
Personal Finance Tips for Entrepreneurs
Are you a current or aspiring entrepreneur? Now is a great time to start a business or continue investing in your existing business. With any business venture, you will need to manage any earnings you make from your business and your personal finances. Starting a business can be challenging at first but immensely rewarding over time. Investing is also an important part of being a business owner. Check out these personal finance tips for entrepreneurs to make the most of every dollar you earn.
- Your personal finances require more considerations when running a business.
- You will need to set aside enough money for living expenses in addition to putting money back into your business.
- You should have a backup plan in place to make sure you can recoup your finances if your new business encounters setbacks or fails.
LESSON CONTENTS
The age of entrepreneurism
The internet has been a blessing for millions of Americans hoping to start their own business. Just about anyone can start making money from home by offering their services online. Online marketplaces like Etsy and Amazon make it easy for people to manufacture and sell goods and products to millions of consumers worldwide. The number of entrepreneurs in the U.S. keeps growing every year, reaching a record of 33.5 million in 2021.
Regardless of the nature of your business, you need smart money management aptitude if you want to stay in business. Stuffing your earnings in a safe or under your mattress won’t help you build wealth over time. Learn how to put your new earnings to good use.
What to do with your money: business tips for entrepreneurs
Create separate accounts
As soon as your business is up and running, you’ll need to manage and appropriately allocate the money you make. You’ll need to put a large portion of the earnings back into business, but you will also need to pay yourself in the process. It’s best to start by deciding how much you want to make in personal income based on how much you expect to earn in profits. Consider how much you will need to get by while running your business, including money for rent, food, childcare, healthcare, transportation, clothes and non-essential items like entertainment and the occasional meal out.
Put any money you intend to keep for yourself in a separate savings account and pay yourself like you would if you were just another employee. Keep the rest of the earnings in a business account to create a clear divide between your personal finances and business finances.
Pay off high interest debt
You’re bound to incur many expenses when setting up your business, from office furniture to retail space and everything in between. Usually, starting a business means racking up a lot of debt. You can take out a business or personal loan to fund your business. You might also use credit cards to fill in the gaps. Be sure to explore various options to find the best fit for you, your business and your budget.
When managing your finances, create a plan for how to pay off debt. Make sure you put as much money as possible toward the debts with the highest interest rates. Credit card debt tends to have higher interest rates than business and personal loans, usually 10%-15% or more. Compare the interest rates on your existing loans to see which is the highest. Once the debt with the highest interest rate is paid off, move on to the next highest until your business is debt-free.
Create an emergency fund
Accidents happen. To protect your business, plan for the unexpected and even worse-case scenarios. Consider how your company would get on without you if you were injured or ill. There’s a good chance you won’t be able to earn money from your business if you can’t perform the essential duties and responsibilities of the job unless you have employees that can take the reins while you’re away. There’s also a chance your new business venture could fail or take a while to ramp up, leaving you and your loved ones without a reliable source of income.
Make sure you have enough money set aside in case of an emergency. Experts recommend having at least three months of living expenses in the bank as an emergency fund. If your business fails or you can’t go to work, you will still have enough money to live and take care of your loved ones.
Consider taking out a personal life insurance or disability insurance policy while you’re young and healthy. You can lock in a low monthly premium to save money over time. If you can no longer perform the job duties, your disability insurance will pay you a portion of your regular income, usually around 60%. With life insurance, your loved ones would receive a sizeable benefit after you’re gone.
Save for retirement
It’s never too early for retirement planning and saving. As an entrepreneur, you likely won’t have access to an employer-sponsored 401(k) retirement savings plan, but you can always open an individual retirement account (IRA) instead. There are two types of IRAs: traditional and Roth IRAs.
A traditional IRA is funded with pre-tax income. You can put your earnings into the account without paying income taxes. However, you will have to pay taxes on this money when you make withdrawals during retirement.
A Roth IRA is funded with post-tax income. You must pay income taxes when you make contributions to the account. However, you can then make withdrawals in retirement without paying additional taxes.
