Financial literacy is vital for everyone but especially business owners. One wrong move now can balloon into a major issue when you least expect it. Unfortunately, many black business owners are raised in households where financial knowledge is limited or nonexistent. However, to succeed in business, that’s an obstacle you must quickly overcome.
What is financial literacy?
Officially, financial literacy is your understanding of basic financial terms as well as credit and debt management. How to balance a checking account, how to avoid massive debt and how to properly use a credit card are all concepts that fall under the financial literacy umbrella.
Why is financial literacy important?
As an entrepreneur, you’re faced with a lot of complex decisions. From business loans to employee salaries to business costs and revenue, much of what you’ll deal with concerns money. Additionally, in this time of political uncertainty, the market tends to fluctuate without much warning. The more you know, the more you can safeguard your company and your earnings.
How can I save money?
Financial literacy covers a wide range of topics. However, saving money should be one of your top priorities. When you’re just starting out, every penny counts. So, expect to make the biggest impact by cutting back on smaller expenses.
Become a paperless company. You’d be surprised at how much it costs to make paper copies of documents.
Lease necessary equipment
If you have limited time and resources, consider leasing major equipment that you’d need to splurge on.
Use balance transfers
If you have credit card debt, use a 0% APR balance transfer to avoid paying interest for 12-18 months.
You don’t need to summon an Uber for every work function. Make sure you’re reserving business funds for items you consider ‘mission critical’.
The benefits of financial literacy may not be felt immediately but they’ll provide you with long-term relief. Get smart about your money now, and you’ll have plenty to spend later.