Good morning Dinks. Are you thinking about starting a business? If you are there are several things you need to consider such as how will your income flow, how will your money habits change and how will your new business affect your relationship?
David Ning from Money Ning sat down with us to discuss his journey of leaving his 9 to 5 job to start his own business. He tells the story of how his money habits changed throughout the years and how e fully supported his choice to start a business.
4 things you need to know about money and starting a business:
Starting a business isn’t cheap
“My money habits have evolved through the years. As my situation changed from being single to having a family of four, the expenses have gone seriously upwards.” Ning admits he is much more aware of how he spends his money since becoming self employed. “Running MoneyNing.com leads itself to me thinking about my own finances” says Ning.
Starting a business can be expensive with start up costs and advertising, not to mention the numerous personal hours that are required to start a business. Your time is valuable and time spent on your business is time away from your family, but it can be worth it.
A new income equals new money habits
Ning admits he now has more expenses but he also has a better bottom line because he spends wisely and still makes time to save. “I’m spending more but (my finances are) in better shape because I know where my money is going, I’m living below my means and my finances are getting better all the time.”
Ning has always been a saver. Even though his income changed he still makes time to save. “I was fortunate I recognized the power of saving early, and the magic of compounding is definitely starting to pay dividends now because I’m more at ease about tiny expenses that I would have freaked out about just a few years ago.”
Talk with your spouse about leaving your regular income behind
Ning chose to leave his stable biweekly paycheck behind when he took on MoneyNing full time. Although it was an adjustment Ning has no regrets. “Quitting to pursue irregular income is a big decision that can impact many fronts, but one of the most important discussion to have is with the immediate family.”
Ning says it’s important to talk with your family and make sure everyone on board with the loss of income before leaving your 9 to 5. It will be an adjustment for you and your spouse both emotionally and financially. The transition from 9 to 5 to being self employed requires the support of your spouse. “It’s impossible to make it if the family isn’t supportive about the whole move” says Ning.
Be financially ready before you make the move
Having a strong financial foundation is important when deciding to leave your day job because being OK financially gives you more options and peace of mind. “I would never have had the courage to quit my job if I didn’t have a small budget and sizable savings to cover expenses for the medium term” says Ning.
Photo from Flickr