What’s most important is that you plan to make your money work for you and establish financial goals, even if you’re running a company. Here are five of the best tips financial advisors offer that entrepreneurs can apply to their journey.
Develop financial goals
If you’re not sure what you’re looking for with your
finances or how to ensure a strong financial future, you may want to speak with a certified financial planner. It may simply be a matter of putting money away each month. A financial advisor can help you build a strategy to make that happen.
Set a budget
A budget is the core of any financial plan, and for good reason. Without it, you’re like a ship without a rudder. First, take stock of your expenses, including housing costs, weekly food spending, utilities, and entertainment, among others. This will be your starting point. From there, look for opportunities to make cuts. This will likely come in the form of extraneous spending on entertainment, but don’t fear — you can still see friends and family, go out to dinner and see movies if you want. You may just have to curb spending overall.
Explore investment opportunities
Consider when you’d like to buy a home or when you’d like to have paid off your mortgage. Maybe you’ve been thinking about taking more risks with investment, or perhaps it’s the time in your life when you need to be more conservative with investments. No matter where you are on that spectrum, don’t shy away from exploring investment opportunities.
Plan for retirement
Speaking of retirement, it’s never too early or too late to look forward to a time when you won’t be working. Your early-stage venture may be an all-consuming passion right now, but that doesn’t mean you can’t lay the groundwork for a more quiet future. I’ve met many young entrepreneurs working hard to save enough money so they can retire in the 20s, 30s or 40s. Develop a savings plan specifically for retirement in an account where your money will grow without you touching it. Decide what money is off-limits and stick to that rule.
Keep learning
Financial planning can be daunting, especially if you’re already managing a business. For entrepreneurs, there are so many terms, acronyms, legal implications and steps to take. From life-insurance policies to money-market accounts, IRAs, stocks and bonds, there’s a lot to learn about. Check out different apps that can make investing and budgeting more enjoyable. Surround yourself with the right people, like an accountant or financial advisor, who can help you make sense of your current and future finances. Stay abreast of ongoing economic developments, not just in the space your company operates, but in the economy as a whole. You can do this through audiobooks, reading online or taking classes.
Try not to get overwhelmed, and take it one step at a time. Rather than looking at financial planning as a challenge, see it as an opportunity to keep learning. The state of your finances may not be your highest priority, but don’t underestimate the importance of your financial future and the potential to keep learning and growing.