The era of the entrepreneur is here and has been for a while. More and more of us are taking that giant leap and making our own mark on the world. Whether it be freelancing on the side, starting a full blown business with your first few employees, or somewhere in between.This decision in life doesn’t come without its challenges. One of the challenges we can face whilst in the hustle stage is being able to maintain a positive relationship with money and money management.
If you are overlapping your side hustle with your 9-5, or fully run your own business, things can get trickier when you are trying to manage your money, especially if it varies from month to month or week to week.
And the truth is, without learning about effective money management from the offset, we make it more difficult to build stable financial foundations.
When we look at millionaires, they have a completely different mindset and relationship with money… That’s no coincidence.
With that said, here are 5 tips on how to manage your money like a millionaire/billionaire, whilst on your hustle.
#1 The least sexiest tip - Keep an eye on the little expenses that add up
Warren Buffet is notorious for keeping an eye on the small expenses. Being the king of long term vision and having respect for the effects of compounding money, he has managed to build extreme wealth.
This has been known to funnel down to how he operates on his day to day, there are even stories floating around of him using coupons at fast food restaurants.
The way you can apply this in your own life in a simple and effective way is to create a monthly spending budget that you keep an eye on for your daily expenses and review it weekly.
Where are you spending money here and there unnecessarily and how much would it cost you in the long run to continue this way? Using banking apps like Monzo or Starling can really help to stay on top of things.
#2 Never put your money in unnecessary risk
The wealthy maintain their wealth by mastering the art of protecting their assets and money. They make sure any investments they make are in well researched and maintained opportunities, they use safety deposit boxes and they are smart with their liquid cash.
Sure, you may not have investments coming out of your ears right now, or a crazy flow of liquid cash at this stage of your hustle, but it is as equally important to protect your money from unnecessary risks now, as it is when you reach millionaire status.
There are a couple things you can do right now to get into the mindset of protecting your cash like a millionaire.
After all, starting to build this new way of thinking now will make it easier for you to maintain as you begin building wealth.
Protect your money from contactless card hacking.
This is one of the simplest ways to stop putting your money at unnecessary risk. Contactless card hacking started to become a problem a few years ago when people figured out how to use undetectable card readers to scan payment information off payment cards and then get spending with their money.
In the UK alone, £1.18Million was stolen in just 10months. This is avoidable by using a card holder that blocks your card details from being scanned.
Chances are that you are using the public wifi of coffee shops or co-working spaces whilst building your hustle.These wifi networks can leave your open to hackers and by using your card online or accessing your online banking on these networks, you may leave your money open to unnecessary risk.
You can avoid this by getting a VPN (Virtual Private Network) that puts a virtual safety bubble around your tech. There are loads out there, NordVPN is quite popular at the moment.
Millionaires secure and grow their wealth in many ways, and one of them is by investing their money in to well assessed opportunities.
#3 Automate the growth of your investment account
Right now you may not have a huge sum of money laying around to start making significant investments, but it is important that you at least start growing the amount of money you have available to start investing at some point.
You could start by opening up a specific account for your investment fund and setting up a direct debit to transfer an amount you feel comfortable with each month, even if you are starting with a small amount. You could even redirect the money you stopped spending from tip one.
Don’t be afraid to start with small steps - The person who starts small gets further ahead than the person who doesn’t start at all.
#4 Know your numbersWealthy entrepreneurs that create 7 figure businesses and beyond all have something in common - They know their numbers inside out when it comes to their business finances.
And they apply this same methodology to their personal finances. In order to manage your money, you must actively take time to understand what is happening with your money.
What is coming in, what is going out, how can you make your spending more efficient and stop any waste happening.
An easy way to start doing this is to have a monthly (or weekly) finance meeting with yourself. Start really analysing where your money is going. Ask yourself these questions when you are reviewing your ins and outs:
- Am I spending on things that are unnecessary?
- Where is most of my unnecessary spending going and what can I eliminate?
- Can I swap what I am spending on to lower cost alternatives?
- What subscriptions do I have that I no longer need?
Schedule this meeting with yourself in your diary, as it can be easily missed if you have a lot going on with building your hustle!
#5 Use the same approach from zero to a million
What millionaires understand is the power of consistency and habits.
It would be helpful to remember that the habits and consistency of knowing your numbers, continually growing your funds for investment, protecting your wealth and eliminating wasted money applies to where you are now in your hustle stage and it continues to apply when you start creating more wealth.
It is these habits of money management that help you grow and maintain your money.
So building these things into your life from now will mean they become second nature, sooner rather than later. Managing your money like a millionaire is a mindset and the good news is that a state of mind can be acquired by anybody.
Do you have any other tips to add to the list?
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