How to Financially Plan for a Startup Business

As the world of work changes, more and more people are taking steps to go into business for themselves. Sometimes this is done via freelancing, the gig economy, or simply by launching a startup company. However, making the right moves when launching a startup business is absolutely imperative and can be the determining factor in success or failure. One of the biggest and most common mistakes made by aspiring entrepreneurs is the failure to engage in full financial preparation. Thankfully, there are a series of steps that each person can take as they work to create or get their startup business off the ground.

Write an Excellent Business Plan

According to reports from Inc, having an understanding of the financial section of a business plan is paramount for any startup. This includes taking note of matters such as accounting, cash flows, profits/losses, etc. Essentially, the purpose of a business plan is to serve as a guide for how the entrepreneur will run his or her own business. Without a business plan, it is impossible to assess the structure of the startup and determine what is needed in order to turn it into a success.

Unfortunately, many entrepreneurs who are new to the world of business and startups remain unaware of how to write business plans. In these particular cases or situations, hiring a professional or accountant to help one come up with a business plan can be wise. Even though the added fee of doing so may seem initially scary, it is a worthy investment. The fact of the matter is that anyone who is serious about success and launching their startup needs to have a clearcut business plan. It is the only way. Going forth without one is a virtual guarantee for disaster.

Determine How to Manage the Day-to-Day Operations

Financial planning for any startup business is all well and good; however, management of the day-to-day operations is equally as critical. As noted by Startup Grind, the ins and outs of accounting play a very big role in whether or not one succeeds or fails in business. Thankfully, there are a variety of apps which can help with day-to-day tasks such as creating invoices and estimates, tracking transactions, generating receipts, managing payroll, pitching to investors, and more. The list, quite literally, goes on and on.

Some of the available apps to manage the aforementioned tasks (and others) include PlanGuru, Wave, FileThis, and CalcXML.

A Final Word

The intricate and required financial planning that comes with building a startup business should never serve as a deterrent or a cause of discouragement. While getting starting as an entrepreneur can be difficult in the beginning, the merits and rewards which come later are indescribable and immense. As automation and artificial intelligence begin to emerge into society, business ownership and self-employment will be some of the most lucrative ways to build a life and ensure financial and job security.

Putting in the work now ensures that entrepreneurs are able to reap the benefits later.

Authored by Gabrielle Seunagal

How to Financially Plan for Getting Married

Marriage is one of the most amazing things that will happen in a person’s life. Entering into a union and partnership with the person that you love, cherish, and care for is wonderful. However, like most things in life, entering a marriage requires and involves planning, especially when it comes to finances and money-related matters. Chances are that both people have their own financial histories; when entering into a legal partnership, total and complete transparency is absolutely paramount. Thankfully, there are a series of steps that both people can take as they prepare to say their wedding vows.

Be Honest and Communicative

As cliche as it may sound to some people, honesty, and communication are two of the most important factors in any marriage. however, this is especially applicable when money is involved. Before and throughout the marriage, both parties need to be honest about their financial standing and positions. For instance, if one individual has debt or loans that they have yet to pay off, they should be forthcoming and upfront about it. Entering into a marriage based on lies is extremely problematic and when money is involved, problematic can turn into catastrophic. The bottom line is to always be honest, omit nothing, and make sure that both soon-to-be spouses are on the same page.

Come Up with a Budget

As affirmed by The Balance, the creation of a joint budget is very advisable for couples. A budget matters because it allows both people to assess their financial standing and then come up with a plan to meet all needs. For instance, one (or both) parties might be bringing certain liabilities, assets, or spending habits into the marriage. There needs to be an understanding of incomes, expenses, payments, etc.

Many spouses sometimes also use joint bank accounts. Joint accounts are usually used for mutual expenses such as rent, groceries, car notes, etc. However, most people do maintain ownership of at least one separate, independent account. This is great for personal spending needs, such as eating out, shopping, going to the movies, or other similar fees.

Ultimately, a budget and an understanding of who controls which accounts and which accounts will be jointly controlled is a critical step before saying “I do.”

Plan for Later in Life

Married couples who are interested in partaking in certain milestones should plan for them. Some of the most common milestones include having children and entering into retirement. The fact of the matter is that both children and retirement are very expensive. If parents believe their children will one day want to attend college, putting aside funds for their college tuition and other associated fees is a pretty good idea.

