How Your Own Personal Spending Habits Can Affect Your Business Spending

As a business owner, you know to keep your personal finances and transactions completely separate from the finances and transactions of your business… this will save you lots of legal headaches. But what lots of business owners don’t realize is that even though you’re keeping your personal and business transactions separate, your business spending habits tend to mimic your personal spending habits.

Personal spending habits affect business spending image 493003903930The fact that your business spending habits tend to mimic your personal spending habits isn’t necessarily a bad thing… unless you have bad personal spending habits. Whether you have good or bad personal spending habits, it’s more than likely going to have an effect on your business. So what does this mean? It means you’re going to have to figure out what type of spender you are.

What Type of Spender are You?

Most people won’t know the answer to this question because it’s not something too many people even think about. When it comes to your personal finances, you put yourself on a budget (or at least try to) but just as you formulate ways to save money with your personal finances, you need to do the same with your business finances as well.

The key thing to saving money within your business is to first find out what type of spender you are. Below you’ll find a list of the different types of spenders. See if you fit into any of these categories… if you do, it’s probably time to change your spending habits before your business isn’t able to recover from it

Spender Type: The Risky Risk-Taker

It’s a known fact that in business, you have to take risks… “scared money don’t make money.” The thrill of “rolling the dice” gets your heart pumping! But it’s also a known fact that you have to think smart and make smart business moves as well, meaning that certain risks just aren’t worth the risk.

With risky risk-takers, they act and think about it later. They’re the business owners who will take out a large loan to launch a new product without conducting any market research to know if the product will sell. The risky risk-taker will take on certain risks not because they have faith in the product and know that it will be a huge success… they take on the risk because they love the thrill of it and how it makes them feel.

If you’re this type of spender in your personal finances, you’re going to have to turn it down quite a few notches in your business… if you don’t, your odds of winning will be slim to none eventually and you’ll find yourself with no chips left to bet with.

Spender Type: The VIP

The VIP spender is one who, in their personal finances, only buys name brand products, always upgrades their phone whenever a new iPhone comes out, and refuses to fly coach (because only poor people fly coach). If this is your attitude with your personal finances, it can mean a world of trouble for your business.

This type of spender isn’t acting their wage and 9 times out of 10, they’re just putting on a front to look a certain way in front of others when it’s not even necessary. Do you know how many startup businesses achieved success by investing in used products? Hundreds! You can still accept payments on an older model laptop and print out invoices on an old printer just like you can on a new one.

So before you go out and buy the newest iPhone, consider looking at premium used iPhones first for a lower price but still with the same great features and functions. Take that same logic with your business… Before you go out and make expensive purchases for your business, consider looking at bargains for the time being until you can earn enough money to purchase what you really want.

There’s no need to send your business into bankruptcy over your own mindless spending habits.

Spender Type: The Impulse

According to, the science behind impulse buying is due to several reasons. Impulse buying makes us happy and it speaks to loss aversion but if you’re an impulse shopper in your personal finances, that habit is more than likely going to pour over into your business finances as well. If you don’t get it under control, you’re going to end up with a bunch of products that no one wants to buy.

The funny thing about an impulse spender is that everyone has a little bit of it in them. How many times have you gone to the grocery store and as you walk in the store, you’re repeating to yourself “I’m only here for eggs and bread, I’m only here for eggs and bread.” We’ve all had this conversation with ourselves at some point in our lives.

When it comes to your business’ dime, you have to think rationally. Set aside a budget for the things your business needs and even budget a little extra for wiggle room, in case you see something your business actually does need. At least that way, you’ve already budgeted for something impulsive like that and that purchase won’t set you back. Proper budgeting is the only way to combat, or at least reel in, impulsive spending.


Interesting related article: “What is Impulse Buying?”