When families begin to manage their money lives as a business owner manages his business, an amusing thing happens: They start to achieve financial success. What many of us don't realize is that the principles of private financial management are really no different than those of business management.
It's about setting clear goals and priorities and implementing a steely discipline in following a plan. At the core of any prosperous company is an effective budget process. It's no different for a family's personal finances.
Add these key business concepts and you will be on your way to monetary achievement more quickly:
Pay yourself first: If your family members were a business, they would pay its staff before any other costs. Hence pay yourself first. Set your budget goals around an amount you want to save each month. Place it in your savings before you pay any other expenses. If you come up short in another budget item, cut down on some other spending, but don't take it from your savings.
Go all cash: The most notable companies are debt free and pay for operating expenses out of current money flow. If you have debt, make it a goal to pay it off (after you pay yourself first). With each month that your debt payments decline you must accelerate your debt payments and add to your savings.
Stay on course: Life happens and unplanned expenses or emergencies can throw us off course. Do all you can to continue on your budget track even if you want to cut some expenditure for a few months. Your savings goal should be your top priority.
Monitor and measure for success: It is important to have a long-term savings or debt reduction goal, but it's a lot more effective and encouraging to gauge your progress using smaller benchmarks. For instance, if your goal is to save $10,000, break it down to monthly benchmarks. If you realize that you are early, don't be afraid to reward yourself with a little spend.
It's about setting clear goals and priorities and implementing a steely discipline in following a plan. At the core of any prosperous company is an effective budget process. It's no different for a family's personal finances.
Add these key business concepts and you will be on your way to monetary achievement more quickly:
Pay yourself first: If your family members were a business, they would pay its staff before any other costs. Hence pay yourself first. Set your budget goals around an amount you want to save each month. Place it in your savings before you pay any other expenses. If you come up short in another budget item, cut down on some other spending, but don't take it from your savings.
Go all cash: The most notable companies are debt free and pay for operating expenses out of current money flow. If you have debt, make it a goal to pay it off (after you pay yourself first). With each month that your debt payments decline you must accelerate your debt payments and add to your savings.
Stay on course: Life happens and unplanned expenses or emergencies can throw us off course. Do all you can to continue on your budget track even if you want to cut some expenditure for a few months. Your savings goal should be your top priority.
Monitor and measure for success: It is important to have a long-term savings or debt reduction goal, but it's a lot more effective and encouraging to gauge your progress using smaller benchmarks. For instance, if your goal is to save $10,000, break it down to monthly benchmarks. If you realize that you are early, don't be afraid to reward yourself with a little spend.
About the Author:
Tim James claims, Approvals.com Credit Card, Loans and Mortgage website with great deals for saving cash. Our main offerings include: Health Insurance Tips, Credit Card Comparison shopping, Credit Score Info, Budgeting, Current Financial Reports, Bad Credit & Auto Loan Approval Guides and Personal Loans.
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