As I have mentioned before, I am studying marketing and business via distance learning. So far, I have taken courses in marketing, management and financial accounting. What struck me the most as I have worked my way through these courses is how so many people may be stellar at balancing the books at their job, but so lousy at managing their personal finances at home. There are many lessons that people can take from the job to the kitchen table when it comes to operating their own household in the black.

Avoid "Bad" Debt - Bad debt is generally regarded as something that will cost you money, but won't give you any money in return. Good debt is considered to be an expenditure which will pay off at a future time. An investment in your education, for example, would be considered "good" debt. Eventually, it will pay off in the form of a better job and a higher salary. Expenses placed on a credit card would be considered "bad" debt. Try to operate a cash business at home, and avoid bad debt.

Balance the books - Many people avoid balancing their books....their checkbooks, that is. Knowing where you stand financially at any given much debt you have, where your money is critical to maintaining a healthy household business.

Operate in the Black - This is simple. The amount of money coming into the household must be greater than the amount of money being spent by the household. If you are balancing your books on a regular basis, you will know exactly if your household is operating in the black.

Don't be Afraid to Fire - Sometimes, it is necessary to fire someone at work. Usually, it is because the employee is not performing the way the business wants them to. The same principal can be applied at home. Is your car insurance too high? Has your cell phone service provider jacked up their rates? Fire them, and find someone who can do the job better. After all, it's your money they're taking.

Have a system of Checks and Balances - Don't dump all of the responsibility of managing the household finances on one person. First, it isn't fair. Second, the other spouse or significant other is left out of the loop...they have no idea where the household stands financially. Just like with a publicly-owned company, there must be full disclosure. Have a "board meeting" at home on a regular basis and go over the household finances. Discuss short-term and long-term goals. No business is successful unless all of its team members are on the same page, and family finances are no different.

Once you start managing your family's personal business...its home, education, monthly expenses and retirement a successful company, it will reap the benefits and you will feel like a Fortune 500 family!


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