Both types of accounts can help you prepare for your golden years. Running your own business may be your passion in life, but you will need to step aside and let someone else take over at some point —either due to age or health issues.
Make a plan for your future as soon as you start your business and consult with a qualified or investment or financial advisor to explore your options.
Factor in taxes
You’ll need to pay taxes as a business owner like everyone else. Working freelance isn’t the same as running a business. Consult with a tax professional to determine how to report income, business profits, expenses, and how much you should save for future taxes.
Consider how much you will need to pay in taxes at the end of the year and factor this into your budget so you don’t get hit with a large bill in the spring. You may also consider paying taxes quarterly to stay on top of payments and break up your tax expenses over time.
Grow your earnings
When you’re not investing in more resources for your business, consider putting any additional earnings towards high-yield investments that will pay off over time. Inflation may eat away at your savings unless they continue to grow in value. Be cautious about where you invest your money. Investing your company’s money in smart ways can help you and your company in the future. Speak with a qualified investment advisor to determine what types of investments would be best for you and your goals.
Running a business isn’t easy, but these personal finance tips will help you start off on the right foot.
Related Resources
View AllHow to Budget as a College Student
Every semester delivers the same double punch: a tuition bill larger than last term and a flood of incidental costs — textbooks, lab fees, late-night pizzas — that evaporate paychecks and loan disbursements at dizzying speed. The average college student spends $38,270 per year on tuition, books, supplies, and daily living expenses. In a private campus, that bill rises to $58,628 (Hanson, 2025). When numbers grow that large, hoping for the best is not a plan; a written budget is. This guide offers a practical roadmap for how to budget as a college student—from mapping cash flows, choosing tracking tools, and cutting expenses without trimming the joy out of campus life.
How to Start Saving Money: Clever & Easy Steps
If you vowed this is the year you get ahead financially only to watch payday deposits disappear, you’re not alone. Gillespie (2025) notes that 59% of Americans still can’t cover a $1,000 emergency without borrowing or selling something. Meanwhile, the U.S. personal-saving rate is languishing below 4 percent—about half its long-term average (BEA, 2025). These sobering numbers explain why learning how to start saving is so critical. The encouraging news? A few clever ways to save money can transform vague intentions into steady progress.
How Can I Save Money? Here Are 10 Easy Tips
How can I save money? Picture your money as water flowing through a series of channels. Some streams nourish long-term goals, others evaporate into impulse buys, and a few leak through cracks you never noticed. Redirecting enough of that flow toward the bucket that matters most — savings for emergencies and retirement — guarantees long-term security. Savings protect your future. Yet the typical American household saves just 3.9 % of disposable income as of March 2025, roughly half the pre-pandemic norm (St. Louis Fed, 2025). The good news is that small, deliberate changes can double or triple that rate without feeling like deprivation.
Below, you’ll find proven, beginner-friendly money saving strategies you can start on today. By the end, you’ll have a clear map of ways to save money, from the daily latte decision to bigger moves like automating transfers or picking a side hustle.
Summer Vacation Ideas on a Budget
Rising airfares or tight budgets don’t have to cancel summer fun. A thoughtfully planned summer vacation on a budget can restore energy, create memories, and leave room in the checking account for next semester’s textbooks or an unexpected flat tire. Let’s nail down the numbers and map out low-cost destinations and close-to-home adventures. We also outline painless saving tricks and digital tools that track every dollar and make family summer vacation ideas on a budget a practical reality.
How to Become Financially Independent
Financial independence (FI) isn’t a distant fantasy reserved for trust-fund heirs or Silicon Valley founders. Instead, it’s a math-driven destination you can plot on a timeline — then march toward with deliberate choices every payday. In plain terms, financial independence means having the freedom and flexibility to make choices that align with your goals - without constantly worrying about money. It’s about feeling secure and confident in your day-to-day life and your future. In the next few minutes, you’ll learn the core habits, sequential steps, and digital tools that turn that definition into reality. By the end, you won’t just understand how to become financially independent; you’ll know which actions to take.
