Proper money management can sustain or kill your home business. Money both feeds and measures our efforts. Good business practices will allow you to remain financially healthy. You will be able to honestly answer that most feared question- "So, how's your business doing?" - with a big, smiling, "Very well, thank you."

Three principles will guide you through the mine field. Separate, Document and Reserve.

Separate your business dealings from your personal life. You wouldn't use an employer's credit card for a trip to the movies or a new plasma TV, and this is exactly the attitude you have to have with your own business. The technical term is 'commingling'. Commingling is evidence of either an ignorant business person or an attempt at fraud. Never use a business account or assets for personal projects or purchases.

Commingling is probably the number one reason home businesses that get off the ground crash. Become a dictator in this. Your wife or neighbor cannot use your business tools. You cannot use your business postage for personal correspondence. Your business banking should be separate from your personal banking. Use a debit account. Get a debit card to use for all business purchases. Use the statement as your record of transactions. This is simpler and easier than saving every last receipt. If you take online payments, put the money in this account. When you pay your employee (you!), transfer the money from this account and document it.

Note that this can work the other way round. If you use personal funds for the business (and most of us do when starting out), keep track of this in the form of a loan to the business. The business owes you this money. Pay it back.

Items with a dual purpose- your car, with business and personal miles- have to be tracked when they are used for each purpose. Think of it as a leased arrangement. The schizoid business side of you is leasing the item for the business from the 'other' you. You have to keep track. For a car, write down business miles. For office space in a house, know the square footage as a percentage of the whole house. This is how the IRS is going to look at it. Don't commingle.

Documentation is key. You have to be able to prove to the IRS where the money went. But even more than this, you will be mining the same information to make wise business decisions.

"Should I buy paper in bulk?" Well, how much have you bought in the past, how much did it cost you and how long did it last? This

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