You’ve got a great, world-changing idea and you’ve finally made the choice to venture out on your own. No one’s ever truly prepared for all the ups and downs their entrepreneurial journey brings, but there are ways to make sure your personal finances are in order when you finally do make the leap.

Lynnette Khalfani-Cox is a personal finance expert and best-selling author. We talked to her about a few things entrepreneurs can do to make sure their personal finances are together before launching their business:

Throw the fear out the window 

Cox says the first thing that people jumping into business for themselves should do is negate the fear that their personal finances will be ruined if they don’t have a traditional nine to five gig. She says any financial benefit you have as an employee can spill over into your life as a business owner.

“Just like you might have a 401k plan, a 403b, a 457, depending on who you work for, there’s a thing called a solo 401k for entrepreneurs and it’s way better, because you can sock away far more money in a solo 401k. You can put aside money as both the employer and the employee and get a tax benefit for doing so.”

Cox says a big part of that fear is people simply not understanding which financial products and services will be valuable to them as an entrepreneur. She says once business owners figure that out, it will put them on a pathway to establishing a foundation for themselves whether or not their venture succeeds.

“Some people are so fearful that the business might fail that they automatically think that they personally are going to fail and it doesn’t have to be that way. You can set safeguards up by having a plan.”

Don’t bet the farm

Cox says that a lot of times entrepreneurs make questionable financial decisions like mortgaging their homes or taking out high-cost loans with ridiculous terms that they have little chance of paying off successfully.

“They take foolish risks when they could have taken far fewer risks and received a much better outcome.”

Cox says sometimes people are impatient and just don’t realize all the options available to them. For example, Cox says that some new business owners think they need a lot of capital to do things to get their business off the ground. Whether that’s paying for coders, a facility, etc.

“In their mind, they see it as extremely labor or capital intensive and they just simply think ‘Oh, I don’t have this money.’ Well, that’s where partnership comes into play. That’s where credit comes into play. That’s where having vendor relationships that you establish comes into play so you can get terms. That’s where leasing comes into play so you don’t have to buy equipment outright.”

Cox says there’s a difference between taking calculated risks and making foolish ones. Additionally, new business owners don’t have to put themselves into financial disarray to launch their dream.

Understand credit and how it can help you as a business owner

Cox Says that understanding the benefits of establishing a strong credit rating can help entrepreneurs immensely because it can help them grow.

“Your credit these days is almost as good as having cash in the bank.”

Cox is the owner of several businesses and she says the reason why her bank has given her a healthy business line of credit is because she established her good credit score early on. She says this is especially important for millennials looking to start their own ventures because historically, they have some of the worst credit scores.

“Some of them mistakenly think things like ‘I did skip this payment, it was small, and I just caught up the next month so I doubled my payment’ as if that’s ok. A single late payment can lower your FICO credit score by fifty to one hundred points. So you really need to understand the dynamics of credit and how that may lead to you being able to obtain business credits.”

Cox says it will never hurt you as a business owner to have a good credit rating, but it will hurt you if someone finds out your credit is poor.

Understand your year one costs and what your living expenses will be if you have no income

Cox says sometimes people make overly optimistic projections about their first year in business by thinking of how much of a big industry they can penetrate. She says it’s fine to be ambitious and have big goals, but what if your plans don’t work out? What are you going to do to make sure you’re still financially secure? Making a budget is key, which may seem simple, but 70 percent of Americans already don’t do it.

“Understand what the true cost and monthly burn is going to be for a potential business and how quickly you might go through a given pot of money or credit. And absolutely take the time to create a realistic budget. Even if you’ve been a person who has been fairly consistent and fiscally disciplined, as an entrepreneur, you’ve got a new budget, so now half of the equation has changed, the income side has changed.”

Cox says the main thing to remember is that your personal expenses don’t stop just because you’ve made a career change unless you adjust some things.

“Really take some time to actually do a budget to understand, how much do you spend eating out every month? What are your true transportation costs? What does your rent or mortgage look like and how can those things be modified? What about utilities and the fact that you’re potentially working from home. Did costs go up on that side? Are you renting an office? You really do have to sit down and do a realistic budget and say ‘ok given these costs, how am I going to meet these?’”

Starting a business is never easy, but having your ducks in a row with your personal piggy bank can make the process a lot more manageable and take away unnecessary stress.