For an entrepreneur starting their business or focused on growing their business, personal savings are always at the bottom of their list of concerns . However, it is important to think about this fundamental factor for the financial health and future of any person from the beginning.
When we are our own boss, there are no bonuses, bonuses or paid vacations. And then it becomes more complicated to save for contingencies . Nor do we have a guaranteed retirement, since contributions to the Retirement Fund Administrator (Afore) are no longer automatically deducted from our salary. And this concern becomes even more urgent if we take into account the crisis that pension systems around the world are already going through.
That is why today we want to share with you seven savings tips for entrepreneurs. Although it is not an impossible mission, it is a plan that requires discipline, perseverance and commitment to your goals . Take note!
Tip #1
Separate your personal accounts from business accounts . This means managing a variety of bank accounts, debit and credit cards, and checkbooks. Also, avoid using the company’s petty cash to get out of trouble and pay for your own expenses, such as meals, taxis or items for your home.
Tip #2
Make a personal budget and stick to it . It is common that, during the first years of the business, our personal income is diminished. That’s why it’s important to be clear about the money you’re really going to have every month, cut unnecessary expenses and leave bigger projects , like home remodeling, for later.
Tip #3
Set yourself a salary. Even if you are the founder, and even when you work alone, it is essential to have a fixed income that allows you to meet basic expenses, such as the rent of an apartment or your children’s school. These funds can come from savings reserved for the first months of operation, from the first contracts with clients or from the initial investment of all the partners for the start-up of the business.
Tip #4
Do not use your personal card for business expenses . Many entrepreneurs have a habit of doing this and then repaying the money to their personal account. But in addition to the fact that this is not very practical, keep in mind that the Tax Administration Service (SAT) establishes a maximum limit of $2,000 pesos for cash payments.
Tip #5
Save from minute zero. With your accounts in order, force yourself to set aside a small amount each month , even if your salary isn’t very high yet or the company doesn’t have significant profits to share. This will strengthen your financial discipline and allow you to gradually build up a contingency fund.
Tip #6
Hire a savings plan with investments . When your income increases, look for an option of this type to allocate a fixed sum of money per month to an investment instrument , such as a fixed or variable income fund. Today there are very interesting options of this type on the market, which can allow you to collect money for a certain period of time to meet a goal, such as buying a car or down payment on an apartment.
Tip #7
Start saving for your retirement as soon as possible. As we already mentioned, when you no longer work in a company, you do not have an automatic deduction of your salary for the retirement savings account. So, your option is to continue contributing to your Afore voluntarily , or if you never had one, open an individual account. Approach a specialist in this type of savings instrument and choose the most convenient option for your future.
