Additionally, any extra money you can save from reducing your lifestyle down to basic living expenses will provide you with the initial capital to get your business off the ground.
Not quite sure how to do that? Read through my top nine tips on ways to cut back and find money to start your small business.
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Switch to Paying Only With Cash
If you don’t have the cash on hand to make a purchase, don’t buy it. Create a weekly budget for all your expenses and withdraw precisely that amount of money from the bank. If you stop using your credit and debit cards for everything, it’ll be far easier to stick to your budget.
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Pay Your Mortgage Twice Each Month
Your mortgage company or a third-party vendor should offer something called an “accelerated payment program.” You can access it for no fee or a minimal amount. Your mortgage payments will get automatically deducted from your bank account. Making extra payments on your mortgage can reduce a 30-year mortgage to around 22 years.
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Avoid Same as Cash Deals
If you don’t have the money the day you’re trying to make a purchase, you likely won’t have it in 90 days, six months, or a year from when it’s due. Keep in mind that if you can’t make your payments, you’ll be hit with a hefty interest rate that’s compounded back to your original purchase date.
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Don’t Make Any Major Purchases or Upgrades
Drive your car until it stops running. As a small business owner, you can’t afford to upgrade your vehicle every two to three years. Buy a reliable car or keep the one you have and take care of it. Keep it running smoothly so you can go as long as you can without having to make a car payment. You should also try to do as many errands as you can on the same day, so you can minimize parking and gas expenses.
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Don’t Go Out to Eat
If you’re typically the type of person who likes to eat out for lunch during the week, you’ll have to change that behavior. Start meal prepping your weekday lunches on Sunday and bring them with you to the office. Not only will you save money, but you’ll get a healthier meal. There are tons of free recipes online that you can check out.
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Dress in Layers
Turn your thermostat down five degrees during the winter and turn it up if it’s the summertime. Keep a throw blanket and sweater nearby to help save money on heating costs. If it’s during the summer, check out small desktop fans that you can plug into the USB port of your computer to help keep you cool. The American Council for an Energy-Efficient Economy (ACEEE) says that for every degree you lower your thermostat, you’ll save around 3% on your heating bill.
Another tip is to put your thermostat on a timer or schedule during the workday or while you’re asleep. Don’t keep a house cool or warm if there’s no one in it.
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Cut Back on Extra Expenses
The money you spend each week on Starbucks trips and any other unnecessary expenses can add up. Treat yourself to your favorite thing once in a while instead of multiple times a week. Not only will you be shocked by how much money you save, but your treat will become all the more special when you don’t get it as often.
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Turn Down Your Hot Water Heater
Did you know that the third-largest portion of the average energy bill is allocated to heating water? Lower the temperature of your water heater to around 115-120 degrees to help reduce your power consumption.
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Get Professional Help
Accounting and managing your finances are likely not your area of expertise. Don’t hesitate to seek help from an accountant or financial advisor to get further advice on how you can improve your spending.
Manage Your Expenses to Help Fund Your Small Business
As you begin the process of opening your small business, you’ll need three pools of money: a year of funds to run your household, a year of operating expenses to start your business, and emergency savings account for your household. If you employ these simple money management tools, you’ll begin accumulating the extra money you need in no time.
Do you have any money management tips you use as a small business owner? Drop a comment below!