The cost of living is going up with each passing day and people need to be prepared. This is applicable to not only having children but also for entering retirement. Both parties should have enough money saved up to live comfortably without having to worry about running out of funds and having to rush back into the workforce.

A Final Word

Regardless of how much planning is done, marriage can still come with certain bumps in the road and hurdles. However, nine times out of ten, financial planning can considerably decrease and minimize the impacts of any problems which may arise.

How to Financially Plan for Having Children

Having children is one of the most significant milestones in the life of any adult. In the best case scenarios, knowing that a baby is on the way can be very exciting and even a little nerve-wracking. However, without the proper financial planning, excitement can quickly become stress while nerve-wracking can morph into downright terrifying. This is why financial preparation for the newest member(s) of the family is absolutely imperative.

Understand that Children are Incredibly Expensive

Virtually everyone has heard the infamous phrase: “Kids are expensive.” Many people even believe it and rightfully so. However, hearing that children are pricey and getting a numerical breakdown of the associated, ongoing costs of childcare are two different things. The exact digits can help people understand the gravity of the costs which will definitely become real.

Anyone who is preparing to have kids needs to, at the very least, have an idea of the specific average costs. Thankfully, Discover thoroughly breaks down each facet of childcare and how much they amount to. For instance, the average annual expenses of raising a child within the first two years cost over $12,600.

This breaks down to the following average, yearly costs: $2,900 for education/childcare, $1,800 for transportation, $800 for clothes, $3,700 for lodging, $1,600 for food, $1,200 for healthcare, and $900 for various other expenses. Granted, these costs can be higher or lower depending on assorted factors, but nevertheless, the aforementioned costs provide an idea into how pricey it is to care for one child just within the first 24 months.

Have a Plentiful Emergency Fund Stashed Aside

An emergency fund is paramount for all adults; however, it becomes fifty times more critical when a baby is involved. The truth is that no matter how much money is carefully budgeted out, unforeseen costs have a way of arising, especially when babies are involved. According to USA Today, new parents are advised to save up to [at least] six months of living expenses in the event of any crises or urgent matters. Even after the arrival of the baby, the aforementioned emergency fund should not be touched unless it is absolutely necessary.

Ensure the Existence of Steady, Reliable Income

While budgeting and saving money are incredibly important financial planning steps for having children, the positive impacts are severely counteracted without the existence of steady and reliable income. This is why Money Crashers recommends for expecting parents to have ongoing pay and preferably an established position, particularly if one works in a company.

Each family has varying work situations and what is applicable to some parents may not be suitable for others. While each circumstance and career path is different, steady and reliable income is utterly paramount when starting and expanding a family.

A Final Word

Children are a blessing to any loving couple who is ready to grow as a family. The ability to enact strategic financial plans is guaranteed to make raising kids much easier and stress-free than it would be without any preparation. Understanding the expenses associated with children, maintaining a healthy emergency fund, and ensuring streams of reliable income will make a significant impact. Although the ups and downs of parenthood are unavoidable, even with the best of plans, following the foregoing steps will prevent many problems both in the short-term and the long-term.

How to Financially Plan for an Upcoming Trip

Wanderlust, also known as the strong desire to travel, is more common than some people might imagine. The truth of the matter is that the world is a very big place. There are many places to visit and an amazing plethora of things to see and do. While the upsides of traveling (such as learning, exposure to new, diverse cultures, etc) are well-documented, financial planning is absolutely critical, especially when a forthcoming trip is involved. Financial planning can often make the difference between a successful trip or a failed trip.

However, despite the paramountcy of financial planning, there are still many individuals who struggle with the involved technicalities. Thankfully, the following steps will prove to be helpful and answer many existing questions.

Start Saving Money Ahead of Time

Saving money prior to one’s trip is one of the most critical steps of financial preparation for any traveling excursion. According to Pocket Sense, individuals who are getting ready to go on a trip should start putting funds aside for food, shopping, airfare/transportation, lodging, and other travel-related expenses. In most cases, a monthly budget is best because it permits the person at hand to still meet their ongoing expenses, whilst stashing aside capital for their upcoming journey.

