5 Personal Finance Mistakes I See Business Owners Make
Running a business demands focus, energy, and problem-solving on a daily basis. But here’s the truth most business owners don’t learn until it’s too late:
A great business doesn’t automatically create a great personal financial life.
I’ve noticed the same personal-finance mistakes pop up over and over again when working with business owners. They’re simple, they’re avoidable, and fixing them creates immediate financial clarity.
Let’s walk through the five biggest ones.
1. Assuming Their Income Will Always Be the Same
Business income is lumpy. It fluctuates with sales cycles, client churn, the economy, seasonality, and sometimes pure randomness.
Yet many business owners plan their personal life right after that huge record breaking year. They Assume that this is the new normal
What happens?
They build a lifestyle that fits their best year instead of their average year.
A single down year wipes out cash, savings, and confidence.
2. Allowing Lifestyle Creep
This mistake usually follows a good year.
Revenue jumps. Profits rise. Cash is flowing.
Suddenly it feels like the “right time” to:
Upgrade the house
Replace the car
Join the private school list
Say yes to every new expense
Here’s the issue:
Lifestyle creep is easy to add and almost impossible to reverse.
Once spending goes up, expectations go up with it. Then when income normalizes (and it always does), the pressure starts.
3. Being Biased Toward Certain Investments
Business owners often fall into one of two camps:
Only invest through retirement accounts.
Never use retirement accounts at all.
Both are mistakes.
Retirement accounts offer tax advantages you shouldn’t ignore. Taxable accounts offer flexibility you absolutely need. Relying “all on” or “all off” creates problems:
Too much in retirement accounts means no liquidity.
Too little in retirement accounts means too much tax.
4. Chasing Speculative Investments
Every year I see business owners pour money into:
Options trading
Crypto bets
High-risk angel deals
Whatever is trending on social media
Not because it fits their financial plan but because it “seems like an opportunity.”
Here’s the reality: You already have a highly concentrated, illiquid investment.
It’s called your business.
Stacking more speculative bets on top of an already risky foundation is how wealth quietly gets destroyed.
5. Hiring Cheap Professionals
Bad tax help.
Bad bookkeeping.
Bad legal advice.
Bad insurance guidance.
I see it all the time.
Early in business, going cheap feels responsible. Once the business grows, it becomes costly.
Cheap bookkeepers cost you deductions.
Cheap tax pros cost you strategies.
Cheap attorneys cost you liability exposure.
Cheap insurance agents leave you undercovered.
The downstream cost of bad advice is almost always 20–50 times more than the original savings.
Your business may be thriving, but your personal finances require their own strategy, structure, and discipline. Avoid these five mistakes and you’ll create:
More stability
More control
More ability to invest
More optionality long term
More protection for your family
Small changes compound quickly when you’re running a profitable business.
If you want help putting the right systems in place for the new year, you can reach out any time.
Here’s to a strong finish to 2025 and a well-planned 2026.
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