Savings tips from successful Scottish entrepreneurs
From old wive’s tales, to banks themselves, to family members, it seems everyone has their own pearl of wisdom when it comes to putting away money for the future.
Thankfully, we’ve been able to speak to some of Scotland’s top entrepreneurs, who share their personal ethos on saving and what practical advice they can offer to those looking to build a nest egg.
Susan Mitschke, CEO and founder, MindMate App
“For me, savings mean independence. Therefore, saving plays an important role in my life.
“A few years ago, I only had a bank savings account and very little interest on my savings. I also paid my bills first, then had some fun and never really had a “goal” in mind, but just saved whatever was left from my salary.
“I think everyone should have a monthly savings goal. Even if it’s just £50 a month as a start. Always make sure to “pay” yourself first (i.e. put money into your savings account at the beginning of the month). I also think that investing as early as possible is very important to increase your net-worth.
“Running your business is a rollercoaster: save and invest as much as possible in the good times so that you have a safety net in the bad times.”
Andrew McGinley, CEO and co-founder, CareSourcer
“Being a founder and CEO of a start up is very demanding and can be highly stressful at times. I put a lot more priority now on saving to ensure that I can have nice breaks away with my wife and family - it’s important to have that quiet downtime and to come back feeling refreshed and ready to go again.
“I personally have a target of trying to have a buffer of savings of 3 months of my total outgoings. I understand that may not be possible for all but I like to use this as a safety net.
“I do a quarterly review of all standing orders/direct debits that come out of my account. I always interrogate myself with key questions; am I still using this? Do I still need this? Are there any offers out there that may reduce my monthly spend?
“It’s important to remember not to put unnecessary pressure on yourself! Save what you can afford - if it’s not a sustainable amount you will never stick to it.”
Colin Hewitt, CEO and co-founder, Float App
“Float actually started life based from a spreadsheet I’d built to work my way out of my student debt. We then adapted it for our business and that became the first prototype for the Float product.
“The key realisation for me was that consistently spending less that you earn each month adds up, and small progress that doesn’t seem that great week to week, adds up over the course of year or two. It’s just about getting the consistency, and not blowing it.
“Most of our spending will typically go on a credit card, which actually has a bank account that we transfer any money we spend to that account and it clears at the end of the month. It sounds complicated, but it’s actually really easy when you get the hang of it. That way, at the end of the year there is always a fixed amount in our holiday account, which is much less stressful.
“The nice thing about this method is that as your income increases or decreases you can just flex the amounts that go out of these standing orders.
“We know we could live off less if we really had to which is really important when you’re running your own business, especially in the early days.
“I’ve found it really important to always have at least a months salary in savings, and ideally 2 or 3 months - this takes away so much pressure, that you could walk away from the business if you really had to. In the first 5 years of a business a high percentage will actually fail, so it’s arrogant to presume that you won’t be one of those. I do think it’s difficult to save, when the prize of building a large business can offer a significantly greater return than any savings account will.”
Callum Murray, CEO and Founder, Amiqus
“Saving isn’t always achievable or realistic when you’re in the early stages of building a high growth company.
“Now that we’re further down the road I’ve got a pension in place and starting to build up some longer term savings.
“My top tip is to keep an eye on cash flow and fixed costs. If you can’t afford it, don’t buy it. Buying material stuff won’t make you happy.
“To make good decisions and drive growth within business, it’s important not to be worrying about paying the gas bill at home.
“Being entrepreneurial means that from time to time those savings will disappear but they’ll be back.”