Living paycheck to paycheck is a common cycle for many South Africans. People want to save but they also love to splurge. If you speak to any financial advisor, you will see that saving a portion of your salary every month is critical for a comfortable future. However, if you have started your own business or want to launch a unique concept, you need to break away from this cycle. To invest in the future of your career and your personal wellbeing, you will need to live according to a strict budget.
Here are a few tips that will help you to set good behaviours in motion and meet your goals:
- Understand the importance of being organised
When it comes to being an entrepreneur, you are in charge of your finances. You will need to prioritise planning and organisation skills in order to stick to a goal. Start categorising your savings according to your needs. For example, future and immediate goals. Once you have a plan set in stone, you will need to effectively manage and follow your progress to ensure that you achieve what you set out to achieve.
- Check your credit record
No matter where you are in the world, having a poor credit score will affect your next move. While saving and budgeting might be the long-term solution, you might want to consider taking out a personal loan to help you achieve your dream faster. Or at least lift it off of the ground. The reason why you will need to settle for personal loans, if anything, for your startup is that banks and financial brokers are wary of granting loans to small businesses. So, the minute you start working steadily towards your financial goals to kickstart your business, you will need to think about requesting a credit report. The outcome will determine your ability to apply for a personal loan, as well as how to improve your credit score.
- Save where you can
If your business concept or idea is something that you’re passionate about, you will need to make a lifestyle change and do your best to cut back where possible. There are several ways to reduce your spending when it comes to daily habits and spending trends, so you will need to make a conscious decision to help yourself. If you are already running your own business, you need to postpone personal rewards and think realistically about your cash flow. It certainly is exciting when you start to notice an interest in your product or service, but you cannot reap the benefits just yet. Do not burden yourself with salaries, employee benefits or any other traps when your success has not yet been achieved. You will also need to cut your salary and live as cost-effectively as possible to set an example for anyone who is working with or for you. Reduced cash flow is key in the first couple of years.
- Set long and short-term goals
Setting goals is effective when working towards something. Having a goal in mind will motivate you every day to wake up and do your best to be better and succeed in life. But the problem with goal setting is that people are puzzled by them. Short-term and long-term goals both take time, effort and dedication. You cannot think you’ll achieve your goals in the shortest period of time. Look at the SMART goal setting technique as this will help you achieve the feedback you need to keep moving forward.
Another tip for first-time entrepreneurs is to try to diversify your business by investing in alternative sources. Many business owners try to put all their eggs in one basket, without having a plan B. If you are going to look at personal loans, be sure to have a plan on where you’re going to distribute that money. You can look at a loan calculator or instalment calculator to see how much you’ll qualify for, and based on that, you will be able to put together a failure plan as well as alternative investment plans.
- Think about finding a mentor
Whether you’re struggling to manage your personal finances or you need some inspiration to go ahead with your business, try to consider finding a mentor during this process. It’s easy to feel overwhelmed when it comes to your finances, and something like this can dent your ego and cause you to feel inadequate. If you want to be an entrepreneur, you will need to consult with someone who can help and guide you. Much like everything in life, managing your finances take practice and time.
Managing your money for the first couple of years will be a draining process, but once you start seeing the benefits, you will also start seeing the benefits. Starting a business is not easy. There will be times when you want to hit a wall from frustration as well as give up, but you are not alone. Keep pushing through and take advantage of your support system and mentor to help keep you motivated. If you stay focused and determined, you will easily be able to reach for the stars and achieve your dream.