10 Essential Tips for Smart Money Management

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“Running your business without financial goals is like leaving your house without a destination. You’ll end up driving around wasting gas, time and money,” said Monica Neubauer, ABR, CRS, a real estate agent with Benchmark Realty in Franklin, Tenn., and host of the National Association of REALTORS®’ Center for REALTOR® Development podcast.

But to meet your goals, you need to practice smart money management. During her session at NAR NXT, The REALTOR® Experience, “Profit Like a Pro: 10 Tips for Healthy Financials,” Neubauer shared 10 insights to help you stay on track.

1. Set a budget. “Number one is to figure out how much it’ll cost for you to stay in your home and not sleep in the rain,” Neubauer said.
2. Be cautious about where you spend money on your business. When you’re starting out and when you’re trying to win business, “don’t pay out money unless you have money to spend. Do all the free stuff first like holding open houses and engaging directly with humans,” Neubauer said.
3. Don’t put earnings into one account. Your commission check should go into a business account, which can simply be a free checking account. If you have money left over, transfer it into your personal account to pay the mortgage and other expenses. Separate accounts make it easier to track business income and expenses, which is important for accurate bookkeeping and financial analysis. “If you put all your earnings into a personal account, you may not be getting all the deductions [you’re entitled to],” Neubauer said.
4. After every closing, set aside some money in a tax account. “There are lots of nightmare stories about not having enough for taxes,” which real estate professionals typically pay quarterly. She also advised that real estate pros should pay income taxes out of personal funds to maintain clearer, more organized financial records and ensure compliance with tax regulations. And while that money is sitting there, put it to work for you in a high-yield savings account or CD.
5. Get separate credit cards for business and personal use. If you buy flowers for a listing and flowers for your house at the same store, for example, put them on separate credit cards, Neubauer said.
6. Watch your expenses. Each month, look through your credit card statements and accounts to see what you bought. Inevitably, you’ll find something, like a subscription that you need to cancel. In addition, create a spreadsheet with annual renewals so you don’t forget to review or cancel those before the deadline.
7. Take your deductions. Start by asking an AI tool what deductions you may be eligible for as a sole proprietor. Plus, with passage of the tax reform bill earlier this year, you may be eligible for other tax benefits. For instance, parents can set up a tax-deferred savings account for children who will be born between 2025 and 2028.
8. Get money management help. “Money management isn’t a natural skill for a lot of people,” Neubauer said. Whether you use a CPA, financial software or a trusted family member, get support to deal with money accurately and ensure you stay current with recordkeeping and allocation.
9. Buy real estate. You have special expertise, so take advantage of it to invest in an asset that over the long term typically appreciates.
10. Save for retirement. Good vehicles for real estate pros are Roth IRAs, which grow tax free, and Simplified Employee Pension plans, which allow you as the business owner to make tax-deductible contributions.

Finally, Neubauer added, “Don’t regret, but don’t continue, bad financial decisions—or you won’t move forward in health.”