October 18, 2016
As a young entrepreneur, you may be overwhelmed by the expenses involved in so many different business ventures. After taking out loans to sustain your business operations, you are considering the option of getting a credit card. However, you may not need to go this far just yet.
Yes, You Can Survive
You don’t have to think about getting credit cards to help with operating your business expenses or your personal expenses. Although 51 percent of Americans say they aren’t in debt, they would be wrong. Most forget to include installment loans, like student loans, which can dramatically increase your debt ratio.
With the average millennial walking out of school with over $10,000 to $15,000 in student loans, accumulating more debt right now isn’t an option. You want to make sure you’re paying off your existing debt and living a, mostly, debt-free lifestyle.
Plan a budget for yourself. If you are a new entrepreneur with ideas generating but minimal income, a budget may be the thing that’s going to save you from going under. If you know your total monthly expenses for both your personal life and business, you can prepare yourself to make that your minimum goal.
Set a realistic budget for yourself. Add in a few “personal” expenses, but be practical with the decisions you make with your money. You want to be able to save your money opposed to spending it.
Use a Debit Card
Debit card payments are becoming more frequent as people are switching from cash to electronic banking. All you have to do is sign up for a checking or debit account and you will have access to your account with a debit card. This controls the way you spend and helps you limit yourself to only your available funds.
Having a debit-card-or-nothing system setup will prevent you from spending money when you don’t need too. Avoid making the mistake of taking a credit card with you everywhere.
Start Saving Now
It’s important to get a savings account as soon as possible. The sooner you can start investing your money and saving, the less need you will have for a credit card. During both good and bad times, put away as much money as you can. Even if it’s just a small reserve, this is something that can help you in struggling times.
There is always a need for a good emergency plan for your finances. If you find that you have trouble with saving, a financial planner can help you with managing your expenses. Don’t let your pride be the reason you don’t seek help with your savings account.
Get Rid of Your Current Credit Cards
While it’s okay to have one credit card, having more than that is something you want to avoid. When you have more than one, you will be more tempted to spend the money because you have it available. This is a decision most entrepreneurs regret, especially if they use it on business purchases.
You will wind up paying more on the purchase with the addition of the APR rate and the length of time you take to pay it. Ridding yourself of all but one card can help management and keep your finances in order.
Keep Yourself Educated on Your Finances
It’s important to sit down with a financial advisor at least once a year to help you out with your finances. They are going to help inform you and keep you up to date with all of the latest trends happening in the financial world. As an entrepreneur, understanding finances to a degree will be necessary to run a successful business.
Practice on yourself at first and secure confidence in your practices as you go through them and apply them to your own life. Being debt-free is something most Americans cherish at this point because it reduces their stress levels significantly and gives them time to focus on other things.
Don’t Let Credit Slow You Down
If you already have student loans and potential business loans, you don’t want to pile up on more debt. Budget yourself, learn how finances work, and rid yourself of credit cards to help get the process moving on your financial responsibility to your future businesses.
It’s fine to have one credit card, but anything more is just going to tempt you to use it. When you have your finances in order, with secure savings, the need for a credit card will disappear completely.
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