In reality, many people who start home businesses, do so at the risk of their savings. I know that I used up a big chunk of my reserves when I was launching my own home businesses and I’ve found my story is not at all unusual. Entrepreneurs are risk-takers by nature and it’s certainly not uncommon to find that individuals save up, or take their savings and start a business. But, now that your business is up and running, how do you start building those saving back up?
The first step is really to make saving a priority. It’s tough–family is a priority and building your business is a priority, so how do you justify taking money away from the every-day cash flow and start socking it away again? It might help to start out small–a certain amount of money put away in an IRA (Individual Retirement Account) every month can give you a place to start–and it is removed enough that you won’t be able to get to the money easily. I know one person who does things rather old-fashioned and still buys savings bonds–one every month no matter what. While this isn’t very trendy, it is one very stable and persistent way to put a little money away regardless of what else is going on.
It is tempting to invest everything in your business, or for what savings you do put away to be for your kids (college, for example), but the financial experts say that individuals need to save for themselves first. Having a retirement savings and/or plan, and putting away for the family’s emergencies are more important than saving for a child’s college, according to financial planners. And, with the risky precariousness of entrepreneurial start-ups, it is even more important to make sure there is something to fall back on.
At the very minimum, it is a good idea to have a savings account and make a plan to put money away–even while you are building a business. Designate a certain amount, or a certain funding stream that just goes to the savings. You might be surprised how little time it takes to start to rebuild your reserves and have a little cushion or nest-egg–even while you’re raising a family and building a business!
See Also: Getting Comfortable Talking About Money
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