Are you a small business owner? What about an aspiring entrepreneur? If so, then you need to get your personal finances in order.
These four money moves we discuss today will help you make the most of your money so you can focus on what matters, growing your business and becoming successful. Ultimately, these tips and tricks will bring you peace of mind, ease, and confidence as you manage your money.
- Invest Smartly
Most people do not know how to invest responsibly. It doesn’t have to be hard, yet millions of people overcomplicate it and do more harm than good. In its simplest form, investing is the single greatest way to generate long-term wealth. To start, you need to invest in assets that are safe and grow overtime. Investing is not a get rich quick scheme.
It requires patience, focus, and a little bit of research. If you are struggling to figure out what to invest in, then consider utilizing Motley Fool Stock Advisor. This service will help you pick winning stocks and will remove the headache of investing all together, as they offer you tailored insight into safe assets. Sit back, relax, and watch your investments compound overtime.
- Follow a Simple Budget
Following a budget is the best thing you can do as you continue to run and grow your business. Your personal budget needs to include your monthly expenses, loan payments, and retirement contributions. Try using the 50/30/20 financial budget. Here is how it works.
- Spend 50% of Your Monthly Income on ‘Needs.’ This includes rent, utilizes, and food.
- Spend 30% on ‘wants.’ Think of this as eating out, entertainment, or travel. These are things you certainly don’t need, but you want.
- The last 20% of your monthly paycheck needs to be stashed away into your savings account.
As you can see, this budget is simple yet effective. It helps you allocate your budget, monitor your spending habits, and save money. This budget is used by millions of people around the world and continues to grow in popularity.
- Improve Your Credit
Undeniably, your credit score matters. It matters even more if you are a small business owner. Why? Your credit score is what business lenders use to decide if you are ‘creditworthy.’ It helps them set interest rates on your business loans (if you need one).
Unfortunately, most people have a low or poor credit score. Credit repair software can help you increase your credit score. It will sift through credit report line-by-line identifying negative items ripe for dispute.
Did you ever miss a payment? Defaulted on a loan? If so, then these will all appear as negative items on your credit report that need to be removed. Once removed, your credit score will increase.
- Separate Personal and Business Finances
This is where most small business owners fail. The first thing you need to do is separate your personal and business finances. The last thing you want to do is dip into your retirement savings to fund your business, which is common amongst entrepreneurs.
To separate your finances, make sure you create a business bank account, file for an LLC, S-Corp, or Inc, and set up utilities in the company’s name. This will ensure you do not mix up your personal and business finances.
Wrapping Up: Four Money Moves Entrepreneurs Need to Make
As you can see, these money moves are not complex nor are they hard. In fact, entrepreneurs can employ these strategies overnight. These finance moves will help you preserve your wealth, protect your family, and protect your business.
Remember, the earlier you can employ these the better. It becomes more complicated once your business grows and you are used to have both your personal and business finances intertwined.