In our earlier article, we explored how you can save for your start-up by generating more income. But, if you're already earning all that you can, another way to self-fund your business is to save all that you can. Here's how.
Track Your Spending
First of all, you have to know how much you’re spending in a week and what you’re spending on. Don't rely on gut-feel or guesstimates. Note down every cent spent for a whole month, separating them into different categories such as food, transport, entertainment, clothes and miscellaneous.
Review Your Expenses, Then Cut on Them
Once you’ve done that, you’ll be able to identify what to cut down or cut out. The “Miscellaneous” section of your spendings can be particularly telling. What you thought was just your daily dose of caffeine from your favourite cafe is really a money-drainer, easily setting you back by at least S$140 a month. Swop that for a humble cuppa from your local coffeeshop (just S$24 a month for a cup every work day) and you will get a good idea of the amount of savings you can enjoy from just one small a lifestyle change.
As with everything else in business, set realistic targets and meet them. To do that, remind yourself of the target at every opportunity. Turn it into a screensaver and wallpaper on your laptop or mobile phone, make it into a card you carry around in your wallet, frame it up and put it in your cubicle at your office - whatever works for you.
Remove Your Credit Card Information
If you do online shopping, chances are you already have an account on the sites you frequent, and they’ve saved your credit card information ever so conveniently. Take them out. Now. Don’t make giving in to your temptation as easy as clicking the checkout button. It’ll give you more time to consider whether that purchase is really necessary.
Save It, Don’t Bin It
Is there a hole in your outfit? Are the heels of your shoes worn out? Fix them instead of getting new ones. This way, you save the earth and money.
Borrow, Don't Buy
These days, you can rent or borrow so many things. Need a book? Go to the library. Want a dress for a swanky soirée? There are stores you can rent them from. You don't have to own it to enjoy it.
Be Okay With Hurting Salespeople’s Feelings
It’s okay to say no. Salespeople are supposed to get rejected. They might even become better for it. Be aware of the sales tactics many use to get you to buy things you don’t need. For example, the classic “I only need 30 seconds of your time”, or the "If you spend another S$50 you could get a free ...". It won't take 30 seconds and whatever freebie is being offered is probably something you don't really need or want in the first place.
It may not come naturally at first, but with a little practice, you’ll get into the habit of cost-cutting. If you keep your goal in mind – to start your own business – you won’t even mind the little sacrifices.