3 Money Management Tips for Young Entrepreneurs

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Let’s talk about money management. For those of you who don’t know, I resigned from my corporate job earlier this year to be a full-time creator. Trust me, this is not something I did blindly. I took time to calculate the pros and cons before making that final decision. 

Pro: I live at home and I don’t have to worry about rent.

Con: I won’t have a stable paycheck coming in every two weeks.

After doing a lot of research and planning, I decided the pros outweigh the cons, and resigning was a risk I was willing to take. Sometimes you just have to take that risk and see what happens. Historically, I’ve always managed my money pretty well. My father kept me informed about finances, allowing me to maintain an above-average credit score and an investment portfolio by 18. 

However, I made a TON of money mistakes in my first six months in business. I’m proud to say I was able to make my annual salary from my corporate in just six months, but there’s a lot of things I wished I did better to manage that money. 

Here are some essential tips based on the mistakes I’ve made.

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Separate personal and business expenses

For reference, my income comes from photography services I provide to clients and brand partnerships for sponsored posts. That money comes in multiple different ways and I initially had no real system in place to separate business and personal. 

To resolve that, I opened a business checking account and have all of my income go to that account. I set up an automatic transfer to my personal account every two weeks. 

A lot of my day-to-day purchases are for business, so I transfer enough money to my personal account to cover my personal spendings. 

Develop a bookkeeping system

When I started my business, there was no such thing as bookkeeping. It was all just spending money and vibes lol. 

I am a woman of many spreadsheets, so I created spreadsheets to budget my money better, but I wasn’t allocating my expenses.

I recently discovered Quickbooks Self-Employed and it’s a game-changer. Now, at the end of every month, I log in and categorize all my expenses and mileage. Doing this is going to make filing taxes a whole lot easier. 

Create an Emergency Fund

I’m not going to lie, I was spending the money as quickly as I was receiving it. As an entrepreneur/  freelancer, we know there are high seasons and low seasons. 

One of the major lessons I learned is to set aside money for low seasons. 

I hope this post was helpful, especially since money matters can be overwhelming for young adults. I’m thinking about doing a full breakdown of how I manage my finances now that I know better, and plan to do better. Please let me know if you’ll be interested in that.

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