People often can be successful in the business world but clueless when it comes to managing their own finances. A business-minded strategy is a great way to manage and organize your household finances.
“Business advice can translate into wise decisions for your personal finances,” said Heath Tudor, consumer liaison for Resqdebt, a financial health management company in Allen, Texas. “Using simple business practices, you can easily make your house more profitable and efficient.”
Tudor suggests these steps for managing your household finances:
Create a Plan - All businesses begin with some sort of a plan, both short term and long term. Plans help guide decisions and direct you where you want to be in a certain amount of time. Build a plan around your goals. Budget for everyday expenses, emergencies and long term plans.
Track Spending – Businesses often use spreadsheets to track income and expenses. This lets them know the state of the company’s finances at anytime. Tracking your finances will help you visualize your situation and make better decisions. However, you don’t need an expensive or complicated bookkeeping program to track your finances. Record everything that you bring in, spend and owe.
What comes in must be more than what goes out- In business you want to bring in more than what you are spending; the same should apply at home. As you track your finances, look at your income and your spending habits. If you are coming up short every month or using your credit cards to cover purchases, you need to adjust your income-to-spending ratio.
Cut Down on Expenses - Businesses want to keep expenses low so that overhead does not cut into their profits. You can’t always change how much money you bring in but, you can change what you pay out. Examine your bills and find places where you can cut down on monthly expenses.
Conduct Reviews - Review your plan weekly, monthly and yearly. Make adjustments and track your goals.
Overall, the most important thing for your household finances is to stay organized. Know what you are spending and always remember the bottom line. These steps will help you become more profitable and the CEO of your house.