Updated: Apr 20, 2020
We recently held a Fempire Finance workshop focusing on 5 money moves to get your finances right for 2020. One of which was the 50/30/20 budgeting rule – if you don’t know, get to know.
One of the questions that an attendee asked was ‘How do I budget as an entrepreneur?’ Which got us thinking!
Whilst entrepreneur life is great, paid holiday and a pension plan do not come guaranteed, so different factors have to be thought of when looking at how entrepreneurs plan their finances.
Plan for the short, medium and long term (and the in between)
Identify your short, medium and long term goals and objectives – what do they look like? Ensure they get progressively bigger as time goes on.
Entrepreneur life can go through its ups and downs. So give yourself a goal and a deadline assigned to that goal, so if you don’t meet the goal by the deadline - you know what to do.
Build contingency into your plans
Life happens. Circumstances can unexpectedly change, and having a contingency plan that happens in the event of A, B or C can stop you from being caught with your pants down.
Overcompensate by saving more in the good months
Everyone knows entrepreneur life has its ups and downs. Some months are exceptionally good, and other months not so good. If you're having a really good month, instead of splashing out that entire month, save the majority of it to fall back for a rainy day a.k.a when a bad month comes along.
Come to terms with the fact that your financial well-being is just as important as your overall well-being
Entrepreneurs more than anyone tend to rank high on the stress – o – meter (yep we just made that up). Worries about money are a significant cause of stress.
We go to the gym, eat healthily, keep drinking to a minimum but as much attention should be given to your financial wellbeing as your physical wellbeing. Don’t forget that it is healthy to talk about your finances and how you’re feeling about them.