Running a business takes all the mental energy you can spare. Unfortunately, business owners are often so drained from setting long-term business goals that they fail to make plans for their own financial future.
As tiresome and boring as setting personal financial goals can be, it’s something you can’t afford to overlook. Here are some things that you must keep in mind while setting your personal financial goals. Don’t be afraid to contact a personal financial advisor if you need help. They can assist with you setting financial goals and come up with a plan to meet them.
1. Set Aside Money for an Emergency Fund Every Month
Let’s face it – small business owners run into problems from time-to-time. Many of these problems are outside your control. You can get into a car accident and need to pay $1,000 just to meet your deductible. You can be injured and need to take three months off from work.
These crises can be much more manageable if you set aside money for an emergency fund every month. You should ideally have enough money saved to meet at least six months of your basic expenses.
2. Put Money Aside for Retirement
Saving for retirement is extremely important as a business owner. You do plan to retire some day, right? You may feel like you want to run your business forever right now, but someday you may be too old to want to do so (although plenty of business owners are still on fire well into their 80s, like Warren Buffet).
You will want to set aside enough money every month to have a decent retirement. Keep in mind that you can write off a lot of your retirement expenditures as tax deductions.
3. Decide What You REALLY Want from Your Business
Lots of people start a business so that they don’t have to have a boss. While there is nothing wrong with looking at your business as a means of making a living, you should consider whether you really want more from it. Here are some important questions that you should ask yourself.
- Do you want to create a business with a passive stream of income to reclaim your time?
- Is your priority to have a more flexible schedule so you can spend time with your family?
- Are you looking to build lots of wealth?
- Do you want to make enough money to retire early?
- Do you want the flexibility to travel and live wherever you like?
CoinEDGE tells small businesses that setting these goals needs to be a priority before starting a business. “Setting personal financial goals needs to be the very first thing you do. Your entire business strategy needs to focus on meeting your personal financial goals. These pieces won’t fall into place unless you have firmly established your financial goals in advance.”
Set Clear Financial Goals
Setting financial goals may not sound fun, but it is a very important part of running a business. Too many small business owners struggle to make a sustainable living. Even many lawyers making six figure incomes can’t afford to retire, because they don’t set aside enough money in retirement or set clear financial goals.