Budgets and personal finances are no no favorite subjects of most people, and certainly one of mine. Even the executives of the banks have problems in this area, but if you are an entrepreneur who also do. You are concentrating so much time on your business, your personal checkbook takes a back seat. Then one day you meet the surprising fact that you are not saving enough for lean times and panic.
Well, just apply their professional talents to the situation and become your own personal CFO. Using his eyes CFO of the situation, somehow tempers the pain of dealing with their own money. For starters, here are 5 rules for the treatment of your personal finances like a business:
Be your own Board of Directors. To make good decisions, you should know what we are trying to achieve. In business, the Board of Directors of the writing mission statements to keep the company on track with goals. At home, it's up to you to define its mission and ensure that it is meeting by writing down your goals. Not only does your financial goals, but their goals "of life".
Know your operating costs. You know what you spend each month on average? Businesses do this because they base their budgets on historical spending patterns. Most people, however, do not know what it costs to run their lives. You can distinguish detailed budgets, but then at the end of the month that you have not stuck to it. So instead of making a budget that dictates how much to spend, to make a "cash flow statement" that records how much you actually spend each month broken into several categories.
Know your net worth. Companies measure progress toward goals through balance sheets listing their assets and liabilities. His net worth is your balance when you list everything you own. That means your checking and savings accounts, investments, car, house, etc., unless all you need. Track your net worth quarterly to ensure that it is moving toward their personal goals. Without this step, you may not see the impact of their decisions on the money until it's too late.
Results Forecast Money Decisions. When a company takes important decisions, using a process called scenario planning. "They look at the possible outcomes of an election compare to another. You can use the same process to make smart money decisions. For any choice, choose two . options, and then see what each would do to answer their cash flow and equity Remember, there are no "good" or options "bad" - only options that put you closer or further away from your goals.
Follow the progress of the Annual Reports. As companies evaluate their progress in their annual reports, you need to review your list of priorities each year. Did you achieve any goals? Have they changed their spending patterns? Did you spend less than you won? Did you save as much as planned?
You need to treat your money as you treat your business. Give it the time it deserves, because in the end the time you spend is really an investment in yourself and your dreams.