An aspiring founder asked what I did financially to prepare for entrepreneurship and what I recommend. I started my company over a decade ago. I wasn’t far removed from college, and the world was a different place in general (inflation is real). Here are a few things I thought about that others may find helpful:

• Reduce fixed expenses – Your personal cash flow (i.e., salary) will likely decrease during your early years as a start-up founder. Reducing your fixed expenses (recurring fixed monthly payments) will give you more flexibility. You want to be able to focus on the company. But you don’t want to reduce them to the point where life is miserable, either.
• Reduce debt – Eliminating or reducing unnecessary debt is easier said than done. But if you’re fortunate enough to be in a position to do it, it will help diminish financial stress and lower debt repayments or remove them from your fix expenses altogether.
• Increase savings – Start-ups are hard and unpredictable. It’s not unheard-of for founders to take small salaries, go without a salary, or inject personal capital into the company when times are tough. Savings are a financial cushion that helps you weather the early years. If you can, increase your savings before you start your company.
• Get buy-in from loved ones – If others are affected by your entrepreneurial decision (e.g., family or a significant other), being on the same page is important. Discuss how entrepreneurship will affect the household (including finances). It’s important for everyone to have an idea of what the journey will look like and buy in.
• Consider a Roth IRA – If you’re eligible, consider opening a Roth IRA (you can fund it later). This is a great retirement vehicle in the traditional sense and also an interesting tool that founders can strategically use to invest or hold alternative investments (e.g., private company shares).
• Eat in – We eat three meals a day. Eating out is expensive, so eating in can improve your personal cash flow quite a bit.

These are just a few things that aspiring founders can consider doing before they start their company. Everyone’s situation is different, so some of these won’t be feasible for everyone. Still, they’re good things to be aware of and think about. Building a business is hard. Minimizing stress in other areas in your life can help a lot.