If you follow this blog, you know that I preach that you must start saving aggressively while you are planning to start a business. I am always thrilled to hear about ideas people have for a business, but the bottom-line is people who have savings/assets have options for starting a business. No savings = No business. I realize that if you are living paycheck to paycheck, you might feel like there’s no possible way you can start saving 30-40% of every paycheck for the next 12 months to get ready to start your business, but here are 9 tips you may not have considered to save money to start your dream business.
Cook at home and bring your leftovers to work for lunch. You’ll save money, get a healthier meal, and spend more quality time with your family. Look for free recipes online and start cooking!
Go cash only. If you don’t have the cash, you don’t buy it. If you stop using your check card or credit cards to pay for everything, it’s much easier to stick to a weekly budget for yourself.
Avoid 90 days, 6 months or 1 year – same as cash deals. If you do not have the money the day you are making the purchase, chances are you will not have it in 90-days, six-months or a year from when it’s due. Keep in mind if you can’t pay, the interest rate is hefty and is compounded back to your original purchase date.
Drink at home. Stay out of the bars. Drinks are much cheaper when you pour them yourself. Alcohol is much more economic at the liquor store than at your favorite watering hole.
Pay your mortgage twice a month to reduce payments. It is the accelerated payment program. Your mortgage company or a third party vendor offers this service for a low or no fee. The money will be automatically debited from your bank account. An extra mortgage payment is made each year; you can reduce a 30-year mortgage to a 22-year mortgage.
Keep driving your car. Drive your car until it stops running. As a new business owner, you can no longer afford to upgrade your vehicle every two to three years. Buy a reliable car and take care of it, so you can ride without a car payment as long as you can. Try to plan your days so that you can do lots of major errands on the same day to minimize gas and parking expenses.
Grab a sweater. Turning down your thermostat five degrees and keeping a throw blanket nearby to save money on heating costs. The American Council for an Energy-Efficient Economy (ACEEE) says that for every degree you lower your thermostat, you’ll save about 3% of your heating bill. Putting your thermostat on a timer during the workday or while you are asleep will have an even greater effect on your heating bills.
Turn down the hot water heater. Heating water is the third-largest portion of the typical family’s energy bill. Heat water to 115-120 degrees to reduce power consumption.
Cut back on Starbucks, Dunkin’ Donuts, and Netflix. The money you spend each week on unnecessary extras can really add up. Treat yourself only once in a while. You’ll be shocked how the money you save will add up.
When you get started in business, you need three pools of money – an emergency savings, budget to run your household, and working capital to launch your business. If you employ these simple money management tools, you will have the money you need saved in no time.