Not every type of budgeting suits an entrepreneurial context. there are different approaches to do a budget as an entrepreneur that will allow bringing value to your life while keeping you organize for growth.
If you are an entrepreneur, chances are one of the reasons you started this incredible journey of putting your ideas out there, grinding and doing the work is “That you want to do Things”.
You are that person who is on the “exploration of meaning and doing work that changes the world”. However, we know the first step to do things is to understand what you want to do and then plan it to achieve it. Right?
Well, that is precisely why it is essential as a businessperson to learn how to plan money “Budget”. It gives your goals and desires an economic structure that allows you to achieve them. However, No every money planning or budgeting is suitable for an entrepreneur.
Some budgeting strategies that don’t take care of your purpose, ideas and desires as a person, shouldn’t be used by an entrepreneur. The “one fits everything” budget strategy rather than helping you build the life you want, will stress your relationship with money and believe me, that’s not another stress you want to add on the list.
So, in order to bring happiness and to have your life purpose as the main spin of your budget, you’ll need to follow these steps:
1. Base your goals on your happiness
Yes, that is right, simple but Juicy!
The first thing, to plan your money as an entrepreneur is to think about the things will actually bring value to your life.
Your money should be driven by your personal interest and drive you to the person you want to be. On that sense, you will need to base every goal maximizing those ideas and purposes to be every day happier.
2. Set clear goals for your money
Goals are essential to determine whether you need to incur on an expense or not. If the expense doesn’t align with your goal, probably you don’t need that thing.
Setting up goals may seem difficult at the beginning but becomes more and more comfortable with the time.
The W.E.A.L.T.H goals that I teach within my community consider everything that I financial goal with purpose should have to build wealth while being happy.
You need to create goals based on your Wishes and what you Expect from your money. They also should be Achievable and have a specific Length to evaluate, as well needs to consider Hazards over the time to have constructive feedback.
3. Build categories that equal Bank accounts
Great! Now we are ready to start filling up the budget template!!
It is reallyyy important you think since the very beginning on having a structure for your money within your bank.
The only way to give this structure is by having different bank accounts that actually belong to one of the categories you have in your budget.
The accounts/ categories on your budget that you may want to consider as an entrepreneur are:
- Your business
- Household
- Personal development
- Shopping
- Travel
- Shared account (*Perfect accounts for couples)
- Emergency fund
The more structured, the easier will be for you to manage your money.
A. Consider your business as an Investment
Now, above I’ve detailed as the first category, your business. exactly!
Our business, our babies! We need to take care of them. However, if we do it with a plan and controlling the steps, we will end it up with freedom of money cashflow from our side as a business owner and a cashflow certain for your business.
What I mean by this is, that you should plan every Investment on your business and record it as such to recognize the money going in your business to give it structure and accounting basis for the future.
B. Have an Emergency Fund
Depending on your particular situation, you may want to save more or less of a total amount that allows you to face difficulties.
So, an emergency fund is just exactly that, a fund that will support you in difficult times and as such it should be there always ready to help.
Start by saving 3 months of your total expenses, then increase by 6 months, so in any emergency case, 6 months is a decent amount to work your situation out.
And, please remember this fund needs to be top-up every time after been used.
If you want to have a clear picture of how this is done, join the Budget as entrepreneur experiences now.