Personal finance management can be very confusing, and there is a lot of advice on the different approaches you can take. One way to do it is to think of your household as a business, and yourself as the boss. Nothing new I’ll tell you here that I haven’t already told. This is trying to paint the same picture with different colors, that is.
Who doesn’t want to be the boss, a CEO of a company. If you train your mind that way, then we all are CEO’s of our own self, our own finances and our financial successes. Presenting 10 ways to manage personal finances like a boss
1. Think of Yourself as the CEO of You, Inc.
The key to managing your personal finances successfully is to think of yourself as the boss of your own company. You are the CEO of You, Inc., and it is up to you to make the big decisions that determine the fate of your company. Thinking like a boss often helps people clarify their approach to managing their personal finances.
2. Have a Business Plan
Any good CEO will have a business plan in place. A business plan includes a statement of purpose for the company along with short-term (1-5 years) and long-term (+10 years) goals that will enable them to realize their vision of success.
The plan is usually broken down by business segments, and each segment is broken into smaller goals. The take-home message for the CEO of You, Inc. is to have short-term and long-term goals for your finances, and break those goals down into small, achievable action steps.
3. Cut Costs
Any good entrepreneur will think about cash flow, and how to keep it in the green. One good way is to cut fixed costs where possible. Think about where you might cut on spending in your household to save a little money. Try switching internet or cable providers for a better deal, incorporating a few meatless meals into your menu for the week to save on groceries, and always being on the lookout for sales and coupons.
4. Increase Revenue
There are many ways to increase revenue for your business. If you have a full-time job, consider doing some freelancing. There is a huge gig economy operating outside nine to five jobs, and there is a lot of money to be made. You just need to find your niche and make the time to do it. If you are already a freelancer, think about ways to generate passive income, and how to make more money doing what you are already doing.
5. Automate What You Can
Automation is the way of the future in business, and You, Inc. should be no different.
Make your life as easy as possible by paying your bills automatically (no late fees, ever), automating your shopping through a service like Amazon’s Subscribe and Save. You can also open a checking account with BB&T which will allow you to automate your savings by having retirement savings, 529 plan contributions, and investment buys automatically deducted from your bank account.
Set it and forget it is the way to go, freeing your mind to focus on more important things.
6. Invest Conservatively – Most of the Time
There is wildly varying advice on how best to invest your hard-earned money. But if your goal is long-term slow-but-steady asset growth, it is best to invest conservatively. Most money managers will have funds you can buy into that are specific to this kind of asset class. However, taking the occasional risk is not a bad idea, especially if the investment is in an area where you have some expertise.
7. Think Growth
As in any business, you should always be thinking about growth with your personal finances. You can grow your savings, your investments, and your revenue stream. What moves should you make next? There are an infinite number of ways to make more money. A few examples would be working an extra few hours per week, asking for a raise, or reallocating some of your income stream for investments that will pay off in the long term.
8. Maximize Your Tax Breaks
If you haven’t yet, get yourself a trusted accountant, especially if your taxes are starting to get more complicated than a W-2, filing single with no dependents. An accountant can save you time and money by knowing exactly what forms you need to fill out and how to save you the most money via deductions.
9. Take the Long View
Remember your business plan? The long-term goals for You, Inc. are probably at least partly retirement-related. Start saving early, and contribute as much as you can without short-changing the other parts of your business. Or maybe you need to borrow money to get your business off the ground, as trade companies borrow from banks like ABLV Bank in Riga Latvia to buy their initial inventory. That is all part of your long-term business plan, as would be paying off your loan.
10. Reward Your Employees (You!)
Lastly, don’t forget to reward your most loyal employee – yourself. When you are working hard at building your brand and your company, your needs sometimes take a back seat. But you need to be sure to reward yourself occasionally. Whether it is something small like a picture frame for your office or something larger like a new electronic device or a vacation, give yourself something that makes all your hard work worth it, otherwise, you run the risk of burning out and giving up.
Congratulations on establishing You, Inc. If you maintain good business practices and keep your long-term goals in mind while making decisions, you are destined for success.