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Home > Entrepreneur Magazine > October 2002 > A Penny Saved . . .

A Penny Saved . . .

and you've taken your first step to starting a business.

You and your spouse both work, and you're barely making it--how will you save money to start a business? We asked David Bach, author of Smart Couples Finish Rich (Broadway Books), to share some money-saving tips:

  • Take a close look at your expenses. Keep track for a few months to see exactly where the money goes. (A program like Quicken or Microsoft Money can help.) Divide expenditures into fixed (every month) and variable (change from month to month). "Go through it, almost with a knife, and figure out what you can cut," Bach says.
  • Reduce spending. If one person quits working to start the business, you'll only have one income to work with. Practice living on that one income now. Things like switching from "super cable" to basic cable can save you from $50 to $80 per month. Clip coupons and buy generic-simple changes add up.
  • Open a dream account. Get a separate money-market account for your business and set up an automatic deposit for every payday-$50, $100, whatever you can afford.
  • Get your safety net. Before you quit your day jobs, make sure you have health and disability insurance in place. You'll need it out there on your own.
  • Pay yourself first. The moment you start your business, get a retirement plan like an SEP or IRA. Says Bach, "The biggest mistake entrepreneurs make is to put every dollar they make into their business-it's really important that you pay yourself first." For more information and to find out about Bach's free seminars, check out www.finishrich.com.

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