More often than not, the average worker earners just enough money to support and to be on a break even keel,with the numerous bills and fees presented to him. There is a common misconception of having to manage money with a tight budget gives an image of incapacity or lack of capability.

However, an optimistic point of view, having to manage money with a tight budget actually brings out the good qualities that a human being has in order to survive and exist in harmony with the demands of society. This only requires self reflection and responsibility to focus on the self needs and thinking.

Tight Means Availability

Having a tight budget would mean that we are able to discern which things are available to us and also allow us to properly identify and rank the things we need, instead of what we want. In addition to that, we are able to choose and deliberate on the better benefits that we would be getting from choosing a better alternative than the one we would normally want.

The resources and basic needs of a person are already available in society. Something as simple as grocery items that we need for the maintenance of our homes are marketed in different brands and their respective offers. All we have to do is know and understand the fine printing of each product and know what we really need at the right time.

Tight Means Better Responsibility

Having to deliberate on the hierarchy of what we should be spending our hard earned money on, brings out and develops our sense of responsibility. This responsibility ranges from the actual management of money for needs rather than wants and also applies to the choices that we make to manage our existence. We have also developed into thinking what we have to do as certain stimuli is presented to us. In this aspect we learn to juggle and balance a very complex management system and practice perfection and efficiency from within.

Tight Means Better Management Practice

Being able to practice proper management would definitely bring about a more efficient means of existing without the problems of having to look after things, other than what we expected. For example, a credit card should be used to acquire things that are not accessible for normal acquisition or when an emergency is at hand. Still, having this power to have advanced “money” in form of a loan does not mean that we should be using it as if we had the actual money.

Remember that this is borrowed money and down the track somewhere it has to be paid back. Sometimes a credit card is better left at home to lessen the chances of mismanaging money due to a subconscious thought that we are able to bend our budgeting anyway.

Like many aspiring entrepreneurs, you may have decided to break free of your job to live your dream of working from home. You’re ready to seize the opportunity for freedom, unlimited earning potential and chance to live your life exactly the way you want.

One of the biggest challenges you will face during the first two years will revolve around cash flow and money management.

In order to give yourself the best chance possible of surviving the first two years so you can thrive from that point on, it’s imperative that you achieve mastery in five areas:

1. Gain control over your spending today

2. Create a personal and business budget

3. Increase your financial IQ

4. Explore sources of capital

5. Think like a successful business owner

First things first. Gain control over your spending today – Honestly evaluate your spending habits and identify where your money is going. Are you living beyond your means and buying things you don’t really need?

In The Millionaire Next Door, by Thomas J. Stanley and William D. Danko, a focus group interview of ten first generation millionaires revealed that most millionaires don’t own expensive clothes, watches or other status objects, and you won’t find them driving brand new luxury cars.

A millionaire Texan coined the expression, “Big Hat No Cattle” to illustrate the fact that many people like to create the illusion of wealth by making extravagant purchases yet have little to no financial wealth.

Many of these people are deep in debt and if they were to lose their jobs today, wouldn’t be able to survive three months on their savings.

Take control over unnecessary spending. Do you NEED 50 pairs of shoes and a matching purse for each? Do you NEED a new vehicle every three years? Before making a purchase, ask yourself if it will contribute to your building a successful business or take you further away from it.

Create a budget – Do you know how much money you’re bringing in each month and how much is going out? Budgeting doesn’t have to be unpleasant or difficult and if you don’t know where to begin, there are a multitude of helpful resources and articles on the Internet to get you started at no cost.

Successful business owners understand the importance of a budget and follow it faithfully.

If you have no interest or willingness to learn how to budget your money, business ownership is not for you.

Increase your financial IQ – You don’t have to become a financial genius or investment guru, but you do need to have the basic skills. You can access a helpful questionnaire athttp://www.urbanext.uiuc.edu/ww1/pdfs/01financialiq.pdf to help you measure your financial intelligence and identify areas requiring attention.

Also, get your hands on the book Rich Dad Poor Dad by Robert Kyosaki.

Explore Sources of Capital – The first year may require significant investment in equipment, education and marketing and there’s no guarantee your business will start making money right away.

Unless you have significant savings put aside for the start-up period, you will need to explore alternate sources of capital.

Explore financing options through government programs, start-up loans, angel investors, partnerships, friends and family, and although I don’t recommend this one unless you are proven financially responsible, credit cards.

Depending on your product or service, perhaps pre-selling to your clients and customers would be feasible. Suppliers might also provide the start-up money you need.

If you borrow money, even if from family or friends, always get agreements in writing and make sure the loans are set up with proper security, terms and conditions and a payment schedule.

Think and act like a business owner – When you transition from employee to entrepreneur, you will require a shift in your thinking. You will quickly discover that trying to get everything for free or at a “deal” will actually hinder your success.

In the business world, you will be required to develop win-win relationships. If you require something of someone, how will you help him in return? Practice the Law of Reciprocity which means, learn to give and take mutually. In other words, when someone gives you something, give something of equal value back.

Master these five areas and you will significantly increase your ability to succeed.

As you make financial decisions and begin to build your business ask yourself, “Is this the best use of my money in terms of supporting my business?” This evaluation process will become second nature through practice and will support you in making smart financial decisions.