Healthy finances might seem impossible to achieve in the early stages of your business. From finding the capital to launch your company to keeping up with regular expenses, you might find yourself struggling to stay afloat.
However, you don’t need to break the bank to manage a successful startup. Below, 12 members of the Young Entrepreneur Council share their best tips for maintaining healthy finances.
What’s your best, manageable tip for healthy finances?
1. Write down your goals.
If you write down your financial goals, they stick in your brain and force you to comprehend and remember what you set out to achieve. If your goal is to save $1,000 by the end of the year, write it down and keep it somewhere you will constantly see it.
2. Aim to spend less than you make.
Spend less than you make. Get yourself on a budget, and whether it’s through saving money on monthly bills or cutting back on entertainment or electronic upgrades, make sure that expenses never exceed revenues. That way, you’ll have no chance of falling into credit card debt.
3. Set a budget.
It may seem like an obvious tip, but so many people fail to set a budget and stick to it. Having a budget will stop you from overspending, whether it’s in your personal life or in business, and it will also help you see exactly where your money is going. Don’t forget to add a spot for “savings” to your budget, too, because you should be putting aside money for that each month.
4. Prioritize saving.
No matter how much or how little you make, adjust your finances so that you are spending less than you are bringing in. Do this by setting up a budget that includes putting money away each month and stick with it. This might look like $20 into a savings account to build an emergency fund or $3,000 into a diverse portfolio. Start saving as quickly as possible.
5. Set up alerts.
If you’re bad at managing money, consider setting up alerts on your phone to remind yourself of your goals. Sometimes all you need is an extra push of motivation to save more, so if you have something reminding you to do so, it proves a lot easier.
6. Embrace technology.
Using technology wisely to manage your finances can open a whole new world. For example, apps such as Clarity Money, Digit and Stash can help evaluate areas where you may not be spending wisely. Apps like these can help identify patterns in your spending and recommend where you can save money and can even transfer money for you. In short, they can help save money and time!
7. Implement weekly ‘pulse checks.’
Financials are the backbone of any business. In my company, my finance lead and I will set up weekly standups to discuss recent trends, observations and actionable takeaways. Some weeks, our conversations are as quick of two minutes, but others will take longer. Doing this consistently allows us to keep the numbers a top priority and catch issues early on.
8. Set monthly, quarterly and annual financial management tasks.
We review all of our finances in terms of credit and cash flow monthly, review our subscriptions and data usage in the office quarterly for new services or discontinuation, and assess annually our credit cards and non-liquid assets. In this way, we are always looking for new ways of handling debt and generating lines of credit from existing credit, and reducing waste on products we are not using.
9. Stay out of credit card debt.
If you’re in credit card debt, do whatever you can to get out. That might mean living below your means until you’re free and clear. If you don’t have credit card debt, don’t start. If you don’t have the cash, you don’t need the thing. Some debt is OK, but that debt should be limited to mortgages (within your means) and student loans.
10. Always know where you stand.
The best way to manage your finances is to always know where you stand. This can be as simple as logging into your credit card and banking accounts weekly or even creating your own spreadsheets. The more you know about your finances, the less likely you are to find yourself in trouble. Be sure to be authentic and real with your numbers; this isn’t something you want to play around with.
11. Have the right frame of mind.
One of the toughest roadblocks to successfully managing your finances is the mental one. If you find yourself in a financial mindset focused on survival, it’ll be tough to make decisions that can improve your situation. Instead of trying to spend less money than you make, reframe your goal to focus on making more money than you spend.
These answers are provided by Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most successful young entrepreneurs. YEC members represent nearly every industry, generate billions of dollars in revenue each year and have created tens of thousands of jobs. Learn more at yec.co.
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