How do you all manage your money?

Hey everyone, I’m 17 and running a small business on the side. I started thinking a lot about money lately, especially on how I should be spending and saving it in my late teens and early 20s. So I’ve got a couple of questions. What’s the best advice you’d give to someone my age about managing money? And also, how do you all handle your own finances? Like, how much do you reinvest in your businesses versus spending on things you need or want?

Also, sorry if my English isn’t perfect; I’m French. Thanks in advance.

Here’s some advice I’d give to someone young about money:

- Set clear goals. Think about why you’re doing this. What’s the end goal? Are there simpler ways to get there?

- Avoid debt unless it’s for something that will appreciate in value. Going into debt for stuff that won’t bring returns can keep you struggling.

- Always consider your Return on Investment. Whether it’s money, happiness, or anything else, get used to asking, “How much will I gain from this vs. other things I could be doing?”

- Avoid comparing yourself to others. Focus on your goals and what you’re building. Be the best version of yourself.

- Surround yourself with positive, supportive people. Some people just take from you, but some will help you grow.

When it comes to money management:

- Get rid of unproductive debt with high interest. It can really drain your resources.

- Set up an emergency fund; at least 3 months’ worth of expenses, but ideally 6 months.

- Once you’re stable, save for the next opportunity, like a new business idea or skill you want to learn.

- Before committing to a business opportunity, consider how much time it’ll take, the risk involved, the potential reward, and whether you can scale it.

- Never fall in love with a business idea. It’s easy to get lost in the excitement, but always stay objective.

- Do your research. Working hard and double-checking things are key. I’d triple-check anything really important.

- Know when to exit. Business can be rewarding but is also unpredictable. Once you have what you need, don’t be afraid to sell and move on.

Good luck with everything.

@Zephyr
Thanks so much. Learned a lot from this.

I’m running a small side business. It’s grown a lot since I started, but I had zero background in business and had to learn from scratch. Here’s what I wish I knew back then:

  1. Keep your business account separate from your personal account (I set up an LLC).
  2. I used to pay for QuickBooks and a bookkeeper, but she messed up my books, and I’m still fixing things 2 years later. Now I do my own bookkeeping, though my finances aren’t super complicated.
  3. Hire a professional for taxes. Totally worth it.
  4. Keep a reserve fund for emergencies, like equipment failures or legal fees. I had to spend thousands this year dealing with an online troll.
  5. Be careful with upgrading equipment. I learned that it’s better to grow into equipment instead of buying the best right away. Same goes for hiring staff; only do it when you really need them.
  6. Don’t expect friends and family to care about your business. Some might buy from you, but don’t rely on them for support.

@Blane
Totally agree on keeping the staff lean. It’s expensive, and being underage where I am, hiring isn’t even an option for me yet.

@Blane
I’ve thought about setting up an LLC once I’m 18. But do all your expenses, like food, have to go through the LLC, or how does that work?

Zane said:
@Blane
I’ve thought about setting up an LLC once I’m 18. But do all your expenses, like food, have to go through the LLC, or how does that work?

If it’s business-related and within tax laws, yes. But you’d need a tax pro to guide you. Personally, I don’t write off food. You can write off a percentage of some housing costs if you work from home, but again, tax laws decide that. That’s why I have a local tax firm handle my taxes.

@Blane
Got it, thanks. Makes more sense now why an LLC would be useful.

I’m 18 and also running a business. Here’s what I can share:

  1. There will be times when you have to go all-in on the business, and other areas of your life, like health or social life, might take a backseat. It’s part of the journey, though.

Some skills that helped me:

  • Cold calling
  • Good communication
  • Knowing your target market
  • Staying organized
  1. I keep all my accounting on Excel and reinvest 100% of profits, since I live with my parents and use their space for storage. I also do all the work myself, so I don’t have to pay anyone.

Looking to connect with other business-minded people, regardless of age. We can all learn from each other.

Best of luck with your business.

@Hadi
I feel like I’m reading my own story here. I’m 18 and doing something similar, storing products at home and balancing a social life with my business. It’s not always easy, but I’m hoping it’ll be worth it in a few years. Keep pushing forward.

@Tian
Keep going. You’ll start seeing rewards if you stick with it. By the way, I’m curious; what kind of business are you in? And outside of work, what hobbies do you have?

@Hadi
Thanks for the tips. I actually keep my accounting in a physical book, but I can see why Excel might be better. By the way, what industry are you in?

Zane said:
@Hadi
Thanks for the tips. I actually keep my accounting in a physical book, but I can see why Excel might be better. By the way, what industry are you in?

I’m in industrial supplies. It’s easier since I already knew people in the industry. I grew up around factory owners, so I have a good sense of what they need.

Honestly, I’m also still young and figuring things out. The best advice I can give is to not be afraid to spend some of your money on yourself. You’re already ahead by starting a business at a young age, so treat yourself once in a while. Go out with friends or enjoy a nice meal; just don’t go overboard with expensive purchases. It’s important for mental health, too.

One last thing: Keep your business to yourself. Not everyone will support you, and some people get jealous even over small successes.

@Tian
Good advice. It’s true that some people don’t want to see you succeed, even if they’re friends. I’ll keep that in mind.