Save and financially plan as an entrepreneur

Galia Gichon is an independent personal financial expert with more than 14 years of experience in financial services, including nearly 10 years on Wall Street and an MBA in Finance from Fordham University. She runs her own company, Down to Earth Finance, where she offers individual sessions and seminars to address personal financial needs and concerns.  Galia has been featured on CNN, Today Show, Daily News, Real Simple and Glamour Magazine to name a few outlets that call on her for her expertise.  She is also a member of Collective-E and offers her Simply Money for Entrepreneurs course in partnership with Collective-E.

1) Feast or famine spending plans. 
Come up with two weekly spending amounts for your non-fixed expenses, such as food, entertainment and clothing.  One amount is for when you feel confident about income that is coming in i.e. $400 a week – the feast period.  The second amount is for when business is slow and you don’t have as much revenue booked on the horizon i.e. $200 – the famine period. Both amounts still let you live your life but with a planned spending amount.

2) Even entrepreneurs can have automatic savings. 
Setup an automatic savings transfer from your checking account to an online money market account.  Many entrepreneurs are hesitant to commit to this action step because of their uneven income.  The fact is that people that save automatically, end up having more money in their account at the end of the year.  If you too are nervous about committing, start with a small amount, say $50 or $100.  It won’t make much of a difference in your monthly expenses – I promise – you won’t even miss it.  Once you see the dollars accrue in your savings account, you will feel motivated to do more. Plus, it is a great base when you need a little extra money.  The benefit of an online savings bank such as smartypig.com or ingdirect.com is that they pay more than your local bank, there are no fees or minimums and you can link it to your checking account – anywhere in the country.

3) Entrepreneur’s are actually pretty lucky when it comes to retirement plans. 

You don’t have the advantage of the HR department to help you automatically setup your 401k.  However, you have the tremendous advantage to save a lot more than you would have if you were just working for a regular corporate company.  The SEP IRA lets you put away up to 25% of your AGI on a pre-tax basis.  If you earned $125,000 this year, you could stash away up to $31,250 – which means you are saving quite on bit on today’s tax bill.  If you worked for a company, that would only be $16,500, almost 50% less!  Plus you get to choose where you want to invest that money, where with a 401k, you are limited with the choices your company offers.  So next time you are bemoaning your entrepreneur status, remember, you could be laughing all the way to the bank compared to your corporate friends.

Want to check out Galia in action and learn a little more about how you can put the Fun back in Money?  Galia and  Collective-E Chief Excitement Officer Sabina will be at Brooklyn hot spot 303 Grand  to talk about money, starting a business in a recession and more – all for a $5.00 donation to the Freelancers Union.  Visit here for more details -http://funinmoney.eventbrite.com/

Learn more about Galia Gichon