It is important to always plan for the future and expect the unexpected, especially when running your own business. One way to be ready for anything is by building up a small cash reserve that can be used in emergency instances, or as a nice bonus for yourself at the end of the year. If you are struggling to make ends meet at the moment, go ahead and bookmark this page. Implement the following suggestions as soon as you can to better set yourself up for the future.
1) Make it your resolve to start putting aside a little bit of money into a cash reserve each week, starting right now. Even if it is just a little bit, putting aside a small something will get you in the habit of saving regularly.
2) Total your monthly expenses. Using that number you should be able to estimate how much money you will have at the end of each month. Put as much of that into savings as you can. If you are still not in the black, go ahead and plan for when you are. Even if you have debt in other areas, if you have extra cash at the end of the month, consider it savings and put it in the piggy bank.
3) If you have another source of income take a small percentage (think about 5%) of it as well and add it to your reserve fund.
4) When you pay yourself, take a portion of that and put it into your savings. Putting even $25 or $50 in regularly will quickly add up.
5) Make this fund separate from your tax fund and be sure to store up money in both. You won’t want to get caught at the end of the year having to use all your extra cash to pay taxes. Make sure you are setting aside a decent amount of money to cover taxes each month and to save.
6) Avoid unnecessary expenses. If you think you need something, give it a week, or even a month, before you make the purchase. You may find you didn’t really need it after all.
7) Look for ways to reduce, streamline and eliminate. You may be surprised to find areas where you can reduce costs, ways of streamlining business tasks you never thought of, and a whole list of non-profit generating expenses that can be done away with.
8) Examine the money you owe. Figure out what debts have the highest interest rates and aim to remove or refinance the most expensive lending.
Saving money is difficult for many. It takes determination and drive, but having an emergency fund to draw on is most certainly worth the effort.