There are many challenges when it comes to being a small business owner and one of them can be the often solitary nature of your work. Fulfilling your need to make connections with other people can easily turn into regular restaurant lunches or gathering with friends for dinner and drinks. Just a couple of drinks, a plate of food and a tip, can wind up costing you more than $40. A few of these get-togethers can easily add up to an extra $300 each month that you really don’t need to spend. When everyone else is doing it, and you don’t want to be the one to admit that finances are tight, it’s hard to say no. So you might find you are overextending yourself. You may have a good time, but feel slightly anxious, just knowing that the bulk of these charges will likely wind up on a credit card at the end of the month.
So let’s take a moment to see how one can balance the need for socialization on a tight budget.
Here are three suggestions:
1. Forecast your fun. Take a tip from the business world. Forecasting is the process of projecting what you will spend, on average, in every financial category. You can then see precisely where you’re overspending, and also, where you may have room to spend more. Avoiding denial is the key to being successful in this arena. Be realistic. It’s not plausible to attempt to completely eliminate a category you’re used to spending in. (For example, “I’m not going out to eat ever again.”) Depriving yourself of things or activities you like is sure to spell disaster. So instead of going into a month saying “I’m not going to buy anything unnecessary this month”—simply allocate a certain amount for “Entertainment,” or “Dining,” or whichever categories you value. Then, when the end of the month comes and you’re near the end of your forecasted funds, suggest a local coffee shop instead of a local bar for that next night out.
2. Don’t compare yourself to other people. The desire to keep up appearances is ingrained in us from an early age. That makes staying out of this trap hard. Try shopping at discount stores and skipping name-brand shops. Suggest coffee instead of cocktails (an inexpensive coffee is much easier on the wallet than a $12 glass of wine). You might be surprised to find that others are just as happy as you are to skip spending money as many of them live with the same financial constraints you do.
3. Don’t go it alone. It’s a mistake to assume that everyone else has more money to spend. Talk about budgeting with your friends. Social constraints in this country discourage people from talking honestly about money. People often don’t say more than the obligatory “I’m fine…” (usually a lie) or “I’m broke…” (followed by not taking any action to change that reality.) Be the first to be open and suggest ways to both save and make more money. You’re likely to be pleasantly surprised at the ideas that come out of brainstorming with like minded people, so try it!
Don’t worry. You can have fun and still make sound financial decisions—a key to your financial stability and success as a small business owner. Remember, it’s not necessary to be extreme: “I won’t spend any money on eating out until I’ve made $X.” There may be a few people for whom that works, but they’re a rarity. Instead, plan out your spending and prioritize the things you enjoy most. Talk to your friends, come up with ideas together, and then stick to them. Your bank account, your anxiety level—and your friends—will thank you for it.
