Money Management Advice for First Time Entrepreneurs
The term entrepreneur is thrown around a lot these days. As it should be. More and more individuals are moving away from the typical nine to five workforce and carving their own path in life. Entrepreneurship is fun but it’s far from easy. One of the toughest parts about being an entrepreneur is money management.
When you choose to pursue a career as an entrepreneur there will be slow months. Lots of them. With slow months you’ll likely be tight on cash which means it’s imperative that you develop diligent money management habits. If you’re just starting out here’s some money management advice that will help you stay afloat throughout your career.
When it comes to managing your finances it’s very easy to lose track of your accounts. That said, it’s easy to become disorganized very quickly. When it comes to managing your money you want to do whatever it takes to stay organized. That way you can easily track your progress and make changes wherever necessary.
First and foremost you should try and utilize digital accounting solutions like online invoicing and expense management. These platforms allow you to keep accounts receivables and payables organized and in the cloud. Once you find the right online payments solution then you should run quarterly check-ups on your finances. See what works what doesn’t and always look to improve.
Save Whenever Possible
Odds are your first venture won’t be a smashing success. That said if you’re an entrepreneur you’re going to have to delay gratification. Saving money is hard because it’s hard to know where to save. The best thing to do is look at your spending habits.
For starters map out a typical week of spending for yourself and categorize expenses as “must haves” and “nice to haves”. For example rent and food are must haves. The newest pair of Nike’s is definitely a nice to have. After you’ve budgeted for your must haves try to save as much of the excess cash as possible since you’ll never know when you need it.
Stay On Top of Your Credit
It’s estimated that about thirty percent of individuals don’t know their credit score. Maintaining a stellar credit score is a very important task in money management. Good credit will help you apply for loans, open accounts, finance your startup, and even buy homes. On the contrary bad credit can be absolutely detrimental to your finances. There are plenty of places to check your credit score for free and even offer you tips on how to improve it. I personally use NerdWallet to stay on top of my credit score.
Utilize a Mentor
The best money management advice I’ve ever received was to find a mentor. As entrepreneurs we’re often told to surround ourselves with people who are smarter than us. If you’re always the smartest in the room how are you going to grow? Find yourself a mentor who has the financial foundation that you desire. If you want to become a billionaire, go find one. If you want a stable job and a small apartment go find someone who has it.
In addition you don’t need to limit yourself to one mentor. In fact, the more you have the better off you are. My first mentor was my father. He is a self taught and very savvy investor. From a young age I was able to develop a strong foundation and sense for investing thanks to him. My father is still very much a mentor to me and you better believe I have more than one.
Managing your money is both a trying and rewarding experience. You will hit a wall. You will pull your hair out. You’ll probably want to give up. If you have any of those experiences just know that you aren’t alone. If you’re an entrepreneur just starting out I strongly recommend taking the advice above to heart. You won’t regret it.