Are you a manager at the office, a project team lead or a business owner? If you are, then you are no stranger to organizational tasks and maybe even to project management. What I find interesting is that many of us who are good at running a team or organization may not be all that great with managing our finances. Now why is that?
For some of us, our business affairs are rock solid while our finances are not. If you’re in this boat, then why don’t you feel that same level of confidence about your home finances? Should we go as far as trying to run our home like we do a business, in order to impose financial discipline on ourselves?
7 Ways To Run Your Home Like A Business
How efficient are you about your finances? Are your everyday home financial affairs operating smoothly with a budget in place? Here are a few areas where we can tighten up the way we manage the family till. I’ve mentioned before how I viewed myself as a home CFO or household chief financial officer at times, given the number of money-related tasks that we deal with.
1. Avoid procrastination as much as possible.
A lot of us procrastinate. While we put in many hours of work each day, we often put off a lot of our household matters till tomorrow or the weekend. This unfortunate mindset can cost you in a big way. Waiting a week to pay your bills can potentially result in unwanted late fees and interest charges. The payments get bigger, the longer you wait to take care of them.
If you’re not dealing with your bills immediately, then you’re probably setting them aside to tackle later. If so, then make sure you’ve got a system in place that ensures prompt payment processing. For instance, you could log the important bills in a notebook or file. Write the name of the debtor, the amount due and the date that the bill needs to be paid. Every week, you should check your list to make sure a new bill hasn’t arrived (e.g. school photos for the kids or a registration fee for summer camp). Missing deadlines, even for summer camp, usually means paying more. Keeping a simple checklist this way helps make sure that you’re on track.
2. Conduct a personal financial audit.
Has your business been audited before? Mine has, but when it happened, I didn’t break a sweat. I knew that my records were well-organized, my bank statements were clear and all my tax returns were filed by a certified public accountant. Unfortunately, I can’t always say the same for my household finances.
Doing a personal financial audit is often an eye-opening experience where we are able to list loose ends such as bills, judgments, registrations and licenses. Spend a few days reorganizing your home office to make processing incoming mail easier. Close bank accounts so you no longer have to pay unnecessary fees. Clean out and mail your paperwork, develop a payoff plan you can handle, and so on. Clear your financial clutter where you can.
3. Create an action list and a financial plan.
In business, we have a list of responsibilities to fulfill during our working hours. Without specific goals in place, a business would cease to be productive. Many entrepreneurs don’t have much trouble setting business goals, and many can easily develop a schedule and follow up on accounts. The same idea should be applied to one’s home situation.
Without an operations “to do” list, we’d probably struggle through the day. Developing long-term goals for our finances helps us to see the bigger picture. By maintaining a financial plan, we can gain visibility and the confidence that we’re headed in the right direction. Each day matters, so it pays to start right away.
4. Enlist the help of others.
Who are you tapping for “human resources”? If we need help at work, we typically hire someone or outsource a project. An entrepreneur has an accountant, attorney and contractors or other employees to fill in where he or she can’t. Without them, a business would fail to operate. The same applies to the home: see if you can enlist assistance from others if you’ve got a lot on your plate.
I recruited my children to sort through old mail and to throw out anything over two years old. In just an hour, we got rid of a trash bag of paper. I had my spouse separate bills from insurance policies and other documents. With everything organized, financial information and essential documents are right at our fingertips when we need them. A little help can go a long way.
5. Adjust your attitude.
At work, we don’t make it a habit to stand around arguing about what needs to be done. After all, our jobs are at stake. Even if we don’t like a situation, we get through it to get the job done and do our griping at home.
But what about how we conduct ourselves at home? Instead of getting upset about bills or wishing they would just go away, we should face our issues full force. Is it possible to keep a more positive attitude at home or should it really remain as “gripe central”?
6. Get with the program. Use tools!
In business, there are programs and software to help you with a variety of tasks. Imagine the day without your laptop, smart phone and iPod. We depend on technology at our jobs and for entertainment during breaks.
The same tools can be used at home as well. There are a few free and open source programs available to help us keep track of our personal finances. For instance, there’s GnuCash.org, which is a great tool for both home and small business finance. Much like OpenOffice for word processing, GnuCash is an open source solution to record typical home and small business transactions. It’s compatible with both Windows and Mac, and tracks income, expenses, bank accounts and stocks. Other free personal finance programs include Mint.com and Quicken.
7. Find out how you can raise your productivity.
Productivity is measured at most jobs. In all professions, there are ways to judge your productivity and performance. If you don’t measure up, you could be out of work. A business needs to turn a profit, so employees are required to produce.
Do you apply the same mindset at home? How much are you spending on “necessities” and where can you start trimming the fat? Every few dollars saved will equal a paid off bill, a savings account for your kids, a class at college or a pension plan.
Running your home finances like a business can make a difference. Your finances will be much more streamlined so that you can approach your financial goals with less distraction and clutter. Do you handle your money this way?
Copyright © 2011 The Digerati Life. All Rights Reserved.