Treat personal finances like a mini business

If we treat our finances more like a business, we may be rewarded with a better financial future.

05:40 08 September 2013

We take for granted that businesses need to keep diligent track of their finances in order to remain successful, and to plan for improvements and maintenance. The interesting thing is that we sometimes forget that we each have similar responsibilities with our personal finances. Each person’s finances operate just like a mini-business. Here are a few tips to remember about personal finances:

• Planning is essential to personal finances, just as it is with businesses. This is most important when combining finances for more than one person since there could be multiple people using the same account, or planning differently. If more than one person is involved, it might be a good idea to set the financial plan on paper for an easy quick-reference.

 

• Budgeting seems like a dirty word at times, but all it really entails is reviewing your income as well as your spending habits. You can sometimes catch a minor bad habit that could cause a major issue with your finances if left unchecked.

 

• Improvements are easy to overlook when it comes to personal finances. You don’t always know if you will need a larger house, but there are other things you can safely assume such as the need to replace a vehicle. Don’t forget about ordinary needs like that when you plan for the future.

 

• Businesses are notoriously looking for ways to save money, sometimes at the expense of the customer experience. For personal finances, you may have to do something similar in order to set yourself up for financial success. Cutting back for a little while might be the best thing for getting out of debt, or saving up for a mortgage.

 

• Just like businesses, paperwork—even if it is done digitally—is a reality that everyone has to deal with at some point. Record-keeping is important for tax purposes, and to pick up on any errors.