Living Frugally: Business Ownership

It’s been my experience that most folks don’t associate business ownership with being frugal. They automatically assume owning a business involves major expenses. While that can be true, that is not always the case. There are certain aspects to business ownership they’re unaware of or misunderstand.

Living Frugally

Tax Breaks:

The idea of giving Uncle Sam one cent more than necessary is simply annoying. Fortunately however, tax laws are written in a way that gives many entrepreneurs the ability to reduce the taxes owed. I remember spending money on things like dry cleaning, weapons, and fuel for my personal protection agency – a fancy way of saying bodyguard. These expenses were all tax-deductible. Every transaction was entered into ledger and each week my accountant would add up the total. This would be added to a column designated “deductions.” This was the amount of money that I didn’t have to pay taxes on. Additionally, my home was the main office of the business so I was able to write off a portion of the monthly rent at my duplex. Once my accountant crunched the numbers she figured my rent went from $615 to about $410 per month. I loved getting those income tax return checks, to put it mildly.

Time Freedom:

I strongly believe that time freedom is more important and valuable than a high salary. As a business owner, not only was I able to spend a lot of time with my young son but my child care expense was $0.00. That’s what I call frugal living! The cost of full-time daycare these days can easily run about $240 per month for each child. Instead of watching this money fly out the window, I was able to put it to work for me each month. A traditional job would have robbed me of time freedom and consequently $2,880 each year.

I realize business ownership is not for everyone. It’s hard work…but so is being a successful employee. The difference lies in a few factors:

1. If you are the boss, you are in more control of your income.
2. As the boss, you decide your schedule, not someone else.
3. Tax deductions await you.

Weigh your options and decide on a course of action. Business ownership just may support your frugal lifestyle goals.

Blogger-in-Chief here at RetirementSavvy and author of Sin City Greed, Cream City Hustle and RENDEZVOUS WITH RETIREMENT: A Guide to Getting Fiscally Fit.

6 Comments

  1. I think the biggest advantage to having your own business can be the time freedom as you pointed out. Time is often just as valuable as our money, and having your own source of income – instead of relying on an employer – seems the best way to go about earning yourself more of it.

    • Great points, Laura. As I noted in a previous blog post, the sooner an individual can eliminate their reliance on earned income (working for the proverbial ‘man’ – the closer to true wealth they will be.

    • Thanks for reading Laura. I’m with ya as far as time freedom. I actually consider it more valuable than $$. Keep coming back, I look forward to more of your input.

  2. The idea that owning a business can support living a more frugal lifestyle is a great observation, SavvyTaz. I was interested in seeing this week’s blog post as I just received notice that my Articles of Organization has been approved for my LLC here in Arizona. I started the business for the reasons you noted and I believe it will provide some benefits with regards to my rental property, income from my books, any future books, and and other endeavors that are unknown at this time.

    • Congratulations on the AoO James. I’m sure you’ll enjoy the many benefits of business ownership. I really enjoyed writing this blog because of my passion for entrepreneurship. I hope your readers respond well.

      • It was something I have been thinking about for awhile and was recently encouraged to do so by a co-worker.

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