Starting a blog is a great hobby to do in your spare time but if you’re serious about it and you put the work in, it can be a great way to make some extra money. Most people start out doing it as a side project but if you build a big enough following and forge some good relationships with sponsors, you could turn your blog into a full-time job. You can give up your other job and start working on the blog as your main source of income. That means making the switch to being self-employed and that can be a difficult transition for a lot of people. It’s easier to manage your money when you’re getting paid the same amount at the same time each month. But now you’re self-employed, your income won’t be as regular and there are all sorts of other financial issues that you’ve got to wrestle with. That means a lot of bloggers make some big money mistakes that could put their new business at risk. These are the biggest money mistakes that bloggers make and how you can avoid them.
Mixing Personal And Business Expenses
Separating your personal and business expenses is essential if you’re self-employed, otherwise, things are going to get messy. There are a couple of ways that people can get mixed up. First off, if you start spending money on the blog when you’re doing it as a side project, you might only be spending occasionally so you don’t really need to keep things separate. But when the blog becomes a full-time business, you need to open yourself a dedicated business account. People also mix up expenses when they’re out shopping. For example, say you head out to buy a new camera to take photos from your blog and while you’re in the store, you see something that you need for the house. So, you just buy them together on your business card. It doesn’t seem like that much of a problem at the time but if you start doing this regularly, you’re going to lose track of your spending on both sides which can easily lead to financial problems.
Getting Your Taxes Wrong
It’s also important to separate business and personal expenses for tax reasons. When you’re submitting your tax returns, you need to make sure that everything is accurate and you’re only claiming things that are business related as expenses. If you accidentally get mixed up and personal items end up on your expenses claim, you could end up dealing with an HMRC Investigation into your tax affairs. Any errors could be considered an attempt to avoid tax and pay less than you owe, which will land you in a lot of trouble. If you submit your forms late you could end up getting fined as well. Always make sure that you start filling out your returns with plenty of time left, it takes a lot longer than you think. Make sure that you’re checking the submission dates as well so you don’t risk getting your returns in late.
Not Separating Income Streams
Most people that run a blog have several streams of income. You’ll earn some money from advertising on the site, some from collaborations with companies, and any other services you might offer. It’s important that you keep track of what you’re earning and, more importantly, where it’s coming from. The reason for this is that you need to know whether you’re spending your time effectively. For example, if you’re putting a lot of time into finding outside companies to collaborate with but you aren’t making that much from it, you might be better off spending that time writing great articles to entice more readers and boost your advertising revenue. The only way to get a real sense of how well your blog business is doing and which areas need more work is to separate your income streams. Make a note of all of your income from different areas and how much time you’re spending on each part of the business and you’ll have a better idea of how to move forward.
Overspending When Things Are Going Well
If you’re getting loads of new readers and getting lots of offers to review products from outside companies, your income is going to shoot up. That’s great news but you’ve got to be careful how you handle all of that extra income. It’s tempting to start spending loads of that money on yourself but you can’t guarantee that you’re going to carry on this success. When you’re self-employed, you never know how much you’re going to get paid each month so you always need to have some cash reserves. That’s why it’s important to continue the good money habits that you normally have. Carry on being frugal with your food shopping, putting money aside in your savings and reinvesting in your blog. If you just blow all of that extra money right away, you could find yourself in financial trouble in the next month or two if your earnings go down again.
Paying For Things With Credit Cards
Running a blog doesn’t come with that many expenses compared to other businesses but you’ll still need to pay for things like website hosting and design (if you’re not doing it yourself) as well as a decent camera to take photos from your posts. You’ll also have to pay travel costs if you’re going to events to write about them etc. To start with, you’ll need to cover some of those costs out of your own personal money but, hopefully, when the blog is up and running you should be able to pay for things out of your earnings. It’s important that you only spend what you can actually afford to spend and don’t start using credit cards to cover any of your business expenses. That’s an easy way to get into debt and that’s going to make it harder to run a successful blog business.
If you’re going to run your own blog and start making money out of it, you need to avoid these financial mistakes.