If you are an aspiring entrepreneur or looking to start your own business, you will need all the money you can get your hands on. The last thing you want to do is spend money when you don’t absolutely need to. You pretty much want to save as much as you can and put a significant money aside for your business capital. For every aspiring entrepreneur, here are 8 financial hacks you should know.
- Use cash
The world right now is very much a cashless society. Most people hardly carry around cash because frankly, it is more convenient to use your debit card or credit card and be done, right? Wrong. Actually, you are more likely to exceed your weekly/monthly financial budget when you use your card. It is the hard fact. It’s the act of almost blindly swiping away and instantaneously forgetting that you just spent £200 on that bag you didn’t really need to buy. Using a debit/credit card makes you less likely to feel guilty about a purchase you have just made because you don’t physically see the money leave your account. To stop this from happening, use cash instead. Take out the cash you need for the week and leave your card at home. This will force you to spend only what you have in your purse and make you spend less.
- Stay away from contactless
Contactless is the new buzz word around card payments. Just tap your card to pay. No pin, no swiping, no hassle. It is that easy. Yes, it is innovative and revolutionary. But it may also cost you more in the long run. Using contactless means, you are prone to spend more because just like swiping you don’t physically see the money leave your account. While most banks place a limit (in the UK it is about £30) per transaction, a lot of people spend unnecessarily using the new tap to pay method. To make matters worse, if your card is stolen, you could lose a lot of money before the bank is able to deactivate the card. So, think before you tap!
- Keep hold of your shopping receipts
If you are like most people, then you probably throw away all your receipts the minute you get home from a shopping spree. Well guess what? It is better to actually keep hold on to your receipts and look through them at the end of the month. This will help you keep track of your monthly expenditure and give you a rough idea of how much you spend on miscellaneous items. Who knows, it may potentially help you kick that incessant habit of impulse buying.
- Have a separate current (checking) and saving account.
This is an old and tested hack which has proved effective in helping people save money, and it is all about having two separate accounts. The first account- which is your current should be used for day to day expenses, including to receive salary and wages etc. While your second account- the savings should be used exclusively to save money. With the savings account, you should have limited access to it to discourage you from using money saved. Generally, you should instruct you bank to transfer a certain amount of money to your savings account every month, instead of physically doing it yourself. That way you won’t be tempted to spend the money or hesitate to transfer it once your pay cheque comes in.
- Make a physical note of all your debit/outgoing orders
At one point or another most of us have signed up for membership at clubs, charities, associations and groups. We are often lured in by the ‘inexpensive’ rate which seems affordable at the time because it is only £3.99 per month. But after signing up to ten such charities or clubs, the cost eventually starts to add up. And before you know it, you are paying £50 per month for various sundry club memberships. To help you deal with this, make a physical note of all your debit orders to help you stay on top of your finances. This way you will know how much you are spending on membership fees each month, and which ones you need to unsubscribe from.
- Reassess your debit orders every 6 to 12 months.
It is common for people to lose interest in a membership only sport, hobby or activity after a few months of joining. Members only forums generally take a monthly or annual fee which gives patrons access to the platform and services offered. However, many customers find that they are no longer interested in the services offered or cannot afford them. But because they are not quite on top of their finances, they end up paying monthly membership fees for services they don’t use. A good example of this is gym membership. Many people pay for membership at gyms, but don’t go. Rather than paying this fee, cancel your membership and try to find other ways to keep active. This will help you save money and cut down on unnecessary outgoings. To stay on top of your finances, reassess your debit orders every 6 to 12 months. You never know when you will find an outgoing payment order of £1.99 for a magazine you stopped reading three years ago!
- Have a reminder on your phone calendar to cancel “30-day trial” periods.
Many of us have tried a 30-day trial promotion- where the first 30 days is free and from then on, a standard auto-renew payment is activated. 30-day trial promotions are often a good and cost-effective way to test out a product or service to see if it is something we would like to continue with in the future. But the dangerous thing about such promotions is that many people forget to cancel their membership at the end of the trial period (that is if we do not wish to carry on) and this can land us in a sticky financial situation. To avoid this, place a reminder on your phone calendar to cancel product trial periods. I recommend cancelling it up to 1 week before the end of the trial date to give sufficient time for your request to be processed either by your bank or the service provider.
- Attend free financial seminars
As an aspiring entrepreneur, you are probably on the hunt for business and financial seminars to gain ample knowledge about starting a business and garner advice about making your business grow. But before you make a huge financial commitment that may dent your savings by £500 (for a 1-week business conference), surf around the internet for free seminars hosted in your local area. Often, leading business associations and financial coaches will host a free seminar to ‘test’ the material and see how receptive the audience is before they go on and charge for it. The advice and coaching given at free events is replica (just condensed into 1 day) to what you would get at 1-week business conference. You can find information about free business seminars in local area on forums like Eventbrite or other local listings.
Photo Credit: Finance
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