Taking Care of Business At Home A Personal Finance Checklist

Why would you not consider yourself a business of ONE person? Or your family as a business of 3 or more people? Well that is exactly what you are - "Me Incorporated", "I Inc", "We Incorporated". You truly must consider yourself a small family business. Like any business you have ongoing expenses (mortgage, rent, utilities, groceries), revenue (salary and other income) and major capital expenditures (house, vehicle, vacations, renovations).

Like any good 'household business', you need to do some planning. Set out a budget for the year, track your expenditures and retained earnings (savings). Yes, all of this looks, feels and is exactly like a well run business. On My Gosh! Don't rush out and buy an accounting package to run your household. And no need to take a crash course on accounting or bookkeeping. You can accomplish all your financial tracking and planning requirements with some paper or by using a simple template with your favorite spreadsheet package - Microsoft Excel or even with Open Office.

Just like a well run business, your household budget and tracking your spending is best served using a visible record of events; namely, financial records, bank or check register. It is just like tracking your road trip progress using a map. If you know where you are now, then you will have some idea when you will arrive at your destination. In life, money or finances allows you to get to your personal destinations or dreams. A visible financial roadmap of your 'Me Incorporated' finances, mapping your progress, seems logical.

Running your 'Household Business', like corporate business, requires a few processes to keep track of your finances:

1) Establish a yearly and monthly household budget. Consider all your expenses - weekly, monthly, quarterly and yearly outlays of money. You will be surprised at the length of this list and all the places you spend your money.

2) Track monthly your actually spending and income against the budget you established in step 1. This will help you see the 'peaks and valleys' of spending or seasonality aspect of your expenses. Over time, you will come to know these expense 'peaks and valleys' and this will help you maintain a positive cash flow. Bottom line: have money in the bank to pay all your expenses and still have some left over (retained earnings). Your single biggest challenge in running any household (or business) is always having enough money in the bank to pay the bills; especially, the unexpected ones. Having a buffer of savings will help with these 'peaks' in expenses.

3) Track all your bank account activity. Track and enter in your Bank or Check Register every deposit, every electronic (ATM, web, PayPal, debit machine) transaction and every analog (check, money order) withdrawal. And reconcile your bank statement every month. Know exactly how much money you have available in your bank account(s).

4) Especially track your spending through credit cards and lines of credit. These are potentially the 'run away' expenses. Remember only once a month do you see the visible record of your credit card spending. Compound that with the fact that most people have more than one credit card. This can easily result in multiple 'spending surprises' each month. Be diligent in tracking your use of credit card transactions. Breakdown the credit card expenses into their respective budget items - gas, groceries, clothing, entertainment, etc. This will help you separate normal household expenditures from other shopping incidentals. You will come to see your spending patterns and can now make adjustments. Just like your bank account, reconcile your credit card statement every month.

All this personal bookkeeping every month can be done with pen and paper or set up a personal finance and budgeting template using your favorite spreadsheet software. Using an electronic spreadsheet allows for all of the mundane calculations to be processed automatically, reducing monthly reconciliations to a simple 5-10 minute endeavour. Whether you choose an analog or digital approach to your personal finance bookkeeping, these visible records are the most effective way to plan and control your personal finances and reduce one of the major stress points in your life - Your Financial Health.

Taking Care of Business At Home A Personal Finance Checklist - To learn more about this author, visit Carl Chesal's Website.

Like this article? Share it with your friends

E-Mail | Print | More

Related Articles
To Successfully Obtain Business Capital Every Business Needs A Coach
	If you are a business owner the task of obtaining business capital can be very daunting. Most businesses fail because they have never been taught how to obtain financing and therefore they have no clue where to begi...
Sales Tips-"You Want Fries With That?"
	Since being introduced by McDonald's, this phrase has become a part of our language and even our culture. But the most important thing YOU need to know is, "Does it work?"
Business Travel: When You Are the Homefront
	Business Travel is stressful for the traveler. How about the folks at home? What can you do?
How Do African Businesses Get Start Up Capital?
	Hi again, sorry again for the long pause. It seems to be occurring more than what I would like, but things have been moving at whirlwind pace recently. Anyway, this is a question for all of you entrepreneurs, bus...
Want business success Stop neglecting yourself
	Burn-out is extremely common in business owners or anyone who works for themselves. One of the best ways to avoid burn-out is to make sure you're taking care of yourself on a regular basis.

---

Related Forum Posts
	Free Business ebooks
	Guerrilla Financing - How to Finance Any Small Business
	Book: 101 Best Home Based Businesses for Women
	Home Care Business Opportunity
	Re: Are Economic Recessions Good for Franchising?
	Finding creativity
	Where Do You Get Your Daily Business and Finance News From?
	Finance is the primary requirement of business