If you’ve come back to your job after the holidays only to feel uninspired and demotivated? Wishing you could achieve a better work life balance or kiss goodbye to your nasty boss, long commute or idea-stealing colleague? Stop dreaming about starting your own business and realising that long held idea you have and start making it a reality. You can join the thousands of entrepreneurs each year who launch their own companies – but you are going to need one thing besides a great idea, and that is some start up capital. So while you work on that great business plan, you can also make some small changes to your personal finances in order to bankroll your new business.
If you do have any outstanding debt, it’s time to take a look at how you can either restructure it – consolidating your borrowing, or searching for a better deal to save money on interest payments and allow you to pay it off quicker. This goes for any unsecured debt, such as credit cards, Car Finance, store cards and personal loans. Make sure that you’re on the best deal and that you are repaying enough to make a real dent in the balance. Having an excellent credit rating will help you to secure business financing as well. Then once you’ve blitzed it, all the extra money you save can go towards getting your business off the ground.
Revisit Your Disposable Income
The money we make falls into two groups. There are unavoidable costs – your rent or mortgage payment, utilities, food and travel – the basics of life. Anything else falls into the group of disposable income, so you should revisit the discretionary spending that you have each month by going through you latest bank statement and splitting your transactions out into categories. Things like eating out, subscriptions, buying clothes online – these small treats add up to hundreds when you look at them all together. Using a money management app could help you to become more aware of what you’re spending on and help you to break the patterns so you can make savings while you launch your business.
Create An Emergency Savings Pot
At some point you’re going to have to leave your old job – with its regular paychecks – for the sometimes precarious world of self-employment. And in order to make that possible, it’s crucial to have a pot of emergency savings that you can use to support yourself if your business is slow to turn a profit or runs into cash flow problems to begin with. Aim to save at least three months worth of salary into a high interest account in case you run into a need. That way you can cover your living expenses while your fledgling business gets off the ground.
Make Your Savings Automatic
If you find it hard to save – you’re all good intentions but never seem to have the spare cash at the end of the month – you have to live by the ‘pay yourself first’ rule. Automate a certain amount to transfer from the account hour get paid into to your savings for the day after they land. That way the money is squirrelled away before you even have to think about it. If you want to add a little booster, you can even opt for card roundups, where each time you make a purchase on your card the amount is rounded up and the remainder automatically deposited into savings for you.
With a little determination and a few clever savings you can get one step closer to launching your business/