“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.” – Dave Ramsey
We all have our own different levels of financial literacy and especially if you’re an entrepreneur, it’s a critical skill to study and master. Financial literacy is pretty easy to develop … with a little bit of time and patience.
In fact, becoming financially literate is absolutely one of the best money management tips available to you. It’s one of the most valuable skills you can learn so that you can better understand how to spend, save and invest money throughout your life.
Financial literacy is also a powerful tool that every person should use regardless of socio-economic standing, age, race and gender. In fact, people say that managing money is 90% behavior and 10% head knowledge
When it comes to business, most of the time, it can be difficult to keep in mind the bigger picture. At times, running a business can get so focused on the sales and the work that we actually lose track of the happiness. But the reality is that we’re happier when we have a handle on our money, so let’s take a look at how we can make sure we are on track with financial literacy.
Here are three basic tips on how to better manage your finances so you can become a more successful business owner and simply enjoy your life more:
1. Don’t Spend Money You Don’t Have
If you’re running a business, one of the most exciting things about it is making money. But as tempting as it might be to spend that money before it’s yours, resist the urge! Make sure you have the funds in your account before you make a purchase.
Keep track of where your money is going. Without being aware of where your dollars are being spent, it’s easy for things to slip through the cracks and for small expenses to add up quickly. Once you know exactly where your money is going, it becomes easier to identify places where you could save more and spend less.
2. Only Buy What You Need
It’s really easy to get caught up in the excitement of owning a business, but don’t let that excitement distract you from the important work at hand—like spending money wisely. If you want to build a successful business, you need to think carefully about your purchases and only buy what you actually need to further your business goals.
Practice mindfulness with your purchases. Before you buy something—whether it’s a new pair of shoes or a cheese pizza—think about what you’re getting out of the deal. If you get the pizza, will it make you happy? Will it help you live a healthier lifestyle? If you don’t get it, will you regret it? Try to make sure that every purchase serves a purpose in your life, rather than just being something that looks good in the moment.
3. Plan Ahead
It’s always important to have some idea of where your money is coming from before you spend it—and when running a business, that becomes even more critical. It’s not enough to have money now; you need to think about how much extra cash flow will come in
Remember, if you manage your money, your money will manage itself. That was the advice of Warren Buffet, an American investor who is on the list of billionaires around the world.
And, always keep in mind that managing your money well is not just a means to an end—it’s a fundamental part of your overall financial health. As personal finance guru Suze Orman says: “If you don’t have your finances under control, you don’t have control of your life.”
Don’t let this be you—and no matter what stage of life you are in or what your goals or challenges may be, think about the advice I’ve shared and make the changes necessary to make good financial management a habit for life. Start creating a better financial future for yourself!
