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5 Financial Planning Tips for Millennial Entrepreneurs

Common sense and doable tips to help millennial entrepreneurs take the guesswork and stress out of financial planning.


Does the financial aspect of starting and building a business terrify you? If so, you’re not alone. Some people are entrepreneurial by nature, but that entrepreneurial drive doesn’t automatically come with the gift of financial savvy. Read on for some common sense and doable tips to help take the guesswork and stress out of financial planning – especially for millennial entrepreneurs.

 

Photo: Dana Evans, VP and Credit Administration Officer at Baker Boyer | Courtesy Photo
Photo: Dana Evans, VP and Credit Administration Officer at Baker Boyer | Courtesy Photo

1. Be intentional

That doesn’t sound money-related, right? However, being intentional with your chosen path speaks to the concept of investing in yourself. That could mean pursuing a college degree or going to a trade school or finding other ways to learn and grow. Because knowledge is the best currency.

Maybe you don’t have a clear idea of what you want to do yet, in which case going to college just to go may be a waste of your money and time. Maybe the best choice is to go out into the real world and gain some experience to help you find your path. You can also take advantage of so many free resources for learning—the public library, various media outlets, and small business associations.

 

2. Be proactive

Attack your current situation. For example, if debt is holding you back, be aggressive in paying it off. Build a budget with the goal of paying off current debt. The logical approach is to get rid of the higher interest rates first, giving you the most bang for your buck. However, seeing all your debt laid out on a spreadsheet can be overwhelming.

So, even if you knock off the smallest balance first, regardless of the interest rate, it can give you the confidence to keep going. That’s actually what I did when I was fresh out of law school and living on the decidedly unglamorous pay of a first-year associate. It gave me that little dopamine boost of checking off one of those boxes and helped me stay committed to the process.

 

3. Be prepared

This is a two-parter. Prepare for your near future by building an emergency fund. There’s no way to prevent the unexpected, like a car breakdown or a water heater that quits working. But you can protect yourself by setting aside a just-in-case nugget so those unhappy surprises don’t throw you off your intended path.

Set up an automatic transfer from your checking to your savings account, so you can’t forget or put it off. It doesn’t have to be a huge commitment, just set aside something, every month. After a while, if you don’t touch it, the next time something comes up, you can provide for yourself without going into debt.

3b. Prepare some more. This is the longer-term version of “be-prepared.” As in, retirement. If you think you’d like to retire one day, don’t put off saving toward that goal. This is not a one-size-fits-all kind of proposition.

For example, it can be tricky for an entrepreneur to save toward retirement when they need to keep funds liquid rather than locked into a retirement or other investment fund that penalizes or prohibits early withdrawals. One way to tackle this dilemma is to keep putting money into a traditional savings account until it gets to a point where you’ve met your goal and then move those funds into an IRA or other long-term investment fund.

This will depend on your company’s cash flow needs and determining what’s truly discretionary. Once you have discretionary funds, even if it’s a little, take the time to meet with a financial planner. If you start that relationship early, they can help your money work harder for you.

If you’re lucky enough to be working for a company that offers a 401k match, take full advantage of that. Contribute the maximum monthly, because what you contribute is a great start, and you get the bonus of whatever matching percent your employer has committed to contributing. Don’t lose out on free money!

 

4. Be patient

Most things that matter take work and time. Saving toward a better future or building a business is the opposite of instant gratification, so be patient with the process of becoming a success. Be patient in investing in the process and in yourself, because that long-term success is so much more rewarding than instant gratification.

 

5. Get help

If all of this feels like too much for you, or maybe not enough, remember that there are people who spend their entire careers doing nothing but financial planning. You don’t have to be rich to access their services.

At some banks or investment advisor firms, there are minimum thresholds for investing and the financial advisor is paid a percentage of the investment portfolio. However, even if you don’t meet their threshold, many will take the time to meet with you because they want to build a long-term relationship with you. For example, commercial loan officers may look at your budget with you to help you with savings and investment decisions.

In addition, you can pay an hourly rate to financial advisor consultants. So, even if you don’t have any money to invest, you can still sit down with an expert and get some really good advice to help you learn how to grow at any level.

Pro Tip: If your question is ignored or someone gives you an attitude, you’re probably in the wrong institution. You need someone who wants to help you grow and is excited to help you become a success.   

There are people in every industry and every community who actually love financial planning and love sharing their knowledge, and they are among the many small business resources you can access for free.

They will also become part of your network, which is part of building your brand and can help when you need connections in many different areas. Knowing that you have this community is yet another way to make the financial questions and hurtles less daunting: you can do this.

 

Dana Evans is Vice President, and Credit Administration Officer for Baker Boyer.  Dana has been named among the rising stars in banking and finance by American Banker and is one of just 15 women across the country included this week in The Most Powerful Women in Banking: Next program.

 

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Photo: Nenetus, YFS Magazine, Adobe Stock
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