Money Management Tips for First-Time Entrepreneurs
How many times have you been told that saving money is a good thing? Financial specialists recommend that you save a bit of money every month, but that’s easier said than done. After all, it’s not uncommon for people to live paycheque to paycheque.
However, if you want to start a company, you will need to break away from this cycle and start budgeting and saving. At times, this will be a trying task, but it must be done if you want to invest in your future as an entrepreneur.
If you want to start managing your money more effectively and set yourself up to become an entrepreneur, follow the six tips below. With these techniques in your arsenal, you’ll start so see immediate changes, and you’ll set good behaviours in motion that’ll serve you throughout your career as an entrepreneur.
When you are organised, you can track every facet of your finances. Record all of your financial information in one place so you can refer to it and keep track of your progress.
When you chronicle all of your financial information, you may want to try to organise it by category. For example, when you are recording your current costs, you can categorise them as “urgent” and “future.” Not only will this system help you stay on top of your personal finances, but also it’ll prepare you for entrepreneurial success because it’s a directly transferable skill.
Check your credit
According to a recent MoneyTips survey, nearly 30 per cent of people don’t know their credit score. If you are among this group, it’s time to request a free credit report. Once you know your number, assuming money is tight, feel free to use a few do-it-yourself credit repair techniques to improve your score.
Understanding your credit score and improving it to the best of your ability is paramount when it comes to money management. A little-known fact among aspiring entrepreneurs is that the funding a new business receives is often dependent on the founder’s credit score.
Save where you can
People often cringe when they think about cutting back. Fortunately, there are several painless ways to save. Look at your daily habits and see if you have any spending trends. For example, if you spend N1,000 every day on a bottles of bear, you might consider cutting back and only having your bear at weekends. Slowly, you’ll get used to this new habit, and your bank account will reap the rewards.
Search for additional information
Subscribe to websites and follow podcasts that offer advice on money management. Also, keep your eyes peeled for informative outlets that speak directly about entrepreneurial finances and follow them, too.
Set long and short-term goals
Have you ever noticed that people want to reach their goals in as little time as possible? If you pick up almost any given health magazine, it’ll claim that it can help you achieve extreme results in little to no time. Unfortunately, crash diets are often ineffective, and “get rich quick” money management techniques often lack substance.
It’s hard to accept that your goals will take time to accomplish, which is why you create short and long-term goals. In either case, aim to make goals that are specific, measurable, attainable, relevant and time-based. Ideally, accomplishing your short-term goals will give you the positive feedback that you need to continue striving for your long-term goals.
Find a mentor
If you manage your personal finances and entrepreneurial finances, one thing is certain – at times, it will feel like you can’t keep up with everything. Financial planning can be difficult, and it’s not uncommon for it to feel overwhelming.
As an individual, you can seek out mentors that can help you with personal finances. As an entrepreneur, you can continue to work with these people or seek out more established financial consultants that provide you with guidance you need to run your business.
Managing your finances is a trying and rewarding experience. It will feel messy at times, but the more you practise, the more you’ll improve your personal finances and set yourself up for entrepreneurial money management success.
As a small business owner you need to be extremely frugal over how you manage your funds. Lack of or misuse of capital is one of the main reasons why companies fail today. That said, priority number one should be to save money.
While some ideas will save more money than others you need to understand that every little bit counts. If it saves money it’s worth it (generally speaking).
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