Business debt has always scared the bejeebies out of me. Even before we learned of Dave Ramsey and Financial Peace, I just have never been comfortable with it. Maybe it’s because a person can get offered a lot of business debt with little to be able to afford it. Maybe because if I failed, my family would the ones be at risk, not just my business. Anyway, I’ve never been comfortable with it.
When I first started with appraising, I had taken out a small personal loan to buy expensive software. That was 2005. I paid it off as soon as I could. And I’ve never borrowed for my businesses since. But I also never saved.
I read Dave Ramsey’s Entreleadership book and loved it. I took the Entreleadership course. And I have the Entreleadership book on cd; which I have listened to over 20 times as I drive around on appointments. It took hearing it several, several times for it to hit home to me; I needed a savings account for all the businesses.
Dave Ramsey’s story when he started his “retained earning” or business savings account is rather comical to me. He had been in business for awhile. They were having a meeting, worried about making payroll, and were discussing ideas. He had his wife come to meetings back then and she told them that she knew why they were having problems; they go around telling everyone to have an emergency fund in their personal lives, and they didn’t have one in the business. Common sense.
Last year was the first year that I intentionally and painfully worked on building the savings accounts or “retained earning” accounts of the businesses. It will be a long time before I have six months of all expenses saved up. But the efforts of last year have certainly given more business peace in finances so far.
Dave says an emergency fund is like an umbrella in life . . and we all know it is going to rain so we should try to be prepared.
Tonight I am thankful that God finally got thru to my thick skull that an emergency fund / savings account / retained earning account is important in business as well as in personal life! I think part of the reason it took me so long to get the point here was that I didn’t want to. It is hard!! There are a lot of other things I’d rather do with the funds. There are a lot of shiny things out there and lots of possible ideas I’d rather spend money on! But life is raining out there in the world now a days, and having an “umbrella”, even a small one, has definitely given some peace I wouldn’t have had otherwise.