by Gray Graham
Times are tough and it is more important now than ever for you to learn to manage your business. I am not just talking about if you are a business owner in the legal sense, but every person out there. Each person must operate their business affairs as if they were a business. Just because you have a job today, does not mean that you will tomorrow as many people have found out in the past couple of years. Most people are just one life event change from being in serious financial trouble so the more prepared you can be for these events the better you will be.
So let's outline somethings every person regardless of income level needs to do to manage their business.
The first thing every business needs to do is differentiate between needs and wants. Just because you really want something that does not mean that you need it. This is the most important and most difficult thing that people need to do . It also is the thing that most people fail at addressing which in turn throws everything else they do into financial chaos.
I see this most when it comes to popular things such as smartphones, tablets, and clothes. Instead of getting things that meet your needs most people get things because it is popular or in style thus often spending hundreds more than they truly need. To make matters worse once the item is out of style, they discard it and move on to the next popular thing adding more expenses to their budget and taking away funds that are not available elsewhere.
The next thing you need to do is develop a budget and stick to it. No exceptions. A well created budget should contain flexibility for those things that you can not foresee as well as the things you know have to be addressed.
Next you have to have a short-term and long-term plan. I find it is easier to set a long-term plan of your goals and use short-term plans to meet the long-term goals. This will give you the flexibility to weather storms when they arise.
Make sure that you develop a plan that is tailor-made for you and not someone else. There are many speakers, authors, etc that like to give out universal financial advice that everyone should do but there are no universal rules. What may be a good idea for some maybe a bad idea for others. Make sure that your plan matches with your individual life situation.
Don't be lazy, shop around. Too often I hear people say they don't have the time to shop around and compare prices. There are so many online services that do this for you that there really is no excuse for not taking the time to compare prices. Major businesses have long understood the importance of shopping around and most have people whose sole job is to get the best price possible and when a lower cost alternative arises then they switch to it. You need to do the same for your business.
One important thing most people leave out of the equation is they fail to seek professional help. Most people do not treat themselves for medical illness, or try to fix their car, then why would you try to take care of your finances by yourself? I know that financial professionals are shunned by many because of the rightly earned reputation most have. As long as you take the time to educate yourself then you absolutely need a financial adviser and accountant especially when you reach a certain income level. As long as you treat them like a poisonous snake that can bite you at anytime, you will be just fine.
And lastly find a balance in your life that works for you. I know a lot of people that try to balance their moral beliefs with their spending which can become really challenging to those on a limited budget. You don't want to support companies that do things you do not like, but they often have the best deals and lowest prices. Or maybe you are a person that really is into fashion and you want to keep up with the latest styles but the latest styles always cost a lot. Or better still you have a hobby that you love that you used to do with your father but it just is expensive to maintain. These are all examples of things that are life choices that shape your financial situation.
So sit down today and develop or evaluate your plan. It is never too early to start to plan the rest of your life.