I’ve got two awesome and rambunctious little boys. Even though they’re not yet 10 years old they already understand how much fun it is to want new things. One of my sons came home from school the other day toting a big packet of information for the fundraiser his school is doing. I went through it with him and he quickly fell in love with the prizes he could win if he sold his soul… If he was willing to sell $300 worth of wrapping paper he would be awarded a 4 pack of cheap Chinese import flashlights. He really, really wanted those flashlights. So, instead of letting him pester all our neighbors and relatives I told him we could give him some extra chores around the house to earn the few dollars needed to buy the flashlights himself.
A few years ago my son would have argued that he needed them now. With a whole bunch of old man lectures, I’ve taught him that what he wants now is different from what he needs now. So, he was good with this solution and has been pulling weeds in our yard to earn money.
The takeaway? Satiating your wants is one of the quickest ways to hurt your credit. As you bootstrap your business make it a point to reconcile your books regularly; watch where you’re spending your money. If you’re going to have success in business you need to be able to limit your expenses. If you’re going to have a credit score good enough to get a small business loan you’ll need to make sure your income outweighs those expenses.
So, next time PayPal tells you to “pay later” then walk away. If you’re shopping at “the speed of want” you’re shooting your credit, and your ability to get a small business loan, in the foot.
Related Article: Looking for a Small Business Loan? Your Personal Credit Matters