Summary

The website content provides five frugality hacks for entrepreneurs to extend their financial runway, including living in affordable housing, purchasing older vehicles, auditing credit card statements, canceling subscriptions, and selling unneeded items.

Abstract

The article outlines practical steps for entrepreneurs to manage their finances effectively during the early stages of their business. It emphasizes the importance of maintaining a positive cash flow and suggests strategies such as choosing inexpensive living arrangements, opting for reliable used cars, regularly reviewing credit card statements for unnecessary expenses, eliminating non-essential subscriptions, and liquidating personal assets that are no longer needed. These measures are presented as ways to free up capital and focus on business growth, with the understanding that short-term sacrifices can lead to long-term success and financial stability.

Opinions

The author advocates for living in a cheap apartment or basement suite to save money and stay motivated towards building the business.
Buying a 10-year-old car is recommended as a cost-effective alternative to owning a newer, more expensive vehicle.
Regular audits of credit card statements are crucial for identifying and eliminating superfluous charges that can accumulate over time.
Entrepreneurs should reconsider their need for entertainment subscriptions like Netflix and Spotify, as these can be distractions and financial burdens.
Selling unneeded items such as textbooks, DVDs, and collectibles can generate additional funds to support the business.
The article suggests that temporary sacrifices in lifestyle and consumption can significantly benefit the financial health of a startup.
The author believes in the power of commitment and the availability of solutions for those who actively seek them.

5 Frugality Hacks to Help You Create More Runway

Practical steps to keeping your business afloat

As an entrepreneur, you’ve got to keep cash flow 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, 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 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 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
Debt Cures: They Don’t Want You to Know About by Kevin Trudeau (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. 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.

Final Thoughts

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 cash flow 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 live 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.

For more inspiration, be sure to sign up for my email list.

Originally published at https://davidandrewwiebe.com on July 9, 2021.