Wealthy entrepreneurs didn’t get that way by being bad with money. In both their business and their personal lives, they take their finances seriously.
Whatever your own financial situation, you can improve it by paying attention to how well-off entrepreneurs live and work. Learn these 10 financial habits from wealthy entrepreneurs:
1.Living Within Your Means
The most successful entrepreneurs don’t spend more than they make. They avoid making unnecessary purchases, which they know can bury them in credit card debt.
Some debts function as investments, such as buying a home or starting your own business. Overspending leads to unhealthy debts, which only drag down your finances. Spend less money by:
- Cooking at home instead of eating out
- Buying a used car instead of a brand new one
- Reducing discretionary purchases, such as toys and gifts
- Using alternative transportation, such as bicycling or riding the bus
- Actively looking for ways to reduce costs, such as home-efficiency improvements
Once you’ve adjusted your personal budget to fit your means, you should start setting aside some money. Saving even a little bit each month can help you make big moves in the future, like going back to school or buying a home.
Some savings strategies are as simple as swiping your debit card. Choose a card that rounds each purchase to the next dollar and automatically deposit the difference into your savings account.
The sooner you start investing, the higher your financial ceiling. While it’s never too late to get your finances together, many successful business leaders began as young entrepreneurs who invested early.
Investing your money is riskier than simply saving it, but you’ll never see double-digit returns unless you put money into the market. Remember to diversify: Entrepreneurs rarely put all their eggs in one basket.
Goals give you something to work toward. Entrepreneurs challenge themselves: Set tough financial goals for yourself so that you’re motivated to spend carefully and save frequently.
Your financial goals can be anything from getting out of debt to saving up for a food truck. Whatever it is you want, lay out the steps you’ll need to take. Get an accountability partner, like a spouse or trusted friend, if you can’t seem to stay on track.
5.Not Being Scared of Professionals
Turning to a financial advisor might seem like a sign of weakness or incompetence to some. IN fact, even the wealthiest entrepreneurs consult these professionals to make sure they’re making the best decisions. Sometimes, a second pair of eyes can make all the difference.
Don’t be afraid to schedule a meeting to take a look at your finances. Getting expert advice never hurts. In fact, it could keep you from making the sort of financial mistake that haunts you for years.
6.Knowing the Value of Hard Work
Something entrepreneurs have in common is that they worked for every penny they have. Many of them scraped by for years before hitting it big.
All the fancy accounting tricks in the world can’t make up for a strong work ethic. When you understand the role of hard work, you’ll put in that much more effort to protect your wealth.
New financial regulations and instruments are rolled out all the time. While certain best practices don’t change, staying up-to-date with trends, types of accounts, and financial services available is key.
Entrepreneurs become wealthy by innovating. In other words, they’re constantly looking for new and better ways of doing things. Staying ahead of the curve can help you get in on the ground floor of new investments, as well as spot disasters like recessions before they strike.
8.Avoiding “Lifestyle Creep”
“Lifestyle creep” refers to the fact that many consumers spend more as they earn more. The trouble is, this amounts to treading water.
When you get a raise or a bonus, your first thought might be to spend it. If you’re thinking like an entrepreneur, however, you’d either invest it or save it for a rainy day.
Even as their income climbs, wealthy entrepreneurs work to keep their costs in check. Many of them live like “normal” people, despite the fact that they could live extravagantly.
9.Surrounding Yourself With Smart People
Why do entrepreneurs join mastermind groups and other peer organizations? Because surrounding yourself with smart people can make a world of difference.
If the people closest to you encourage bad spending habits, those will eventually rub off on you. Networking with positive and influential individuals can have the opposite effect: inspiring you to achieve your financial goals, rather than holding you back from them.
10.Investing in Personal Growth
Your finances are an extension of you. If you’re not taking care of your physical and mental well-being, your earnings potential will be limited.
The world’s wealthiest people are constantly working to improve themselves. Entrepreneurs like Mark Cuban and Warren Buffett spend hours each day reading. They exercise daily, eat right, and know when to take a break.
Self-improvement comes in many colors. You could take an online course, develop a new hobby, or start a side hustle. If you’re not sure where to start, think back to your financial goals. If you’re saving to buy a house, for example, perhaps you should brush up on your home improvement skills.
America’s entrepreneurs are excellent models, but only you can commit to changing your personal finance habits. Building wealth is all about discipline: Take it one step at a time, and you’ll be there before you know it.