Protecting Your Family’s Finances When Starting a Business

Starting a business is usually at least a bit of a financial risk. Even if you are financially secure, and you’ve had a good income up until this point, things are about to change. If you are leaving employment to start up on your own, you are losing a steady and secure income, as well as other financial perks like holiday pay and sick pay. Even with no debt and savings, you’re taking a risk, and many of us don’t have the kind of savings that we would like.

But, that doesn’t mean that it isn’t worth it. Starting your own business can be a fantastic thing. Long-term, it gives you the chance to earn a lot of money, for yourself, doing what you love. It’s also something to leave your family. Long after your own life has ended, your business might be going from strength to strength and providing a legacy and financial security for future generations of your family. It’s certainly worthwhile, but it’s also worth taking steps to protect your family’s finances in the early days.

Wait for the Right Time

There’s never a perfect time to start a business. You’ll always have doubts and insecurities. They’ll still be better times, and waiting for the perfect time to do anything usually guarantees a lifetime of waiting. But, that doesn’t mean that there isn’t a wrong time. If you want to buy a house within the next year or so, having a new startup could severely affect your ability to get a mortgage. If you are expecting a baby or planning a wedding, you might want to wait until your home life is a little more settled. There’s no perfect time, but ask yourself if there might be a better time?

Save as Much as You Can

If you are seriously thinking of starting your own business, you might already know how much you need to get started, but do you know where it is going to come from? If you need large amounts, you might need a bank loan or investors. If you can manage it on your own, using your savings is often the easiest long-term solution. Saving more, in a separate account, and only having to borrow a little from the family savings pot is even better.

Keep Saving

The passing of launch day doesn’t mean that you can start to take it easy. Keep saving as much as you can, as often as you can. Even if you never need to use your personal finances for your business, having savings can help to cover holidays and sickness.

Keep an Eye on the Future

Unfortunately, none of us know what the future is going to bring. You don’t know when your family might need more money, or what might happen to you and your loved ones. If for some reason you couldn’t work, or worse, would any loans you’ve taken out need immediately repaying by your family? Make sure you get business loan protection to avoid this.  

Only Take Educated Risks

Yes, there is always a risk. But, you can minimise risks, especially with your money, by reading up, researching, and educating yourself. Learn everything that you can before throwing money around, and your risks are much more likely to pay off.

Photo by Sharon McCutcheon on Unsplash

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