I started my first business in 2009 during the heart of the recession after suffering three consecutive layoffs. But I quickly ran out of cash and had to seek a loan from a family member (which fortunately worked out, in that I paid it off and it didn’t damage our relationship).

However, I’ve always been an avid student of personal financial responsibility, and becoming an entrepreneur who faced an uncertain financial destiny, coupled with going into debt, left me stressed.

To help mitigate some of that stress, I turned to Matt Reiner. Reiner is CEO and co-founder at the financial advice company Wela. I asked him to share his top six tips for entrepreneurs to create sound financial foundations.

Wela is changing the way financial advice is delivered, by building a digital product that creates efficiencies for the user. The aim is to lower the intimidation factor consumers feel about financial advice, while maintaining the necessary human relationship they need.

Here are Reiner’s tips.

1. Build an emergency reserve.

A recent study by Bankrate.com showed that nearly 63 percent of Americans have no emergency savings.This means that an unexpected bill like an auto expense or medical emergency could leave that same 63 percent in a distressed financial situation.

For an entrepreneur, this is the last thing you can afford. When your personal financial situation is put at risk, so too is your company. Whether you are currently navigating the entrepreneurial waters or plan to take the leap in the future, make sure you build up your personal emergency reserves.

Wela suggests three to six months’ worth of expenses in your emergency fund. Says Reiner: “This would be in cash at your bank, in a savings account. So, if your monthly expenses are $3,000, then we would suggest having $9,000 to $18,000 in your emergency reserve account.”

2. Don’t rely on credit card debt.

“Racking up credit card debt to fuel your entrepreneurial spirit is not advisable,” cautions Reiner. Many entrepreneurial success stories espouse leveraging yourself to get a business off the ground. Reiner disagrees: “The only problem is that for every over-leveraged entrepreneurial success story that we read, there are nine out there who didn’t succeed. Those simply don’t make good stories.”

Credit card debt can harm both your business and your personal financial goals. “The idea of continuing to roll over credit card debt to no-interest credit cards will work only for so long. If you want to build something great, save up for the entrepreneurial run before you start, and utilize sheer perspiration to get your idea off the ground,” Reiner advises.

3. Don’t confuse a write-off with ‘free.’

“One of the biggest confusions I see with first-time entrepreneurs is that they equate the idea of writing-off expenses with not having to actually pay for the particular expense. A write-off is still an expense, and it is still something for which you must pay,” Reiner says.

Certainly, the ability to write something off helps when it comes time to file your company’s taxes. “When you start a company, cash is king, and managing your cash flow is the key to the castle,” the CEO explains. Just keep in mind that being able to write off business expenses doesn’t mean you should spend frivolously.

Speak with a CPA to better understand how expenses can help your tax benefit and determine together a budget for your business, just as you would for your home.

Reiner continues, “We say in the investing world that you shouldn’t let the tax tail wag the investment dog, and the same can apply here: Don’t let the tax benefit of write-offs wag the spending philosophy of your company.”

4. Live by the guideline of ‘TSL’: taxes, savings, life.

Reiner says that at Wela, “We talk about a rule-of-thumb called TSL: taxes, savings, life.” This is a budgeting tool, he says. TSL advises that business owners put 30 percent of their gross income toward taxes, 20 percent toward savings and 50 toward life.

Those percentages can be altered slightly to help maintain a focus on building the company, and entrepreneurs should not lose focus on their personal finances.That 20 percent for savings, for instance, could be thought of as money to go toward growing the business.

Another area of flexibility: “If you are willing to sacrifice some of your lifestyle for your entrepreneurial drive, then you can reduce some from the 50 percent life budget and put it toward your company,” Reiner explains. He further expands to say that if you are able to stay within these guidelines, you should be able to keep yourself from racking up credit card debt, as well.

5. Be realistic about your burn rate.

Burn rate is a term you likely hear a lot: “One of the biggest things I see with entrepreneurs is that they don’t understand their burn rate,” Reiner says. They think they are spending, say, only $10,000 a month, but really they are spending $12,000.” This then puts them in a predicament well before they have budgeted or planned. Here, Reiner says:

  • If you estimate that the burn rate for your company is going to be X, bump it up by 20 percent when planning and modeling.
  • Keep an eye on your monthly spend to understand if you are within or outside of the expectations of your burn rate. This way, you can identify issues with spending before you have to make a drastic decision within a short period of time.

6. Be financially organized.

It is important to get your personal financial situation, as much as your company’s, organized. Know where all of your monies are and what they are doing. That way, you can stay focused on growing your business while removing the stress of keeping up with your personal finances.

Reiner suggests first making sure you centrally locate your accounts, using an aggregation platform. Wela provides a centralized location from which users can link all of their accounts and have one place to track personal investments and banking.

Reiner also recommends consolidating your old 401ks if you had any prior to taking the entrepreneurial leap. “We often switch jobs throughout our career, and this means we can have multiple 401k plans,” he says. Before forgetting about this money, roll those old 401ks into a single IRA, he advises. This makes keeping up with one’s money simpler, and can also be helpful from a cost standpoint.

In the end, while getting your finances in order can be an intimidating task, consider implementing these tips one at a time and using the stress-free days ahead as motivation!

Want more success and fulfillment in your life? Then check out this free masterclass with Deepak Chopra and me. In it, we share the 5 key things you need to know to create a more meaningful life!

This article was originally published on Entrepreneur.com.