of these payments. 


Adjust as you go – If you find your profit isn’t what you estimated at the start, you may need to adjust as you go. Be careful estimating your profit up too quickly though as increases don’t always last. 

Finally, if you are starting in business you may not always have the revenue to make the payments to yourself. That’s OK. In need you can transfer money from your personal account back into the business account to cover costs.

Contact Us

For more advice, get in touch with the friendly team at Future Accounting today.

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