If you’re like most people, you spend what you earn. Never leaving anything for the future. That was a problem when you were an employee. Now that you own your own business it’s much worse. You have to deal with the good months and the bad.
You will notice that your business has one or two really bad months a year. It’s different for each one, but you opened your own business to have some financial stability. Financial stability comes from having money not generating it
What does that mean? It means that if you rely on the money that’s coming in, and for some reason, it doesn’t come in you have a problem. It’s better to solve these problems before they show up.
If you pay yourself first, you will get used to spending less money because you have less. That money will grow (if you invest it right) and provide you with the stability you need.
How much should you put aside?
Like exercise, you need to start slow and build up. If you start off with 20% or 30% you will quit. If you start small with 5% you can keep it up longer. five percent mans just skipping a few colas. In time you will be able to push it up to 10% or more. The important thing here is to get started. Even if the amount seems silly.
How to invest
You need to think of two different investments, one is a backup and one is for your future. The backup savings are in case something happens and you need that money. that could be good or bad.
Let’s say some unexpected expense comes up like a car breaking down. Or some new opportunity comes along. If you don’t have the money on the spot you’re screwed in both cases.
Your future savings is for your future. You have to control yourself because nothing should cause you to take that money. No matter what happens that’s what your backup is for
I hope you found this post helpful, if so like it and share it with your friends. And while you’re at it, check out my ebook ‘level up your business’ a guide to starting your own business the right way.