Being an entrepreneur and a student definitely comes with its own set of unique challenges: on one hand, you have academic responsibilities while on the other hand, you are trying to build your business and grow it. However, with solid financial planning, you may effectively manage your finances and set the stage for long-term success.
Here are some essential ways for student entrepreneurs to get started with financial planning.
Set Goals on Your Finances
Determining clear and realistic goals is always the initial stage of every financial planning process. Goals as a student entrepreneur may be to save a certain amount of money, to invest in one’s business, to repay student loans, etc. This will be helpful in setting a clear direction towards financial success.
Allocate a Budget
Budgeting is important for every individual, and much more important for a student entrepreneur because their financial resources are usually limited. Start by looking at your income and expenses. Calculate how much money you have coming in and also break down your spending into major categories, such as rent, groceries, utilities and transportation. This kind of analysis will enable you to know where your money is going and also be able to identify possible places to cut back or shift the use of some funds.
Keep Business and Personal Separate
One of the biggest mistakes student entrepreneurs can make is intermingling personal and business finances. It is important to keep your personal accounts separate from the funds you use to run your business. You will be able to track your business income and expenses more easily with separate accounts, keep accurate records for accounting purposes and have an easier time filing taxes. A business bank account and a different credit card for your business will help you keep your finances organized.
Track Your Spending
Once you have a budget, you need to track your spending to make sure you adhere to your budget. There are many apps and websites, like Monarch Money, Credit Karma (formally Mint), and possibly services through your bank to help you track your expenses. Or you can use a simple spreadsheet. Just knowing where your money is going can help you cut wasteful or excessive spending. Tracking your spending also helps you stay on budget and avoid taking on unnecessary debt.
Create an Emergency Fund
As an entrepreneur and a student, you need a cushion against a potential financial crisis. Building an emergency fund is the first thing you should do. Save three to six months of your living expenses in a high-yield savings account. This way, if you have an unexpected expense, stress will not get the better of you and you’ll be able to address the issue without derailing your business or personal goals..
Invest in Your Business
Prioritize spending some money on growing and developing your business. It may be more supplies, advertising or new equipment, but continue to invest in the growth of the business.
Get Advice on Financial Matters
Financial planning, much like planning your entrepreneurial activities, can be difficult. Don’t be afraid to get advice from financial advisors and mentors. Let them give you suggestions and information so you can make informed decisions The program in entrepreneurship at ASU’s Entrepreneurship + Innovation Institute offers an enormous collection of information that can help with many of the financial questions entrepreneurs must answer.
Remain Flexible
There definitely will be changes in your financial situation as you go forth on your entrepreneurial path. You have to be flexible and make sure that you are prepared to adjust the financial plan if necessary. Review and revise your goals on a regular basis and make any changes to make sure you stay on the proper track.
Prepare for Long-Term Success
Financial planning is one of the key elements of success for the student entrepreneur. By defining your goals, creating a budget and tracking your spending, establishing an emergency fund and investing in your business while getting advice from mentors, you are well on the way to managing your finances rather than letting them control you. These skills make you much better prepared for long-term success. The path to entrepreneurship is bumpy enough. With proper financial planning, your ride will be quite a bit smoother.
Ready to take your financial planning to the next level? Check out the informative blog posts at ASU’s Entrepreneurship + Innovation Institute and gain valuable insights from experienced
entrepreneurs and industry experts. From budgeting tips to advice on managing business finances, you can take the next step in your entrepreneurial journey. Start reading today and unlock the secrets to financial success!
