The charges you put on the company card can feel pretty innocuous. A new desk chair, a weekly lunch with colleagues, an upgraded office space; it all falls harmlessly within bounds for any business owner. If it's not eating away at anyone's income, what's the problem with the occasional swipe of the company credit card?
There's nothing intrinsically wrong with business expenses, and no one is suggesting that entrepreneurs stop spending money. Unfortunately, the need to spend often gives way to spending that's not so harmless or innocent. The opportunity to make purchases at work that you wouldn't make on a Sunday with your family is exactly how so many business owners end up deep in the throes of financial infidelity.
Unlike traditional infidelity, the financial sort can be twisted and manipulated and ignored, even when it happens in broad daylight. Still, the fallout of deceptive business spending can damage trust and relationships beyond repair.
Being honest with your spouse
It's not a terrible idea to separate your work life from your home life. After all, no one wants to bring their work troubles home to spread out on the kitchen table.
That mindset, while healthy in one regard, can turn little white lies into catastrophic financial troubles. When the company hits a rough patch, the proud entrepreneur chooses to keep that information under wraps. In an attempt to fix the problem quickly and quietly, he or she decides to leverage the family home and get a little cash flow. The plan was never to steal from their spouse, but that's exactly what's happened. If the company goes belly up, the family is on the hook for spending they never knew about.
Year after year, finance is one of the leading causes of divorce. It's natural for couples to have disagreements about saving and spending, but it's a big problem when those disagreements are coupled with dishonesty. When undisclosed business debt plays a role in that conflict, things get really sticky.
If company costs are piling up, and you feel inclined to keep that information from your spouse, you would do well to be forthcoming. Even if you keep separate bank accounts, your financial lives are very much intertwined.
Being honest with yourself
Financial infidelity thrives on people's best intentions. More often than not, the secrecy comes from a place of concern.
A wife with a startup doesn't want to worry her husband, so she gets a small loan on the side without his knowledge.
A husband is trying to court a new client with fancy dinners, but feels guilty about the spending and keeps the credit card statement hidden.
These events, especially when isolated, seem innocent enough. In some cases, they're dealt with and never really come to light. The majority of the time, however, one hidden expense turns into a dozen. Before too long, you're spending to cover up the spending. By the time you come clean, the debt is out of control and has invaded your personal finances.
Most problematic behavior, from compulsive spending to gambling to substance abuse, is made worse by the constant lying that comes as a byproduct. To lie, in most cases, is a means of self-preservation. You don't want to talk about questionable spending at your company, because it shows you in a less-than-flattering light. Instead, it's easy to hide the problem and continue the habits while hoping the situation will miraculously solve itself.
As the one in charge of the purse strings, you have to see when business spending might soon bleed into your personal life. You have to be truthful with yourself when considering how company expenses might affect your spouse. If you choose the path of secrecy, it's a slippery slope that goes down a long, long way.
The amount invested back into your company isn't always something you can control. Inventory, staff, transportation — some costs are simply unavoidable.
That said, you can still create a spending philosophy that allows for prioritization. You can budget in a way that makes sense and, more importantly, allows you to be honest and transparent with your loved ones. To start, you can make a list of your necessary and discretionary expenses. If you aren't sure what category a certain expense belongs in, assume it's discretionary.
A budget will not only help you spend sensibly, it will combat the "all business spending is good spending" mindset. Too many CEOs get caught up using the company card as a display of wealth and success, and that behavior is pretty much textbook financial infidelity. When it's easier to spend money on a new standing desk at work than taking your kids to see a movie, your priorities need a realignment.
Establish limits. Put safeguards in place. Don't succumb to wishful thinking when it's obviously not working, especially if you know you're predisposed to spending more than saving.
It's very rare you'll hear someone in the twilight of their life wishing they'd spent less time with family and more time ordering lunch at the office. Work might feel all-encompassing right now, but you have a commitment to your family and your future. Be honest with yourself, be honest with your spouse, and don't lose sight of the things in your life that make you truly wealthy.