In this article I will explain the “list of unspoken rules of financial management and how to use them properly”. Finances are changing all the time. Whether you’re interested for personal or business reasons, you need to be keeping up with the new rules of finance, or you won’t know how to use them. If you’re interested in keeping your business afloat, or making sure you have enough saved for the future, then this article has everything that you need to know.
Finance for both home and work
No matter what you do for a living, you need to understand how finances work. On a personal level, you need cash to grow as a family and attain the goals you set for yourself. If you own a business, having good cash flow and growth is critical to your success. That’s why this article is going to focus on both aspects. If you have control of your personal and business finances, then you’ll go fat.
Personal finances and why they matter
For the lay person, finances can feel like a minefield. You don’t know what the best thing to do is, especially when there are so many options. How can you get a grip on your finances when the rules change all the time?
In fact, it’s much easier to understand finance than you’d think. If you spend a little time looking into it, you’ll find that you can start making changes right away. Here’s some of the rules you need to know to get you started on a brighter future.
– Start saving: You’ve heard it before, and that’s because savings are vital. There’s millions of people without savings, as they think they can’t afford to start an account. In fact, nothing could be further from the truth.
If you want to start saving, start small. Have $100 taken from your account every month and put it in a savings account. If you can’t do that, do $50. Or $20. $20 doesn’t sound like much, but it’s $20 more you’ve got saved than you had before. You can even try tactics such as saving every $5 bill you get, if saving feels too difficult for you.
– Invest your money: Once your savings are comfortable, at around 3 to 6 months’ salary, you should start looking at investing that money. How you do so will be dependent on a number of factors. These include your current goals, the needs of your family, and any important expenses that will need to be taken care of. You’ll also have to assess how much risk you’re happy with taking.
If you’re at this stage, it’s a good idea to consult with a financial advisor. They’ll look at your situation and savings, and be able to tell you where you can best start making investments.
– Make sure you take advantage of tax exemptions: As an individual, there may be several different tax exemptions you could be eligible for. Thousands of dollars worth of exemptions aren’t claimed every year, just because people don’t know about them. For example, you could be owed money because you have school aged children, or because they’re caring for an elderly relative.
Start looking into these exemptions now. That way, when it’s tax season, you’ll be ready to get the exemptions you’re entitled to.
– Buy essential insurance: As an individual, you hope that the worst doesn’t happen to you. However, you don’t know what’s around the corner. Insurance is an expense that’s worth paying out, as it can help you through the toughest of times.
The most important health insurance you can buy is health insurance. You can take good care of yourself, but no one knows when they’ll become injured or fall ill. Insurance can make sure your medical bills are taken care of, giving you one less thing to worry about.
– Train yourself in finance: Even if you think you don’t have it in you to be good with your finances, you can learn. You’ve started by reading this very article. All you have to do is now keep up your training. Read articles and journals on personal finance, and you’ll soon find it easier to keep track of what you’re doing.
Financial rules for business
As a business owner, finance can seem more complex. After all, it’s not an individual’s finances you’re taking care of, it’s a whole company’s. Many businesses fail because they haven’t properly thought about how they would handle their finances. If you’re just starting out, here’s some rules that you should know in order to keep yourself afloat.
– Measure your business growth: You can’t keep on top of how much you should be making, if you don’t know how much you’re growing. You can measure success in several ways, such as website views or sales. You can cross reference this with the money you’re currently earning, and you can see what you need to do to improve your cash flow.
– Look into getting paid faster: Cash flow is a problem for a lot of businesses, to the point where they can’t pay their bills as they’re waiting for money to come in. If this is a problem for you, then you need to look into how you can bring money in faster.
A good way of doing this is by starting to use electronic invoicing. This is a simple step, but it means that your clients get their invoices instantly, instead of days later. Then, they can start looking to pay you faster, too. This sounds like an insignificant step, but it’s amazing how much of a difference it makes.
– Try using charge cards for bills: If you need more time to pay your bills, then a charge card could be the right idea for your business. When used carefully, they can give you a little more space and float your payments over a certain period of time.
When you’re looking for a card, look for one that gives you certain advantages over others. For example, some cards give you a discounts on repayments if you’re looking to pay within a certain amount of time. Get one that can give you extra advantages, and you can get extra use out of that card just for paying your bills.
– Create relationships with financial partners: The mistake many businesses make is that they don’t establish a connection with financial partners, such as creditors, until they need the help. The problem with this is that when this situation occurs, you’re not going to look nearly as appealing to the people you want to get help from.
Instead, establish contact earlier on. Let them see that your business is thriving, and when you do need the help, you’ll be much more likely to get it, faster.
– Take advantage of the BYOD trend: BYOD, or Bring Your Own Device, is becoming much bigger in the business world. Rather than using technology in the office, employees are now bringing in their own devices in order for them to do their jobs.
Financial manager Victoria S. McDonald from Best Australian Writers says: ‘We’ve implemented the BYOD strategy in our offices, and we’ve found that it saves an enormous amount of cash. As well as this, employees are much happier using their own devices that they can take anywhere.’
– Look at your hiring strategies: If you’re spending more than you’d like to on staffing, there are ways to save money. Thanks to modern technologies, there’s lots of ways you can make quite large savings.
For instance, if you’re using servers, then you’ll be spending money on staffing and maintenance. Instead, you can actually outsource that work to a cloud computing network. That’s a lot of money you’re saving, at a single stroke. Look into how you’re staffing your company, and see where you can make savings.
– Use efficient chain supply management: Do you feel as though you’re paying too much for your supplies? then you probably are. Look at how your goods reach you. Who’s the middle man? What is he charging? It’s very likely that their charges are driving up the costs.
Look at creating shorter supply chains that get to you quicker. The quicker goods get to you, the more money you can make. As well as this, you’ll be saving a lot of money, having cut out the middle man.
– Create a risk strategy: As the financial downturn of 2008 showed us, any business can be at risk if the economy takes a hit. You may well be doing well now, but you need a plan in place. Think about what you’ll do if times get hard.
This is where you make a solid plan. Write in steps that you can implement when you need to. This is where your good relationships with your financial partners come in. If you have these relationships and plans in place, you’ll be ready for anything.
These rules are the rules financially successful people swear by. Try them yourself, and improve your own financial standing.
Author – Jennifer Scott