Making the transition from a job to being self employed is tricky, often it means a leap of faith and a good bit of budgeting. At least initially you will likely be earning less than when you were employed. Here are nine ways you can make the transition a bit more financially smooth.
1. Sell The Clutter
Do a sweep of your home and sell anything that you don’t need or use. You can use the money to clear some debt, invest in your new business, or simply to subsidise your income in the early days of your business.
2. Set A Budget For Everything
Create a budget for everything and stick to it. Cut back on things you don’t need and go into a ‘low spend’ mode for a few months until you find your feet. A financial detox is a great way to kickstart a period of thriftiness.
3. Free Days Out
Spending money on lavish days out to theme parks is fun, but wholly unnecessary if you’re on a budget. Go to the park, the beach, for walks, to the library, and to the museum – all of these are free of charge. Occasionally you can ‘splurge’ on a few low cost activities like soft play and swimming.
Try and build up an emergency fund. Even if it’s only a few hundred pounds it’s nice to have something to fall back on. Get this in place before you make the transition. There’s an argument here for having at least 6 months expenses in place, but my feeling is that;
a) if you wait for that to happen, it never will – most people would be tempted to fix things, go on holiday, or replace the car when they see a fund build up into thousands
b) the pressure to succeed is a positive thing for your new business venture – nothing focuses the mind and motivates the body like the need to eat
There’s a happy balance to be struck here, don’t embark on the journey with nothing, but leap before you feel truly ready. Set a date, save as much as you can, then go for it. You can nearly always go back! Worried about risking it? Read this…. Change: Is it as risky as you think it is?
5. Save Money On Food
Spending on groceries is one of the main areas of expenditure for a household. Test batch cooking, buying in bulk or using sites like Approved Food to get cheap deals and make your budget go a bit further.
6. Cut Your Utility Bills
There are two ways to cut your utility bills; use less or switch supplier so that you’re paying less for what you’re using.
Cut costs by doing it yourself. If you’re good at fixing things and decorating, switch to doing as many of these jobs as you can and save your budget for when you really need it.
8. Utilise Entertainment You Already Own
Every home has at least some of the following; board games, computer consoles, DVDs, books, art supplies, craft sets, baking ingredients – use what you have to create fun times at home that won’t cost you a penny.
9. Make Use Of Family Perks
Every family has perks that you should take advantage of when times are lean. For example you may have family that live in pretty areas of the country that you can visit for a short holiday. If you have joiners, electricians, hairdressers or beauticians in your family you may be able to get mates rates, or better still do a skill swap. On the flip side, always be aware of the perks you can offer to others, look for those that are trying to better their lives, and help them out in any way you can.