When we talk about starting a business, or even launching into the planning and brainstorming of ideas that goes into starting one, we typically always have the discussion about how we are going to pay for the thing. Sometimes, we have an idea and the financial means that we can bootstrap it. Other times, we end up doing what feels like begging to an angel investor for large amounts of cash, and selling part of our idea off to get it that investment. When we are looking to be an entrepreneur, we need to realize that a big part of this game is to be on point personally, money-wise, before being able to succeed well in a business.
Old Habits Die Hard
This statement may not seem like a universal truth, but it is certainly a truth that applies to many things. One of these "things" that being on point as far as money managing goes, is something that investors and business owners all around the world are starting to notice - and money habits tend to reveal certain personalities and stabilities. There are some money habits of the people born in the 80's and going forward, that are downright embarrassing. (Of course, I've noticed that the ones coming right after this aren't doing much better.) If this whole group doesn't get a handle on the personal pocketbook, then we can expect businesses to run into the same problems.
One of the biggest things I see in today's world is that so many people have no savings. There seems to be little planning for either the future or emergencies. When I say that people do not have savings, I am not referring to having a retirement account, 401(k), or life insurance. No, I mean that many people do not even have so much as a savings account or an empty coffee can under the bed. What is the Millennial's savings account, you ask? The credit card. Can we start to see an alarming trend here?
Save More Than You Think You Should
If we are going to learn anything from those who have built successful companies, then we should probably get going on some of these savings habits. The very first money habit that we need to make sure we are on top of is making dang sure that we have an emergency fund. There should be a rainy day fund for any type of emergency, because an emergency will show up sometime. Financial analysts typically recommend that you have somewhere between three to six months of income saved. If you can save enough right now for one month of income, then you are better off than you were before. If you save for nine months of income, then even better, and so on. This habit just makes sense and is the right thing to do.
Plan For the Big Stuff
Another thing people seem to be doing is not planning their big purchases. If you are buying a car or going to Italy on vacation, take time to plan for it. If you are apt to spending this money on a whim the night before you go, then you'll end up racking up plenty of credit card debt. If you actually plan these vacations and make sure that you have the money to cover it, then you will save yourself and your credit score in the long run. Don't make the mistake of saying, "I will just pay it off later."
Set up some good habits for yourself now, and make sure you prioritize these goals and stick to them. If you are not willing to sacrifice now, then when the grind hits on your business, or family, don't be surprised when your personal house of cards falls.