The Founders’ Personal Financial Checklist: 10 Essentials for Building a Strong Financial Foundation
Learn how to protect your finances, plan for the future, and avoid common pitfalls while building your company.
Launching a startup is one of the most exciting—and financially demanding—things you can do. While your energy is focused on building a business that can scale, it’s easy for founders to overlook (or to intentionally deprioritize) your own financial health. But your personal finances are also critical for your startup’s health.
In collaboration with Eric Ronn, Financial Representative at Northwestern Mutual, we put together a practical checklist to help founders stay financially grounded. These 10 key areas will help you avoid common pitfalls, protect yourself from unnecessary risks, and build long-term financial stability as you scale your company.
1. Health Insurance
Going without coverage is a risk you can't afford, especially with the unpredictable nature of startup life. A solid plan protects against major out-of-pocket medical costs, which could otherwise disrupt your ability to focus or fund your business. Explore options through the marketplace or private providers, especially if you’ve recently left a W2 job.
2. Emergency Fund
Cash flow can be unpredictable in the early days. Set aside three to six months of personal living expenses in a liquid, low-risk account. This gives you the runway to handle slow months or pivot moments without financial panic or relying on high-interest credit.
3. Disability Insurance
Your ability to earn income is one of your greatest assets. If you're still employed or recently transitioned out of a W2 role, now is the best time to lock in coverage. If illness or injury prevents you from working, this insurance ensures you still have income.
4. Life Insurance
If you have a spouse and/or children, this is a must. But life insurance isn’t just for families. It’s a financial planning tool. Besides covering dependents or debts, some policies can build cash value over time, offering tax-advantaged growth that can be tapped into later.
5. Retirement Planning
Even if retirement feels far off, small contributions now can grow significantly over time. Use tax-advantaged vehicles like a Roth IRA or solo 401(k) to begin building your long-term wealth, even with modest, regular contributions. At an absolute minimum, put in $1,000 a year, even in the lean years.
6. Debt Management
Personal debt, especially high-interest credit cards or loans, can silently erode your financial base. Prioritize paying down expensive debt and consider refinancing or consolidation strategies to reduce interest burdens and free up monthly cash flow.
7. Personal Budgeting
Just like tracking your startup’s burn rate, keeping tabs on your personal income and expenses is crucial. Knowing exactly what you need each month helps you avoid overspending and gives you more control over runway and decision-making.
8. Investment Strategy
Many founders go all-in on their startup, which makes sense emotionally but is risky financially. A diversified portfolio (stocks, bonds, real estate, etc.) helps you manage risk and build long-term wealth, regardless of your company’s outcome. You shouldn’t lose everything if your startup doesn’t make it. That adds unnecessary stress for you and your team.
9. Tax Planning
Working with a knowledgeable tax advisor early on can help you structure your income and investments more efficiently. From handling equity and founder shares to maximizing deductions, good planning today can lead to big savings tomorrow.
10. Legal Considerations
Make sure your personal legal documents are up to date. A will, healthcare directive, and power of attorney aren't just for later in life; they ensure your wishes are followed and your loved ones are protected if something unexpected happens.
Your startup may be your top financial priority, but neglecting your personal financial well-being can introduce unnecessary risk for both you and your company. If you'd like to dig deeper into any of these areas, feel free to reach out. Strong companies are built by founders who take care of themselves, personally and financially.