From the Boardroom to the Kitchen Table: Managing your Household like a Business

The following guest post was submitted by Kevin, web content writer for Resqdebt.com. For more helpful tips on how to save money and stay out of debt, visit Resqdebt’s website at www.resqdebt.com.

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.

Comments

  1. Sometimes we forget that a lot of the things that lead to a successful company in terms of finances, can also lead to successful family finances. Having a plan and doing a review is especially important, I think. This helps you keep track, and run better.

  2. This is so important! Most family budgets fall apart on needs–we need this and we need that. By reducing the number of needs down to true needs, but elimiting perceived needs, you can set the table for a real budget.

    You’re on the money with Create a Plan. Most households have none. Maybe it helps to start out with the question ‘what is our purpose’. Saving for a new house, new car, vacation, or just to have X amount in savings to lower stress in the home might be what’s needed to galvanize cooperation and consistency.

    Good post!

  3. i see the point of this post but dont you think that doing all this makes the house seen like a military camp or something? as in everything is so automated. sometimes an entrepreneur like myself likes going home because of the difference in how things are done. i dont want to go home to schedules and spending projections and monthly reviews. dont get me wrong, i see the sense behind it but i dont think i will implement it to the latter(maybe some things)

  4. I have always been a big fan of this concept. It works best for those who need to get things straightened up, ones you have everything organized and under control the system becomes very natural and easy to follow.
    We made it fun and used business terminology and sometimes even made things very formal with presentation etc….it was fun and informative now it’s just a habit and everything just automated

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