Money Management for first-time Entrepreneurs

Why am I writing this article?

While starting DoesAnyone? leaving behind a salaried job, I found it difficult to keep a track of where the money is going. If you were a salaried employee earlier and used to a certain lifestyle, it is necessary to make adjustments to the way you approach spending and saving because the bank balance does not auto-refill at the beginning of each month.

Here are a few tips to make your savings last longer before you start generating revenue from your customers, or get your first round of investment-

Money not spent, is as good as money earned. Even better.

It is wise to think twice or thrice before you spend. Earning 1000 Rs, or not spending the 1000 Rs has the same effect on your bank balance. In fact not spending the money is better because you still have it in your hand to make a wiser investment in your business.

Before spending, try to put your expense in one of these categories

  • Can’t live without – Rent, Electricity, Internet etc
  • Good to have – If its in this category, calculate your ROI (Return on Investment)
  • Can do without – The name says it all

Create separate Bank Accounts

If you are used to receiving a paycheck at the end of every month, your spending style is likely to be aligned with what you see as your bank balance. But when you are living out of your savings, seeing a big number in your account balance can give you a false sense of security.

A simple way to avoid this trap is to maintain separate bank accounts for each of the following.

  • Personal expense account – food, clothing, entertainment etc
  • Company expense account – employee salaries, goods purchase, recurring expenses etc.
  • Company earnings account – Any money remitted to the company goes here.
  • Money source account – your savings, investment etc.

Managing your Bank Accounts

  • Transfer a fixed amount into your personal expense account at the beginning of each month. Estimate how much you would need to survive each month and transfer the amount to this account. (This could vary from based on your base lifestyle)
  • A special advisory for shopaholics – Don’t carry around any credit/debit card apart from the one you use for personal expenses. Also, if you want a credit card, apply for it before leaving your job.
  • Refill the account corresponding to your office expenditure to a fixed amount at the beginning of every month. For example, if your monthly estimate is 30K, and you put 30K in April. Say, you have 4000 remaining at the end of the month. Transfer another 26,000 at the beginning of May to refill it.
  • Use Cheques/Bank transfers instead of cash wherever possible. This way the transaction will be visible in your bank statement making it easy for accounting. For the inevitable cash transactions, keep a few cash vouchers handy.

Keeping track

  • Use Perfios, Mint or other such tools to keep a track of all bank accounts on one platform. These tools have features which can pull data directly from your bank account statement and show all your financial details in one place.
  • The statement of your “company earnings” account gives you a clear picture of your revenue stream.
  • The balance in your “money source” account gives you an idea of how much longer you can survive. This time period is also known as your runway.


  • Finance day – Spend the first day of every month as the finance day. Go through all the transactions of the previous month, see what could have been avoided and get an estimate of the ROI on expenses made.

I have learnt these from making my own mistakes. Hope you can avoid these and make more useful ones 🙂

Good luck. Now go achieve your dreams.

About the Author – Kranthi Kiran

Kranthi is the co-founder of A 2004 IIT Kgp passout with 8 years of experience with various Technology Startups.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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