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Personal Finance Tips for New Entrepreneurs

 

If you are like many new entrepreneurs, you’ve spent your life toiling away in the trenches of the corporate world. When you graduated from college, you had a starry-eyed view of life and were excited about the future. You landed your first job working for a big company, and began your career with high hopes. The goal was to make a living while you made a difference, and create a good life for you and your future family too.

Over the years, you toil endlessly for little or no extra compensation. No matter how hard you work, your efforts are seldom appreciated. More importantly, the work is often soul numbing and the long hours become a meaningless blur. In the darkness of the true reality of the corporate world, you finally reach the breaking point and declare that you want so much more out of life. You dream of a far better future, and in that moment an entrepreneur is born.

Getting Your Finances in Order

As a new entrepreneur, you quickly discover that it’s critical to have enough cash to get the business going and keep the doors open during the initial startup months. You need a financial cushion so you can keep everything running while you go after your first customers and contracts. One of the best ways to free up the cash you need for your business is to get your personal finances in order.

Most individuals have plenty of high interest debt from open balances on credit cards. With those credit card balances come high monthly payments and outrageous interest rates. If you want to free up money for your business, you’ll want to get rid of any outstanding debt as quickly as you can. If you take out a personal loan from a private lender, you’ll be able to pay off your multiple high interest credit cards and make one much lower payment each month.

Reduce Your Housing Costs

Most people spend about one-third of their income on housing. Before you start your new company, you should see how you can drastically reduce this expenditure or even turn housing into a profit center. If you own your own home, you should consider renting out a few rooms to roommates and investing those revenues in your new startup.

You could raise even more money if you list your rooms on one of the online B&B services that specialize in short-term vacation rentals. This way, you can generate quick cash each month. If you want to take an even more aggressive approach, consider renting a much smaller, more affordable place and then you can rent out your entire home each month.

Cut Back on Your Other Monthly Expenditures

As the owner of a startup venture you realize that every dollar counts, especially during the first year of the business. It’s a good idea to take a careful look at your personal budget each month and see how you can cut back on your monthly expenditures. First, you should eliminate any and all impulse purchases. Most of the time we don’t truly need those items anyway.

From there, take a careful look through each one of your budget categories. Typically, you’ll find you can save a lot of money if you stop eating at restaurants and picking up food from take-out places. When you prepare all of your meals at home, you’ll add to your financial next egg each month.

StartUp Mindset

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