7 Personal Finance Tips for Startup Entrepreneurs CareerMetis.com

7 Personal Finance Tips for Startup Entrepreneurs Running a business is not an easy task in any way. The most difficult challenge every entrepreneur has to overcome to have successful startup finance, both personal and business-related. The main reason finances are so important is that even a simple financial mistake can ruin both your business and your personal life.But to get to business finances, you must first settle your personal ones. After all, you cannot fully commit to growing or developing your startup if you’re burdened by personal financial issues. This will take away your time and your resources, and your startup will inevitably suffer for it.evalAnother reason why settling personal finances is important is that they can have an impact on your business in many ways. It’s even safe to say that personal and business financial statuses are correlated, even if you separate the accounts.In other words, if you’re not good at managing your personal finances, then you probably won’t be able to manage business finances e ither. Without further ado, here are a few tips on how to settle personal financial tips so that you can grow your startup carefree.1) Don’t Quit Your JobMany entrepreneurs grow tired of their 9 to 5 jobs and decide to abandon it all and start their own venture. This is all well and fine but running a startup business requires a lot of capital. When talking about capital for businesses, it’s not just about the initial capital required to start a business.It’s also about the capital required to maintain your business operational until it becomes self-sustainable. In other words, you must provide funds for your business until your startup starts to generate revenue and profits.Therefore, quitting your job may not be a good idea after all, at least not straight away. Remember that you have personal finances to deal with alongside your business needs. Paying for bills, food, taxes and other necessities is still a must.If you allocate all your capital to developing your business, y ou won’t have enough left over to take care of yourself. Having a job while running a business can be overwhelming but it might be necessary if you want to pull through.2) Always Maintain a Good Credit ScoreA lot of people have heard of a credit score and that this score somehow affects your personal finances. However, a lot of people also don’t have a clue how all of this works or what to do about it. In short, a credit score is technically a number that evaluates an individual’s creditworthiness â€" i.e., likeliness to repay a debt.evalSo what does it all mean? Simply put, lenders, such as banks, will look at your credit score and your credit history to determine how able you are at paying off your dues and how timely you are with your payments. Based on your credit score, lenders will decide whether or not you’re trustworthy enough or eligible at all for a loan.Here’s an example of credit score ratings and which factors affect the overall score:eExcellent score â€" 800 to 850.Very Good score â€"740 to 799.Good score â€" 670 to 739.Fair score â€" 580 to 669.Poor score â€" 300 to 579.The factors that affect your credit score:Your payment history.The total amount you owe.Length of your credit history.The types of credit you have.New credits you have.If you have a bad credit score, you can experience a lot of financial issues. Banks may deny you for a personal or a business loan, as well as charge you with insanely high-interest rates.evalFurthermore, to maintain a good credit score, you must pay your dues on time and check your credit report regularly. A simple mistake on your report can ruin your score; even more alarmingly, you could be a victim of identity theft without even realizing it.3) Look Towards the FutureWhen it comes to personal finances, financial security is something each and every one of us is looking forward to. You can accomplish this by starting to look at the future today. Saving for retirement, for example, has more benefits tha n simply ensuring your sound retirement.Individual retirement accounts The way to achieve this is to consider various opportunities you can invest in. If you ever happen to have excess capital and don’t know what to do with it, you can, of course, put it aside and save it for rainy days.However, you can also try to invest that capital and earn more income than you currently have. Every investment poses a certain risk so make sure you consider your options well before you proceed. Here are a few investment options to consider that may help you boost your incomes.a) Investing in StocksevalThe stock market is the most popular way to invest excess capital for both individual investors and entrepreneurs alike. The way it works is that you invest in other companies by buying their stocks, thus making you an owner of that company’s percentage of shares, which includes all of the company’s assets. You can, of course, buy and sell stocks at the right price or hold on to them to enjoy a dividend income.b) Investing in Real Estate:Real estate investments are beneficial for business owners mainly because you can always use the property you’ve invested in as your business premises in the future. Buying and selling properties at the right price is a good way to boost your profits or you can also hold on to properties and enjoy a rental income and tax deductions.c) Investing in Other BusinessesInvesting in other businesses is a way to not keep all of your eggs in the same basket. Having capital invested in other companies that show potential is, in fact, a way to ensure profits or an additional revenue stream. For example, you can invest through bonds, which are a form of a loan with an eligible interest rate. You can also consider venture capital and angel investingas well.evalInvesting in other opportunities doesn’t necessarily mean you need a lot of excess capital. If an opportunity seems good and you lack the funds, you can always take a loan to make the invest ment but only if you find a way to mitigate and minimize the risks of investing.6) Cut Down on ExpensesThe real personal financial issue we all have is our spending. It’s so easy to lose control over our budget when there are so many things to buy. We consider these things a necessity, whereas, in reality, they are just small luxuries that make us happy. Our spending habits are the real problem in many cases, to be fair.Take credit cards, for example. Which one among you hasn’t gone over the limit during a shopping spree at least once in your lives because you simply could? The temptation to overspend is often too great to consider the consequences beforehand. When we do overspend, we tend to pay only the monthly minimum on our credit cards or we skip a bill payment or two so that we can break even.This habit creates more financial difficulties as a bare minimum on credit cards leads to higher interest rates and more debt while late bill payments lead to additional fees. As an e ntrepreneur with a startup business on your plate, you can’t afford to be an irresponsible spender.Overspending and being late with payments is not good for you or your business. Instead, create healthy financial habits from your personal life so that you can leverage the same practices with your business.For example, automate bill payments so that you aren’t late. Also, pay off your credit card loan or at least avoid paying only the monthly minimum. Moreover, cut down on spending and buy only what you need with the least amount of luxuries.After all, you can’t just give up on everything to save money. Last but not least, consolidate your personal loans so that it becomes easier to pay off your debts and be timely about it; remember, your credit score and pretty much everything else depends on it.7) Seek Out AdvicePersonal financial issues oftentimes originate from simple ignorance. People are unaware of the potential consequences of their bad spending habits and they don’t know how to turn things around. No one will blame you for this.Finances, both personal and business ones, are complex and there’s no shame in not being able to understand what’s involved. The key, however, is in your willingness to educate yourself and in becoming more informed about the matters at hand.Therefore, don’t hesitate to seek advice. If you have a friend who’s good at personal budgeting and is a careful spender, ask them to help you out. You can also seek out professional assistance from a financial advisor or an accountant.Yes, you will have to pay for professional assistance but you can look at it as an investment where your newly-found knowledge will help you save money and spend wiser in the long run. The important thing is to learn how to manage your personal financesand how to budgetthemefficiently.Understanding how much you earn and how much you spend is essential in understanding where and how you can cut down on expenses. Being responsible with your perso nal finances can help you a great ordeal when it comes to managing business finances.Settling personal financial matters can be a long and challenging process. We all have some kind of financial trouble that burdens us.However, there’s no room for desperation, especially since you have a startup business to grow and develop further. That’s why it’s important to start managing your personal finances now so that you can fully commit to running and growing your business carefree.