There’s a saying that states we don’t build businesses, but instead, we ARE businesses. In everything we do in life we are selling, and so, we don’t necessarily need to have a corporation in order to be a business. When you’re starting a business there’s a lot to take into consideration, but the most important is the financial section of the business plan. Without money coming in, and a strategy to keep and grow that money, a business will fail no matter how successful it’s been in the past. For that reason, in this article we will be discussing ten different mistakes that entrepreneurs make, especially if they’re starting out early in their twenties, such as getting bad credit loans Tampa.
10 Money Mistakes to Avoid As an Entrepreneur in Your Twenties
- Using up more than you make: This is not only a common sense issue, it is also a mathematical one. If you have a simple equation with one side containing everything you make, and you subtract that same amount or more, it will always equal zero or some negative number. This is the reason young entrepreneurs have no money and end up in more debt than they bargained for.
- Not keeping track of finances: Keeping track of your finances allows you to know exactly what you’re spending your money on and where it is coming from. Doing this everyday allows you to generate a very detailed picture of your financial habits. NOT tracking your finances will result in a cloudy vision of your financial status and often explodes into bigger problems such as missing payments or over-spending.
- No goals around finances: Another saying is that if an archer can’t see a target, he will always miss. Instead make sure that you have goals and reasons why you must straighten out your financial mistakes. These goals often take a long time to manifest and so the longer you wait to have specific goals, the longer you will be lost.
- Over-using your credit cards: It is okay to use credit cards as a tracking tool because everything you spend money on will be on one statement. It is not okay, however, to use your credit cards to the max when you have no money. This puts you in a higher interest-paying situation and you run the risk of having late payments which severely damages your credit.
- Not having a fund for emergencies: This is like jumping off a plane and not having a parachute. The parachute is supposed to save you from actually hitting the ground. Having an emergency fund of at least six months of income will protect you from some of the unexpected tragedies of life such as the death of a loved one, illnesses, and others.
- Believing your own lies: We often tell ourselves lies about what is actually happening with our finances and we lie about the reason why. If you believe that you can spend another hundred dollars on a Saturday night out with the boys, while your bank account is telling you you’re not capable, and you do it, then that’s on you. You believed a lie and your finances suffered for it.
- Wasting your free time instead of making money: A lot of people waste time they could be putting towards something beneficial. Browsing social media, the internet, playing games, and other time-consuming activities prevent people from creating income on the side. They would prefer to sit for hours watching movies instead of making money.
- Not saving: Once we earn money, we forget to save. Saving is not just a good habit, but it is a way to have more control of your finances by putting money aside for things that matter.
- Not building credit: Credit is so important that it should be taught in middle and high school. Without credit you can’t get an apartment, a car, a house, or a business loan. Building credit early in life is a great choice because you have more time to fix mistakes and learn how to keep your credit score high.
- Spending carelessly: Another reason young entrepreneurs fail is not because of a lack of income, but because they spend that income on things they should not.
In conclusion, in this article we discussed ten of many mistakes that entrepreneurs, especially young ones, partake in during their careers. If these can be learned prior to a young entrepreneur’s decision to build a business, such as when they’re in middle or high school, we would have generations of self-guiding leaders who can take care of themselves.
Author Bio: Douglas Pitassi is a small business blogger and freelance writer.