Remember to Stay on Track with Your Regular Bills

It is not uncommon for the excitement of forthcoming or current travel to sometimes serve as a distraction. Often times, the hustle and bustle of travel can engender forgetfulness about certain matters; this can be especially problematic when bills and other expenses are involved. Therefore, Quicken suggests setting up automatic payments which are linked to one’s bank account. This ensures that expenses are covered even during times of travel. Imagine the horror of coming home from an eventful, fun trip only to realize that the lights or heat have been shut off.

In this day and age, virtually every bill can be paid automatically. Automatic payments are especially applicable and recommended for persons who will be traveling for weeks or months on end.

Take Advantage of Opportunities to Reduce Certain Expenses

As a general rule, travel is widely regarded as a costly endeavor. However, taking a trip does not have to be as expensive as many people might think. In this case, it’s not about who you know; it’s about what you know.

First and foremost comes transportation. Nine times out of ten, travelers arrive at their desired destinations via plane. While airfare can be pricey, there are some ways to get around sky-high fees. First comes how far in advance the individual chooses to book their flight. Generally, purchasing airline tickets anywhere between six to four weeks in advance is wisest. Flying on weekends or holidays is often always more costly than buying a ticket during the week. As U.S. News reports, the Skyscanner app is an excellent tool for comparing airfare prices and getting the best bang for one’s buck.

Another opportunity to reduce travel expenses comes in the form of the Airbnb app. Although this app has become more popular in the past few years, there are still many travelers who book hotels as lodging accommodations. However, using Airbnb instead of hotels can determine whether or not a traveler pays $50 per night or $150 per night for lodging.

A Final Word

Traveling is a luxury that can greatly enrich each person’s life if they allow it to. However, financial planning for any trip is incredibly important. Although no one journey will be exactly the same, saving money ahead of time, keeping up with ongoing expenses, and using apps like Skyscanner and Airbnb to reduce some of the most costly travel fees can make a world of difference!

Happy traveling!

An Overview of Freelancing and the Gig Economy

As the world changes, so do work options and the workforce in general. The inevitable emergence of artificial intelligence and automation has also played a role in the shift and perception of work. Traditionally, when most people thought of work, they were reminded of a specific place where they went to offer a particular service or product. However, this, too, is changing. More and more people are rejecting notions of traditional work and pursuing other options and avenues such as freelancing and the gig economy. Findings from the Harvard Business Report moreover affirm that over 150 million individuals across North America and West Europe are pursuing the aforementioned work avenues.

Thriving in the Gig Economy/Freelance Market

Many people dream of a carefree lifestyle where they can work when they want, how they want, and where they want. Despite the possibility and attainability of the foregoing lifestyle, it does not come without hard work. The first year as a freelancer can be most challenging. It takes time to network, get work from various customers, and build up a network of clientele. However, with persistence and gumption, it can be done.

One of the most important, yet frequently overlooked requirements for freelancers is the ability to work well with others. While many freelancers can work from their laptop in any location with internet access, they still have to interact with the clients who are contracting their services. The clientele is absolutely paramount to success in the gig economy. Without clients, freelancers have no business or autonomy.

Freelancers and others who work in the gig economy must also meet deadlines, complete assignments, and communicate with their customers. All of this goes back to the ability to work well with the clientele that breathes life into the freelancer’s ability to do what they do. The preceding requirements are applicable regardless of whether or not one is a freelance writer, editor, graphic designer, etc. While each field varies, the general must-haves remain the same across the board.

Getting Started in the Gig Economy/Freelance Market

When breaking into the gig economy, one of the most important factors entails knowing where to begin and how to reach clients. Thankfully, there are many job platforms such as Upwork, Fiverr, and Freelancer which are excellent for freelancers at all levels. Not only do the aforesaid platforms connect freelancers with clients, but they also allow freelancers to market their skills and abilities on their profiles. Clients who have worked with freelancers can then leave feedback on their profiles. If the feedback is positive, it may result in additional work. Feedback from past clients can also impact whether or not future prospective clients choose to do business with a freelancer or move onto others. As previously stated, clients are the ones who make it possible for freelancers to succeed in the gig economy.

A Final Word

There is no step-by-step success manual on how to succeed in the gig economy. Each freelancer will inevitably encounter their own difficulties and struggles that they must overcome in order to enjoy the perks. While each journey varies, the right tools, a strong work ethic, and the determination to succeed will make all the difference in the world.

Authored by: Gabrielle Renee Seunagal