Treat Your Personal Finances Like A Business

Why You Should Treat Your

Personal Finances Like a Business

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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.

1

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.

2

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.

3

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.

4

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.

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Leslie Tayne

Leslie H. Tayne has more than 15 years' experience in the practice area of consumer and business financial debt-related services. Speaker, Author of Life & Debt, Attorney and Founder of the Tayne Law Group, P.C., Leslie is working towards reshaping the debt industry by offering real, proven solutions to help her clients get back on the road to financial freedom.

1 Comment
  1. It is very important to think about your personal finances as a long-term entity. Just as businesses optimize their systems regularly, you should start automating your savings and investments to streamline your finances in a profitable way. Another way is to create multiple sources of income so that you can maintain a positive cash flow.

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