Why is it Difficult to Manage Your Finances Well as a Start-Up?

money

Have you ever heard anyone say that they want to wake up every single day and stare at their dwindling bank balance? Especially a business owner or start-up founder? No one ever has and no one ever will. Especially if you are hell-bent on living a financially cushioned life (who isn’t?) and leading your business into profit.

It can take a lot of discipline to keep track of the finances and make smart decisions all the time. Especially, when you know that your expenses are getting out of control and you don’t have the funds to back it up – this is a common problem with start-ups.

Most start-ups face this issue of managing their finances. Someone who is new to the entrepreneurial world and doesn’t have much knowledge of money is more likely to be broke or go through a major financial crisis than someone who knows the ins and outs of managing the cash flow. Being educated and informed about personal finances is key to keeping the asset column healthy without compromising with the success or becoming mentally frustrated.

Mental agility, determination, and financial know-how helps start-up owners keep their asset column healthy. It is never a great idea to spend your hard-earned money on things that are not going to serve you in the long term – this has to be applied when starting a business as well.

Many startup founders take unwise decisions because they read about what one of their ideals do or how they live or something they are interested in. Earlier, resources were limited and there was no internet connectivity in most parts of the world, so only a fortunate few got a glimpse in the lives of millionaires. 

But now, you have all the resources and information that is required to become a millionaire; and also to follow a millionaire’s lifestyle. This can be used as motivation but most people are blinded by the shine of the diamond and forget all the hardships that made the diamond shine.

Most millionaires buy houses and expensive cars but they don’t break their savings to do so – you might want to follow their lifestyle but you also need to take the incoming cashflow into account if you are trying to impersonate the outgoing dough under the guise of a successful person’s lifestyle. They have money coming in from various investments that take care of their need to live a luxurious life and start-up owners often don’t, so, if you try to walk in their shoes, you can’t pick and choose according to your convenience.

“Our incomes are like our shoes; if too small, they gall and pinch us; but if too large, they cause us to stumble and to trip.” -John Locke

Of course, money won’t come pouring in just by knowing how to manage your finances, you will have to face the adversities and challenges that you are likely to face on the road to success. But by impersonating and walking in the footsteps of successful people, you can set up a good platform for yourself, only if you take into account the bad as well as the good.

Final Thoughts

Yes, it is difficult to manage your finances and make smart decisions all the time as a start-up. You are bound to make mistakes but those mistakes should teach you a valuable lesson. If you don’t learn anything then the difficulty can turn into impossibility real quick. Keep learning from the people who have made it but let the shine of their own car and assets blind you.

How to Create a Financial Corner for Efficient Budgeting

Family finances

Saving money becomes one of our major focuses as soon as we start working. We always look for ways to save money without letting go of our comfortable lifestyle. One of the best ways to save money is to make your finances a priority in not only your mind but your home too.

Budgeting

Budgeting is an important aspect of being wise with the money you spend. To be wise in making decisions you should take steps that ensure you have a better understanding of how money plays out in your home. 

It will also help you stay focused on the task at hand. Without distractions, you’ll be able to take a deep dive into products or services you want to know more about.

Dedicated Hours

When you carve out a regular time to deal with your bills and investments, you’ll have a better grasp of your cash flow because your mind will be completely focused on the task at hand.

Having a dedicated space where you can work on your finances will only make it easier to make this a habit you keep all year round – so that you don’t feel overwhelmed each time you have to take care of your finances. It will also help you stay focused on the task at hand. Without distractions, you’ll be able to take a deep dive into products or services you want to know more about.

Dedicated Space

Having a space dedicated to working on your finances isn’t a big deal – it can be as elaborate or as simple as you want – just make sure it’s deliberate, and you only use the space for your finances. Using the corner of the kitchen counter or the TV dinner stand that you keep near the couch aren’t the greatest choices because you will be easily distracted and not at your sharpest.

A desk in the corner of your living room works fine or even your work desk will do. Somewhere you work and don’t spend time relaxing is usually the best way to go about this – whether you’re paying bills, researching alternatives to payday loans, comparing APRs of common credit cards, or doing your taxes – this is the place where you should do it all.

Filing System

Keep this area organized, it’ll be easier to find important bills, warranties, and other documents you need – have a basic filing system. A basic filing system will let you not stress when you need something and will also give you a chance to make sure everything is accounted for. You can reach for something quickly if you need it and a clutter-free space is inviting to work.

Wall Calendar

Add a calendar where you mark important due dates, and you’ll have a better chance at staying on top of bill payments. You can have a monthly spread where you can mark upcoming payments for bills, subscriptions, and services for the month.

Final Thoughts

Creating a dedicated finance nook is a great way to be vigilant about saving, but don’t stop here. Spend some time thinking about other ways you can find extra cash in your home. Come back for more tips on how to make money to add to your saving. Once you get brainstorming, you might be surprised by how simple saving can be – all you need to do is be conscious with your decisions.