As 2015 comes to a close, it’s time to start planning your New Year’s resolutions, where you vow to get better with your finances, save more money and find a more fulfilling career. For some, saving more comes down to learning how to say no to small purchases. And for would-be entrepreneurs, sometimes the hardest part about starting a business is taking that first step. We asked best-selling author, entrepreneur and career coach Josh Felber for his top money tips for 2016. Felber offered two core pieces of advice:
“2016 is the year to break free from mediocrity and society’s ‘norms.’ Now is time to quit your 9-to-5 job and become an entrepreneur. Start becoming the true you and creating the lifestyle you are destined for.”
Felber is a finalist in GOBankingRates’ Best Money Expert competition held this month in collaboration with Ally Bank. He also won the title of “Best Expert” in the 2014 contest. See why 2016 is the year for you to save more and break out your inner entrepreneur.
Cut Spending to Create Long-Term Wealth
Felber’s first money tip is easy for anyone to accomplish in 2016. He asks you to reconsider your immediate wants and weigh them against long-term goals. You oftentimes might explain away the cost of a cup of coffee or night out, but spending money frivolously every day or every other day weighs down your monthly budget. Poor spending habits can also leak into your business when you ultimately pursue becoming an entrepreneur.
Concentrate spending on your needs so the money you might otherwise have spent can be put toward a new business or retirement fund. Real wealth is built and cultivated over time after all.
If saving is a hurdle for you, start small: Cut one small purchase you make every day or week. Once you have adapted to living without that one small purchase, cut out another expense. By focusing on one cost-cutting tactic at a time, you can slowly build up how much you save every month without completely changing your lifestyle come January.
For small business owners and to-be entrepreneurs, start picking up skills that can save you money down the road. Practicing your writing skills, making cold calls and even learning how to maintain a website can help you curb the costs associated with hiring additional personnel to handle smaller tasks.
Why Start Your Business in 2016?
Felber suggested quitting your job because, too often, people fall into the routine of working full-time making other people rich. But if you’ve always dreamed of being an entrepreneur, you won’t ever find a good time to start your own business so long as you’re complacent at work. If you’re scratching your head over how to get started, make a list of the things you’re passionate about and your unique skills. You might discover that your flair for photography, SEO skills or knack for artisan baked goods might be in demand and lend themselves to starting a business.
For budding entrepreneurs, banks have your back. Small business loans are seeing higher rates of approval at major banks, according to a report by Biz2Credit, an online marketplace for small business loans. In fact, the approval for these types of loans hit their highest level since 2011, when Biz2Credit first began tracking them.
Between January 2014 and March 2015, Wells Fargo lent more than $22.6 billion to small businesses as part of a five-year initiative to support businesses. And while approvals at small banks and credit unions have remained relatively flat, 80 percent of small-business owners will do preliminary research on loans online, and that amount is expected to rise in 2016.
Alternative lending and crowdfunding sources are on the rise, too. In an industry report conducted by Massolution, a crowdfunding research firm, the total global capital raised through crowdfunding is expected to hit $34.4 billion this year, up from $16.2 billion in 2014 and $6.1 billion in 2013.
Entrepreneurs Are Happier Flying Solo
Work satisfaction — or rather, dissatisfaction — shows how pursuing entrepreneurship can increase overall happiness. Only 48.3 percent of U.S. workers are satisfied with their jobs, according to a 2015 The Conference Board Job Satisfaction survey.
On the other hand, entrepreneurs who make their own rules and set their own hours appear to be happier, according to the Global Entrepreneurship Monitor 2013 Global Report prepared by Babson College. The report surveyed more than 197,000 people. Even entrepreneurs with startups were more satisfied than typical U.S. workers; entrepreneurs with established businesses were even happier.
Consumers Prefer Small Businesses
Consumers are also more likely to take their money to small businesses, according to a 2014 report by AYTM Market Research. The report found that consumers like working with small businesses because it allows them to support the local economy and receive more personal service. Roughly six out of 10 consumers also said they would be willing to pay higher prices to support small businesses.
Ultimately, Felber’s biggest takeaway is that you need to be in control of your lifestyle. Take chances and pursue your passions. When it comes to building wealth, learn to reel in your spending and focus on long-term goals over short-term wants.