thai news today: Taking Care of enterprise At Home ? A Personal Finance Checklist ...

Sunday, August 28, 2011

Taking Care of enterprise At Home ? A Personal Finance Checklist ...

Care Credit

Why would you not think yourself a enterprise of One person? Or your house as a enterprise of 3 or more people? Well that is exactly what you are ? ?Me Incorporated?, ?I Inc?, ?We Incorporated?. You truly must think yourself a small house business. Like any enterprise 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 funds for the year, track your expenditures and retained revenue (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 box to run your household. And no need to take a crash course on accounting or bookkeeping. You can perform all your financial tracking and planning requirements with some paper or by using a simple template with your favorite spreadsheet box ? Microsoft Excel or even with Open Office.

Just like a well run business, your household funds 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 develop 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 each year and monthly household budget. think all your expenses ? weekly, monthly, quarterly and each year outlays of money. You will be surprised at the distance of this list and all the places you spend your money.

2) Track monthly your absolutely spending and revenue against the funds 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 cost ?peaks and valleys? and this will help you voice a determined cash flow. Bottom line: have money in the bank to pay all your expenses and still have some left over (retained earnings). Your particular biggest challenge in running any household (or business) is always having sufficient 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 catalogue 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 prestige 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 prestige card spending. Blend that with the fact that most population have more than one prestige card. This can absolutely effect in complicated ?spending surprises? each month. Be diligent in tracking your use of prestige card transactions. Breakdown the prestige card expenses into their respective funds items ? gas, groceries, clothing, entertainment, etc. This will help you cut off 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 prestige 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 small endeavour. Either you choose an analog or digital coming to your personal finance bookkeeping, these visible records are the most sufficient way to plan and operate your personal finances and reduce one of the major stress points in your life ? Your Financial Health.