Great Financial Planning Strategies for Entrepreneurs
November 27, 2019 Author: Tess Downing, MBA, CFP®, Complete View Financial
Forging your own path as a young entrepreneur is no easy feat in the first place. When it comes to developing sensible financial planning strategies for entrepreneurs, there’s no exception.
Detailed below are today’s most successful strategies for planning your financial future. Taking them seriously could make all the difference between mediocrity and prosperity.
After all, consider the following statistic reported by the National Association of Personal Financial Advisors (NAPFA). It indicates that 60% of people throughout the United States don’t have a budget. If that describes you, it’s time to get things in order.
You deserve the peace of mind that comes from knowing your financial future is secure. This, though, requires your determination and commitment to wise money-making decisions. Keep reading, then, to ensure you and your family have your finances in order.
Use Self-Control When It Comes to Credit Cards
Working as an entrepreneur can be unpredictable, it’s true. Sometimes, you might be tempted to buy supplies, tools or equipment on a credit card. After all, you need to invest in your business ventures in order to profit in the long run, right?
Still, take care to use self-control when using credit cards for anything. In fact, it’s ideal to use a credit card minimally. That way, you can continue to keep up with paying it off as you go.
In addition, continue to stay informed on the wisest practices for using credit cards. The truth is, it’s all too common for inexperienced young professionals to not even know enough about credit cards. Taking advantage of any line of credit, though, is definitely something to avoid.
Don’t waste the next few decades of your life paying off extreme credit card debts. Instead, be mindful to only charge small costs like gasoline or a utility bill to a credit card. As a result, you’ll be able to both build up your credit but avoid building up interest.
Avoid Dipping into Your Savings as Much as You Can
Another key financial strategy to remember is building your savings. A credit card should only be used for emergencies, of course.
It’s even more important that your savings account remains untouched over time, though. Doing so will go a long way in ensuring you have an appropriate retirement plan.
Don’t worry if you haven’t started saving specifically for retirement, yet. For more detailed specifics, check out this article on how to start reaching for your financial goals even in your thirties. Instead, focus on establishing a savings account to which you contribute every month.
Take the time to evaluate your monthly budget. Are you setting aside enough savings to suit your long-term financial goals?
If not, don’t hesitate to save as much as possible for as long as possible. It’s in your best interest to start saving for retirement sooner rather than later.
Don’t Avoid Handling Your Taxes on Time Every Year
Every young entrepreneur is familiar with the hassle of paying taxes. Still, as tax season approaches each year, it’s important to get ahead of the game. It’s not worth avoiding your taxes until the last minute.
For one thing, you could be charged a late fee if you don’t turn it in on time. In addition, though, imagine you don’t have enough time to prepare your tax documents properly. This could result in future headaches and fees.
Perhaps you’re a self-employed entrepreneur. As difficult to navigate self-employment taxes may be, don’t avoid the issue.
If you have to hire a professional tax advisor, doing so is worth the investment. Finally, turning your taxes in on time and correct will at least keep you in good standing with the Internal Revenue Service.
Protect Your Family with Insurance
Another essential financial planning strategy for young entrepreneurs is that of having appropriate insurance policies. As an entrepreneur, you understand the value of an extensive health insurance policy, for instance. You don’t want yourself or your family to be vulnerable to high medical expenses that could slow down the growth of your new business.
Additional insurance policies might be worth your consideration, too. For instance, do you have a life insurance policy or disability insurance policy?
In the case of your unfortunate passing or disability, are your family and any dependents going to be secure? If not, begin the process of understanding your risk exposures and speak to the right professional to ensure you are properly insured.
Connect with Qualified Financial Planning Services
Above all, don’t underestimate the value of professional guidance when it comes to financial planning. By hiring a qualified Certified Financial Planner(TM), you’re investing in a long-term, rewarding relationship. Know that your money and investments are going to be put to good use.
Continue Investing in Your Career as a Young Entrepreneur
Now that you have a thorough understanding of the financial planning strategies for entrepreneurs, there’s no need to cut corners when it comes to making the most of your investments.
Of course, there are a lot of ins and outs to navigate in the world of financial planning. That’s why it can be in your best interest to seek professional guidance on the matter. It’s critical you continue to keep yourself informed of the ways you can better your financial situation.