As an entrepreneur, you’ve got to keep cashflow positive.
But business isn’t always easy. Most enterprises require at least three years to gain traction in their ventures. Some don’t even reach that point until the 10-year mark.
So, how do you keep funding your dream even as you’re working a day job or pursuing other sources of income?
Here are several frugality hacks every ambitious person should know.
1. Live in a Cheap Apartment or Basement Suite
Forget the rent vs. own argument. You’re an entrepreneur. And what you need is motivation to build your business.
So, go and rent a cheap apartment or basement suite. If you’ve got a home, sell it. It sounds a little extreme, I know, but this will immediately put a lot of money back in your pocket, just as it did for me in 2013.
Living in a smaller space will serve as a constant reminder of what you’re building towards, and it will get you off your butt and into action without delay.
I’ve lived in basements for about eight years myself. Live like no one else will now so you can live like no one else can later.
2. Buy 10-Year-Old Cars
Sell your cars or exchange them for 10-year-olds.
Again, I know it might sound extreme. But you can find some solid 10-year-old used vehicles for $3,000 to $5,000.
I bought a 2010 Chevy Impala about a year and a half ago, and I couldn’t be happier with it. I’m generally an import guy, so I was surprised at the quality of the Chevy. It’s probably the best car I’ve owned, even though I’ve had a Toyota, Nissan, Volkswagen, and a Honda.
Finding the right car is probably the hardest part. In most cases, buying from a dealership is your best bet, as they tend to have a more complete history of the vehicle. People selling on classified sites often overvalue their vehicles by a huge margin.
Overall, the key benefit here is that you can often exchange your newer vehicles for older ones, again putting some cash back in your pocket.
3. Do a Complete Audit of Your Credit Card Statements
I only do this once per year, but honestly it should be done monthly.
Not only have I caught false charges, but every year it seems like I find an item that makes me go, “What? I’m still paying for that?”
Chances are you’re barely keeping pace with minimum payments anyway. Eliminate unnecessary spending because it does add up.
For more tips on credit cards, read books like:
- I Will Teach You to be Rich by Ramit Sethi (affiliate link)
- Debt Cures: They Don’t Want You to Know About by Kevin Trudeau (affiliate link – a little controversial, I’m aware, but there are some useful, practical steps mentioned in here)
While we’re on the subject…
4. Cancel Subscriptions
Again, you’re an entrepreneur. You don’t need subscriptions to Netflix, Amazon Prime, Hulu, Spotify, and god knows what else. You’ve got Tubi and YouTube. Do you really need anything else?
And honestly, if you’re serious about building your business, who needs TV? Go make some phone calls that will contribute to your future success instead of watching people do things that are more fun to do in real life.
Don’t get roped into subscriptions you barely use. You’re being taken advantage of. Instead, create your own subscription programs and enjoy the pure magic of recurring revenue.
Examine your monthly bills and evaluate whether you need subscriptions to things like SaaS apps, magazine subscriptions, clubs that send you monthly goods, or anything else you can think of.
5. Sell Unneeded Items
Around 2012, I remember selling old textbooks and part of my dad’s library on Amazon, along with DVDs and video games I no longer wanted or needed. And that put a few thousand dollars back in my pocket.
It’s getting a little harder to sell used goods these days, especially old electronics or items that only depreciate over time.
But you might have things like musical instruments, comic books, action figures, and other collectibles that would be worth something to someone.
I’m not asking you to part with things you couldn’t possibly see yourself parting with. But the moment you run out of cash is the moment your business goes under, so if you need a bigger runway, don’t be afraid to sell non-essential belongings.
Become a problem-solving machine. Solutions are always available when you go looking for them.
There are a lot of other things you can do to ensure your cashflow is healthy, such as buying cheaper food, working from home, cutting down on your entertainment budget, and so on.
Obviously, there are some things you shouldn’t do long-term, such as buying lesser quality food, because there can be a serious cost to that. But short-term sacrifices can lead to big gains in your business.
Close the escape hatches, burn the ships, and don’t look back. Put your faith in god or the universe and give 100% to your business. One day soon, you won’t even need frugality hacks anymore, because you will be living your dream life.
As my mentors often said:
What you are willing to do, you might not even have to. But what you are unwilling to do might be forced upon you.
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