21 Nov Business is Personal
Often times in our lives, just like in business, we get caught up in the operations of day-to-day life and we forget about the data and information that power these functions. Businesses run for years without really knowing how operations and procedures are affecting their financial information such as cash flow, management of expenses, or trends in their profitability. This is absolutely true in our every day personal lives as well.
One of the most helpful philosophies for managing personal funds can be to operate like a business. You can keep it simple by using any sort of program where you can enter in different types of income and group your everyday expenses by category. By doing this, you can see where you really spend the majority of your money and get a better idea of how your cash flows month to month. After a couple months of “operations”, analyze your statements and prepare a budget or set some goals. This way you can actively participate in saving and planning for the future. For the real accounting nerds, you can use simple accounting software to build accounts that will allow you to build Income Statements to see your operational tendencies as well as a Balance Sheet to use as a good net worth tool.
It doesn’t have to be too in depth, but it will open your eyes to how your money is really being utilized as well as hopefully provide a foundation for growth in your personal life!