Can You Pay Rent with a Credit Card?
Can you pay rent with a credit card? Short answer: yes. Absolutely, but only if your landlord or a third-party processor will take the plastic and you are prepared to shoulder—or cleverly avoid—the fees. Roughly 22% of U.S. renters already put monthly housing costs on debit or credit cards, according to a 2024 payment-trends study by property-tech firm Zego (Salmonsen, 2024). That slice is growing because tenants want smoother cash flow and richer rewards, while landlords crave on-time payments. Still, every swipe passes through a maze of surcharges, interest rates, and utilization limits. Before you tap “Pay,” you need a plan to ensure you have a smart credit card management strategy in place.
Is it Wrong to Let Someone Use Your Credit Card?
When someone you trust — a spouse, adult child, sibling, or close friend — asks to use your credit card, the request feels innocent. Maybe it’s for groceries, a plane ticket, or an emergency car repair. But even with the best intentions, lending your credit card can end up with disastrous consequences. So, you might be asking, is it wrong to let someone use my credit card?
The short answer: Yes, it can be wrong — legally, financially, and ethically — depending on the circumstances. Even if you trust the person, the risks often outweigh the convenience. Below, we unpack the hazards, the narrow circumstances when sharing your credit card can work, and safer alternatives that protect you.
Improving Your Debt-to-Income Ratio
In Q3 2024, Americans spent 11.3% of their disposable income on household debt payments (St. Louis Fed, 2024). Still, some households suffer massive debts, using over 50% of income to service debt. When your debt payments consume too much of your monthly income, lenders view you as a riskier borrower. This results in unfavorable loan terms, higher interest rates, or loan denials.
Understanding how to improve your debt-to-income ratio helps you qualify for better financing options. In simple terms, your debt-to-income ratio (DTI) computes the percentage of your income that goes toward paying debts each month. In this article, we’ll explain how to compute your DTI ratio, what is a good debt-to-income ratio, the best debt-to-income ratio for various loans and strategies for lowering it.
What Is Cash-Out Refinancing?
What is cash-out refinance? It is a mortgage option that lets homeowners replace their existing home loan with a new one and, in the process, convert a portion of their built-up home equity into cash. In other words, if you have substantial equity in your property, you can refinance it for a loan amount that exceeds what you currently owe. The difference between the new loan’s principal and your remaining mortgage balance is then disbursed to you as a lump sum of cash.
A cash-out refinance can be a powerful way to consolidate debt, fund home renovations, or address pressing financial needs. Moreover, mortgage refinance rates are often lower than those of credit cards or unsecured loans. So, how does a cash-out refinance work? Read on for details and the pros and cons.
How to Use Personal Loans for Debt Consolidation
You may find yourself overwhelmed by multiple high-interest debts and unsure how to regain control. One way that has helped many people simplify their finances is using personal loans for debt consolidation. This article will provide actionable advice to help you consider whether personal loan debt consolidation might be the solution you need.
How to Use Personal Loans to Pay Off Your Debt
Have you been wrestling with multiple credit card balances, medical bills, or other high-interest obligations? Do you wonder if there’s an easier way to get control of your payments? That’s where personal loans to pay off debt come into play. Essentially, you use the funds from a single loan to consolidate debt, leaving you with one monthly payment instead of several.
If you are ready to take control of your finances yet unsure where to start — this guide is for you. We explain the pros, cons, and application steps so you can decide if using a loan to pay off bills makes sense. Let’s dive in.
How to Apply for a Credit Union Personal Loan
Do you need funds for home improvements, debt consolidation, or an emergency? If so, your top priorities must be a trusted lender and reliable guidance on how to apply for a personal loan. Credit unions offer competitive rates, clear terms, and a supportive member experience. In this article, you’ll learn what steps to take before you apply for credit union loan financing, what documents are required, how the online application process works, what approval criteria look like, and how to manage your loan responsibly afterward.