Blog Finances: Learn about what to do with your blog income and how to manage your blog finances like a professional business.
It finally happened.
After years of hobby blogging for fun, my blog is finally beginning to see more considerable traffic.
In fact, it’s starting to turn a small profit through display ads by Monumetric. I get paid monthly to blog now!
If you can relate, it sounds like it’s time to take your blog to the next level.
It sounds like you’re ready to learn how to manage your blog finances.
In this post, I will look at how to manage your blog finances like a professional business.
Let’s dive in.
Blog Finances: How to Manage Your Blog Income
From the moment you begin to receive income from your blog, you have a small online business.
So, once that happens, you must begin to manage the money your blog is generating.
Here are six steps to manage your blog finances like a business:
Six Steps to Manage Blog Your Finances:
1. Open a Separate Bank Account for Your Blogging Business
Depending on the way you get paid, the first thing you will need is a separate bank account.
If you get paid via PayPal, it’s possible you can use PayPal as a temporary bank account for blog income.
At least that provides a way to account for and track your income.
But since PayPal is not ideal for every transaction, it may be worthwhile to open a specific account to keep the funds separate.
Simply put, it’s just more professional.
Plus, having a separate bank for your blogging business makes it easier to track blog earnings and pay for expenses.
2. Track Income and Expenses
To maintain a successful budget, you must track income and expenses.
The same goes for blog finances.
In order to run a profitable business, you must track income and expenses to know if you are profitable.
Personally, I track my blog finances in a self-made Apple Numbers spreadsheet.
3. Pay for Expenses with Profit
As soon as your blog is profitable, you should start to cover your expenses with your blog’s profit.
I mean, what’s the point of continuing to pay for web hosting or for the domain out of your own pocket?
Depending on when you get paid, you can prepay for web hosting with profits, or place blog income into a separate expense account.
Otherwise, there aren’t many recurring blog expenses.
In my case, the only two monthly blogging expenses are my Canva Pro membership and the cost of hosting.
When I receive my monthly payment from Monumetric, I transfer the cost of my Canva Pro membership to the account it’s debited from. Typically, I pay for hosting and for the domain in advance.
4. Reinvest Profits but Remain Profitable
If you want to grow your blog, you absolutely must reinvest back into your blog.
My business strategy is to reinvest for growth while remaining profitable.
To be more specific, I will only reinvest into the blog with surplus income.
For example, the Canva Pro membership cost $16.99 per month.It is a valuable tool that helps with marketing the blog. The Canva Pro membership provides thousands of images and fonts to market the blog. Paying for the membership leads to growth.
But I didn’t just go out and start paying for that membership in my first month of blogging.
I waited until the blog was earning enough income per month to cover the cost of hosting and the Canva membership.
Once I earn a more considerable amount, I will look at other opportunities to reinvest profits into the blog.
In the meantime, my goal is to generate a surplus while earning enough blog income to cover the cost of web hosting and a Canva Pro membership.
5. Invest Blog Profits in a Holding Account
In addition to reinvesting blog profits to grow blog revenue, bloggers can also invest surplus profits.
If you can earn enough money from blogging to cover your expenses and generate a surplus, you can invest the surplus to make more money.
Starting in 2021, I am planning to move all surplus blog profits into a non-registered commission free Wealthsimple account.
This way, I can invest blog profits into dividend stocks to earn dividend income from blog income.
It’s the ultimate version of compound interest—investing money made from blogging about investing.
Technically, if I invest my blog proceeds, the dividend income generated by the holdings could eventually pay for blog expenses in the future.
The other benefit is that the money is there if large unexpected expense arises.
6. Prepare for Taxes
Whether you are a sole proprietor or a corporation, you must prepare for taxes.
In fact, even if your blog income is small, it’s worth it to speak to a professional accountant.
You need to know what you can deduct and what to report.
At the very least, do your own due diligence and set aside money for taxes based on what you earn.
In general, you probably want to save at least half of all earnings for taxes.
But that depends on your tax bracket and how you report income.
Needless to say, income taxes are complex so you should prepare. Speak to a professional if necessary.
Blog Finances – Final Thoughts
Ultimately, bloggers who earn income should manage blog finances like a business.
To professionally manage your blog finances:
- Open a separate account.
- Track all income and expenses.
- Pay for expenses with blog profit.
- Reinvest profits but remain profitable.
- Invest profits.
- Prepare for taxes.
By running your blog finances like a professional business, ideally, you will keep more money in your pocket, reinvest more wisely, and achieve revenue growth in the future.
Related
Monumetric: A Simple Way for Blogs and Websites to Earn Monthly Income
Google Ads: Why I Prefer Google Adsense for Blog Monetization
What is a Blogger? Everything You Need to Know about Being a Blogger
9 Ways to Make Money from Blogging in 2019
12 Blogging Goals for 2020
I am not a licensed investment or tax adviser.All opinions are my own.This post may contain advertisem*nts by Monumetric.This post may also contain internal links, affiliate links to BizBudding, Amazon, Bluehost, and Questrade, links to trusted external sites, and links to RTC social media accounts.
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