When it comes to business, people generally treat their finances very carefully. They closely track money coming in and money going out, plan for the future needs of the business, and hire the necessary experts to help out when needed. After all, it would be a shame to squander away money your business has worked hard at earning. So why don’t people do the same for their personal finances? You wouldn’t want your business operating at break even; you want to be turning a profit. Here are four steps you can take to end the paycheck-to-paycheck lifestyle; start treating your personal finances like a profitable business.
Make Sure Your Employees Are Taken Care Of
In this case, employees are equal to you and your dependents. A business can’t run properly if the needs of its employees aren’t being met. Consider what makes a company great for it’s employees to work for and how you can treat you and your household the same: competitive salary (your savings), health benefits (making sure you can afford adequate insurance), 401k matching (making retirement saving a priority), and time off (leaving yourself enough money to enjoy your weekends or even a vacation). As soon as you start thinking about meeting those needs, you will see a shift in your mindset about why you should be selfish when it comes to your personal finances.
Talk to the people who can help you plan for your future and give you the advice you need to help ensure your success...After all, you are the CEO of your life.
Cut Unnecessary Expenditures
Every successful business shares one common thing: a budget. Why? Because without a budget, there’s no way of telling where your money is going (and if it’s being wasted) and if there’s even enough money to cover expenses (before you’ve run out). By taking the time to carefully set out a monthly budget, you are doing yourself a huge favor. A budget will not only allow you to prioritize your spending, but it will also allow you to see where you are wasting money and how to reasonably cut back on things you don’t need so that you have more to put towards important things like retirement or an emergency fund.
See The Big Picture
Another common element of successful businesses is a well thought out and researched business plan. You wouldn’t expect a business to grow from basement startup to Fortune 500 without a plan for how to get there, right? A business plan accounts for the present and future state of the business and how various financial scenarios will affect the business’s growth. Consider doing the same for your own life. Make a list of short term goals (like paying down some credit cards and planning a summer vacation), as well as long term goals like being able to afford a house and what kind of retirement you envision. Having these goals in mind and writing them down will help you to anticipate what steps should be taken to reach them.
Ask The Experts
Business owners know that they can’t manage everything by themselves, especially as their company grows. They hire secretaries, marketing associates, assistants, and salespeople. When it comes to things they only need occasional help with – like legal counsel or tax accountants – they hire outside counsel. Consider doing the same. If your taxes are on the more complex side, don’t attempt to file them on your own. You could make a costly mistake or miss out on some really beneficial tax breaks. The same goes for investing or planning for retirement. Talk to the people who can help you plan for your future and give you the advice you need to help ensure your success.
Personal finance is no doubt a daunting subject for many people. Many people feel out of control and unsure of where to start when it comes to managing their finances. But by creating an analogous scenario – in this case, looking at your personal finances like a business – it becomes much clearer what you should do. After all, you are the CEO of your life.
It isn't always easy to stay on top of your finances, especially when you have developed unhealthy spending habits over the years. However, as you begin to realize the many benefits of having healthy finances, it can become something you want to make a conscious effort to improve. When your finances are in a good place, you often have access to better opportunities whether it be a mortgage loan, greater credit line or business loan. On that note, here is how you can become an expert at managing your finances in case you need a few tips.
Learn to Use Technology
The good thing about managing finances in the technological age is that you don't have to do it alone. There are so many apps available that will help you pay bills on time and track your expenses. For instance, some apps force you to live within your actual income and tell you what to do when you need to balance your budget.
If you need an app that will help you get better at saving, then some will set aside your spare change for you. Also, don't be afraid to use more simple tools such as your smartphone calendar to set reminders about payments if you don't automate them.
Seek Legal Advice
Sometimes, being an expert at something means understanding that you can't possibly know it all. This is why you have professionals around you that can help fill in the gaps where you're lacking. Consider hiring a legal firm to help with any challenges that are beyond you. Lexington Law is a good firm as they could help remove negative items from your credit report. Read this Lexington Law Review (Our #1 Credit Repair Service of 2019) to find out more about how they could help improve your finances.
You can't do better than what you know when it comes to managing finances. You should, therefore, invest your time in learning more about finances and how to manage them. Think about what your goals for your finances are and what knowledge gaps you need to fill.
For example, if you want to invest in the stock market so that you can improve your net worth, then you may need to learn more about investing to do so successfully. To boost your knowledge, try reading articles on credible blogs that share finance information from professionals. Also, be weary of content from finance-driven companies as it could be biased.
Work on Growing Your Income
As a self-proclaimed finance guru, you know that the more sources of income that you have, the better. Work on increasing your streams of income so that you have more money to meet your targets whether it's to save for a property or put larger sums towards retirement. One way to do so would be by getting extra income by doing social media marketing for businesses or creating tutorials on YouTube. If you own a property, renting out rooms is a great way to make passive income.
Live Within Your Means
It can be difficult to live within your means when you live in a society that is always presenting you with things to buy. However, being more conscious about the things that you purchase could help you realize that most are wants rather than needs. To live within your means, always take time to think about a purchase as opposed to impulse spending. You should always get good at bargain hunting as many times you can find items of similar quality at a cheaper price.
Learn How to Manage Debt
Debt doesn't have to be a bad thing if you understand how it works and how to manage it. It can be a tool for credit building when you understand the fundamentals. For instance, if you take out a loan or credit card, always be mindful of your interest rates.
By paying the amount of money you borrowed back in full before the due date, you won't have to pay interest on what you borrowed. If you can't pay back in full, paying more than the minimum payment will ensure you incur less interest. For the most part, the secret to good debt management is never spending more than you can afford to pay back.
Managing finances is a life skill that can help improve your quality of life. By following the mentioned tips and taking your finances more seriously, you're more likely to master the art of healthy finances.