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We live in a world where financial literacy is often self-taught, and being your personal bank means mastering the ability to independently control, maintain and grow your funds. According to annual P-Fin indexfinancial literacy in the US hovers around 50%, and the EU’s performance is also weaker. According to a report by the American Foundation for Public Education, U.S. states are also inconsistent in how they teach financial literacy concepts to public school students.
The statistics don’t paint a clear picture – especially for women – who face significant financial resilience challenges. According to Federal Reserve System 2023 Reportwomen are less financially secure and have more difficulty paying bills and bank card debt than men.
Additionally, fewer women than men have three months of emergency savings. Women of color are at an even greater drawback. In entrepreneurship, lower than 2% of investment goes to women-led businesses, regardless that women-led businesses show stronger growth.
Financial independence is the key to overcoming these disparities. For entrepreneurs, especially women, building financial knowledge is not only about personal empowerment, but also about business survival. Here’s how you possibly can take control and truly be your personal bank:
1. Take advantage of the gig economy
In today’s digital age, the gig economy is redefining work. For entrepreneurs, this implies using specialized talent without the commitment and costs of full-time employees. Hiring temporary employees—independent contractors, freelancers, or temporary employees—helps keep your enterprise agile and expenses low.
In my company, I focus on a hybrid model of full-time employees and contract specialists. This allows me to scale up or down depending on the needs of the project. This approach not only saves financial resources, but also supports strategic development. Using temporary employees to perform on-demand tasks can mean more cash stays in your bank, supporting your DIY approach to funds.
2. Become a pricing ninja
How you price your products and services is crucial. Entrepreneurs often place emphasis on prices: set them too high and you risk losing customers; too low and you’ll struggle to cover the costs. The point is that pricing should reflect not only the value you provide, but also the sustainability of your enterprise.
When I began my consulting business, I made a commitment to never underestimate my work. I set fixed prices, emphasizing that if customers wanted the exceptional value I brought, they’d to meet my terms. This approach has sustained my growth and positioned me as a premium service provider. Don’t be afraid to price with confidence, ensuring your expenses are covered and your financial “bank” is topped up.
3. Negotiate like a pro
Negotiation is not only about closing deals – it’s an ongoing skill that may prevent money and improve your money flow. Review all of your contracts often. Can you negotiate a higher rate for office space, subscription services or insurance? Creative negotiations may include tactics equivalent to revenue sharing or partial barter arrangements.
For example, I negotiated contracts in which a part of the payment was linked to the implementation of the project. This demonstrated my commitment and reduced start-up costs, which benefited my company’s money flow. Use your creativity to negotiate terms that align with your financial goals.
4. Get skilled financial help
Financial literacy will be a steep learning curve for many entrepreneurs. Although I have taken finance courses, including at London Business School, managing a company’s funds stays an ongoing experience. The key takeaway? Don’t cross it. Consult with financial professionals who can guide you thru investment strategies, tax regulations and risk management.
A small investment in expert advice can bring huge profits in the type of avoiding mistakes and optimizing financial planning. Don’t hesitate to seek help – independence doesn’t suggest doing the whole lot alone; this implies you wish to know when to invest in the expertise that supports your goals.
5. Create boundaries and get educated
Having boundaries around spending and saving is a key aspect of financial discipline. Think of those boundaries as protective barriers that keep you from falling into financial risk during economic downturns or emergencies. For me, knowing my limits and having a system in place for unexpected events was crucial to maintaining my business.
But boundaries are not enough. Commit to continuous learning. At the end of each yr, ask yourself: What do I would like to learn next? What recent strategies can I test? Last yr I asked myself these questions and decided to enroll in the ‘Finance for Non-Financial Executives’ executive course at London Business School.
Financial independence is greater than just the ability to pay bills on time. It’s about proactively managing your money, strategically investing in your development, and maintaining a mindset of continuous improvement. By leveraging the gig economy, mastering pricing, negotiating strategically, in search of expert advice and continually educating yourself, you turn out to be your personal bank – navigating your financial journey with purpose and control.