Startups

Consume less! Or: How to survive your first year as an entrepreneur

Source | Linked In | Natalia Wiechowski (Think Natalia) , The ME’s leading Edutainer. Award-winning Public Speaker

The majority of questions people confront me with when it comes to the topic sabbatical and/or my first year as an entrepreneur is: “How did you pay your bills?”

Instead of writing another article on how to make money during these phases (there are enough pragmatic articles out there), I decided to share my personal approach on how to spend less resp. consume less, as this strategy helped me the most through those financially challenging times.

1.Be your own auditor

Start to monitor all of your expenses. Every Dirham/Dollar spent. Once you will see the numbers at the end of the month, your stomach will cramp. This was at least the case for me. Being confronted with my compulsive consumption behavior was so embarrassing, it still makes me think twice before I buy something.

Let’s get into action: Use a simple Excel sheet or look for phone apps that will support you on this journey (e.g. Dollarbird). Create categories like: Rent, water & electricity, internet & mobile, petrol, grocery. This will give you a great overview over your monthly basic expenses. Can you cut down your expenses in those fields? E.g. Share internet costs with your neighbor? Start comparing prices and look out for alternative (service) providers as well – in each of those categories.

Guess what? The majority of your expenses will very likely be in the “other” category. Everyone has an “other” category. This is the area in which you will have to radically stop consuming. I used to spend money like a crazy person on clothes, cosmetics and dining out. Those days are gone.

I now know how much money I need (not want) for a decent life per month. Take this sum, add a 15% buffer, multiply it by twelve and you will know how much cash you will need to save in advance if you want to focus on reinventing yourself and your life for a year, without the necessity of working.

2.No credit card(s) & no online shopping

I never was a big fan of credit cards. Maybe because my parents taught me the simply rule “If you do not have money. You do not purchase anything.” They also encouraged me to face and solve my problems instead of getting a quick fix (e.g. through consuming something). That totally makes sense to me, but unfortunately not for everyone.

Many things we acquire are absolutely unnecessary and purchased to ease a(n unconscious) pain/discomfort – a status quo you will face quite often as a start-up. In other situations we consume to impress people we do not like; and credit cards and online stores make it easier to fall into this trap. A kind reminder: During a sabbatical or your first year of entrepreneurship you have to focus on your growth and on creating – not consuming.

An example why credit cards can be dangerous: A friend of mine recently told me that she is in debts. I asked her how many cards she possesses and how much cash she has to pay back. After a few minutes of calculating she turned pale and whispered: 30,000 AED on my four cards… holy cow! It is only then when she realized that her sabbatical needs to be postponed by six more months.

3.Barter & use 2-for-1 deals

Since Tim Ferris taught me that time is the new money, I started bartering. And I still do so today. For me bartering means trading in a service/product against another product/service – in a way that both parties feel fairly treated. On a basis of transparency, honesty and trust.

A few examples: I help you creating a great LinkedIn profile and I get my haircut for free. I write an article for you and you will provide me with five great pictures for my Instagram. I teach you how to do facebook live session and I do not pay my food at your restaurant.

Food, fitness & beauty services and attractions are another big area where you can save quite some money. There are heaps of loyalty concepts and/or 2-for-1 offers in the market that allow you to do so. I stumbled upon the Entertainer concept (they are active in 14 countries!) in 2012 and am a huge fan since then.

How it works: I primarily went to venues, in which I received two meals, manicures or massages while paying for one (IF I allowed myself this luxury. I only did so to celebrate milestones). A nice side effect is that I encouraged a friend to save, too, as we divided the costs by two. I embrace this strategy until today. If you do not possess the Entertainer yet, use my discount code “Natalia10”.

4.Sell your stuff & entertain yourself

I have watched the documentary “Minimalism. A documentary about the important things” a few weeks ago. In this film, a woman took part in “Project 333”. 33 clothing items and accessories for 3 months. The end result? None of her colleagues realized that she wore the same items. She combined them creatively and reinvented her outfits through that.

Lesson learned: Declutter your wardrobe and take your creativity to the next level! Sell your never worn clothes in a second hand shop (e.g. My Ex Wardrobe) and use that money if you urgently need a suit/dress for a special event. Another alternative is borrowing clothes from your friends or family for such situations. My wardrobe now consists of timeless classics and my favorite pieces. Everything I did not “love” had to go – that was more than 40%.

For further reading of full article READ ON……

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