Chief financial officer. Chief executive officer. Imagine that! The combination of words that make up these title spare nothing in creating an aura of control, power and success. Indeed, the bigger the corporation the more hungrily holders of such titles fan their feathers in a show of dominance. While not all of us will get there – corner office with a view, personal assistant and luxury sedan – the same goal can still be realized if we manage personal finance as mindful as C-level executives mind other people’s money.
[dropcap]B[/dropcap]uilding a personal fortune to last beyond retirement is the underlying goal of every hustle out there. Be it that we are barely making through Mondays in our eight to five; or dabbing somewhere in between running a consultancy; or full-blown entrepreneurs.
If you have been employed in a proper corporation, you must have noticed how every effort is made to account for every shilling spent. In professionally run companies, entire departments – at the very least multi-dollar software – exist just to cater for this end of the business. Here are a few things that you can small-scale onto your personal finances and watch as the in-tray spills over.
1. To manage personal finance like a boss is minding your taxes
Minding your taxes involves simple undertakings as minding where you buy your condoms. More complex affairs like tax returns lie at the other end of the spectrum. Condoms you ask? Buying condoms from a drug store is likely to be more expensive. This is because the proprietor in protecting their margins by passes on the costs of indirect taxes such as pharmacy regulatory fees. At the supermarket, value added tax may be the only levied charge on your pack of condoms.
Pay as you earn taxation returns are calculated from net earnings after obligatory deductions have been factored. This simple tax know-how reveals the savings you might make when enrolled to a retirement benefits scheme that are often deducted before tax in most jurisdictions. Considering tax bands is also important when negotiating for a pay hike. Taking responsibility of managing personal finance involves ensuring that the pay hike does not take your earnings into the next tax bracket such that the net gains negotiated are all lost in taxes.
2. Accounting for expenditure ensures that you manage personal finance to riches
If you have worked at a proper corporation you might have noted the requirement to provide receipts or credit card trail to back up your expenditure whenever on company duty. Similar expense tracking efforts can be applied to manage personal finance. They may include such means as astute and disciplined budgeting, receipting of expenses where possible – such as keeping supermarket till receipts for expenditure tracking. Employing caution when using debit cards for refueling your car. Even keeping the bill from your lunch expenditure or from fast food outlet whenever you spoil the kids with pizzas and greasy heart unfriendly stuff.
From such measures it becomes easier to make such decisions such as going for the backyard barbecue via-vie eating out.
3. Don’t be scared of making hard decisions
Whenever companies fail to make sufficient returns on their investments, the human resource team and other management teams meet up to discuss cost cutting measures. Often, cost cutting invariably involves the hardest decisions of them all: Job cuts. Irrespective on the possible public relations nightmare that can come out of such a move, this route is well-traveled by many executives.
Similarly, individuals must be ready to make decisions that have the potential to make them lose face socially. For instance, it may mean that the four-wheeler, V12 engine fuel guzzler is traded for a hybrid Toyota. Or even ditching your car for public transport as a tactic to manage personal finance to riches. Exotic holidays may need be substituted for picnics, designer wear for retail wear. Simply put, what needs to be done ought be done.
4. Be on the look out for new revenue streams
To shore up the bottom-line, companies are always seeking to diversify revenue sources, expand regionally, capture new markets and introduce new products and services. Similarly, individuals keen on managing personal finances ought use all that is at their disposal. For instance, have you thought about making your hobby a money-making venture? That kitchen garden could bring in a few quarters from the sale of organic produce. All that is needed is a bit of innovation and the will to do it.
That illustrious title of Chief Financial Officer might as well be yours if you pay more attention to managing personal finance. You too might get to fan your feathers as your personal fortune continues to swell.