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Stop Personal Spending Mistakes From Seeping Into Your Business

Millennial Magazine - personal spending mistakes

As living expenses increase and wages don’t seem to rise half as quickly, the vast majority of millennials are pretty used to having to make certain financial mishaps just to get by. Loans have particularly become a savior for this generation of individuals who are all tired of being broke, and who are thought to have a mere $8,000 in net worth individually.

If this all sounds surprisingly familiar to you then fear not – you’re not alone in your struggles! But, it’s important not to let these money matters define you. For many, survival is a matter of simply getting budgets under control at last, either through streamlining or with the help of professionals. In other instances, millennials might find it necessary to boost their incomes to get on top here, either through taking on extra hours, new jobs, or, as we’ll be discussing here, embarking on their own business-based side hustles. 

In fact, 64% of millennials now report having a side hustle, with many intending to make this a full-time career or business pursuit as their efforts in this area grow. This can be a fantastic way to manage money matters at last, but before that’s possible, it’s vital to consider the following ways to avoid letting those inevitably personal spending mistakes from ruining your efforts here, too.

#1 – Don’t live on borrowed money.

From the moment they enter higher education, millennials start on a downward slope that can see them facing an average $27,251 of non-mortgage debt from a relatively early age. After all, once that debt snowball has started, further loans are necessary for everything from car purchases through to mortgages themselves. However, in business, this same borrowed money mindset could soon lead to problems, especially considering that a business in debt is effectively a business that has to operate for free.

This can prevent general growth, hiring capabilities, and a whole lot besides, none of which is good news. That’s not to say that taking out business loans is an absolute no-go. In fact, the vast majority of companies will rely on this technique to get started. However, it’s essential to always have a repayment plan in place across the shortest term possible to both save on interest, and ensure that profits start rolling much sooner. You should certainly never make the mistake of assuming that you can run a business on solely borrowed money as you might do in other areas of your life. 

#2 – Never spend what you don’t have.

Along the same lines, millennials also make the mistake of often spending money that they don’t have, especially with regards to credit options in shops, or general credit card spending. Again, this can prove a lifesaver from a personal perspective, but it’s a sure way to a side hustle that never even manages to shake its stabilizers.

As well as leading to the debt that we mentioned above, overspending or relying on credit options in business can especially stand in the way of effective business budgets, true company ownership, and a whole lot besides. Hence why, as well as getting on top of budget plans, etc. in the first place, it’s essential to hire bookkeepers or in-house assistance that can more accurately track the balance of money going in and out at all times. Only then will business plans become viable, and will spending stop causing you heart palpitations every time. 

#3 – Avoid living paycheck to paycheck.

Many millennials have no choice but to live from paycheck to paycheck with no real wiggle room for savings or anything else. Admittedly, during the early days of a side hustle, you’re inevitably going to need to operate in this same way, but it’s crucial to realize that this is no way to build a sustainable business. Instead, the ability to grow earnings enough that you can put at least some money aside each quarter ensures not only that you’re able to continue operating even in advance of sales, but also that you can put in place the financially supported recovery plans that are crucial for the handling of even unexpected business disasters or setbacks.

Millennials have been handed an undeniably harsh lot where finances are considered and, in large part, can’t be blamed for the bad money habits that they employ to get by regardless. But, with most money issues of this nature quickly becoming spiraling problems, avoiding this fate to ensure a business that can turn things around at last is guaranteed to be key. 

What do you think?

Written by Britt Hysen

Britt Hysen is the Editor-in-Chief and founder of MiLLENNiAL. In response to the branded ad campaigns absorbed by the media platform, Britt launched Kreativ Ctrl, a full-service marketing agency specializing in experiential programming and strategic partnerships.

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