Entrepreneurship comes with freedom and flexibility making it exciting to take the leap of faith. As you find success, you also find new challenges: new level, new devil. With so many balls to juggle, like visionary, sales, marketing, the list goes on, financial goals can be put on the back burner. So it’s not surprising that many entrepreneurs neglect saving and investing for their future. To help you navigate the wild world of entrepreneurship I've picked 3 financial areas you shouldn't neglect:
#1- Set money aside for taxes.
Depending on your type of work, cash infusions into the business can ebb and flow making it difficult to predict your total income. It’s a safe bet to set aside 30% of your business income for taxes purposes. If you don’t pay enough taxes throughout the year, you can be charged a penalty by the time you file. It’s important to explore paying quarterly estimated taxes. Click Here to learn more from the IRS website.
#2- Save for yourself
As your business becomes profitable, it’s difficult to lift your head up out of the day-to-day hustle because as we said, new level, new devil. Many entrepreneurs reactively manage their personal finances. A great rule of thumb is to set aside 15-20% of your earnings into an account dedicated to Future You. I would recommend opening a completely separate account so the funds are separated from any business needs. It’s common to reinvest profits back into the business but you need to take control of your future and do yourself a solid. If not you then who, if not now then when? Am I right?!
#3- Invest in yourself
Set a financial goal for yourself and get specific. If you don’t have an emergency fund, start there. You want to have 3 to 6 months of your monthly expenses set aside in cash in the event you run into an unexpected expense. If you can invest for a longer term goal, a goal that’s 5 or more years away, you should look to the stock market for investment opportunities. If you want to save for retirement, be clear on the amount you want to contribute this year. If you want to save for a future goal like a bigger home or home renovation, let’s get that started! Leverage the stock market so you don’t need to work harder but smarter.
When you take control of your money, you take control of your life. Want to learn more about the stock market? Start Here