Why do people handle someone else’s money better than their own finances? People at work have a responsibility to someone else, so they make better decisions about it. What if you handled your finances with the same professionalism as a CFO who takes care of his/her business? Hold yourself accountable for your money and you’ll be wiser with your choices.
Act like a CFO and take control of your money:
1. Be your own budget. The budget is king in most businesses. It determines what money can be allocated where, and the budget is what most CFOs are held accountable to. Start by creating your own budget for your accountability. Make a monthly plan that can be adjusted if necessary.
• You can’t be a CFO if you don’t have a budget.
2. Control your debt. One of the biggest responsibilities of a CFO is the debt structure of the company. Your family doesn’t have stocks or bonds to finance your household, but you do have access to debt. Credit cards and personal loans are good examples of this.
• Debt sinks businesses and causes layoffs in companies. Avoid disaster by managing your debt.
3. Plan your finances. Companies have long-term plans, and so should your family. Do you want to live debt-free? Do you have a big holiday planned? Are you saving up for a big expense like a car?
4. Increase your financial skills. In this case, you can’t fire yourself, and you would still need to be at your best. Learning and improving are the best ways to see better results from your financial plans.
5. Maintain excellent records. Financial officers live and die by the records they keep. They need to because it’s what they are held accountable to. Keep your records immaculate so that you can learn from your past and plan a better future. It also helps you stay on the good side of the tax authorities, and it can detail how your family is actually doing on paper.
6. Focus on profit. In a household situation, profit can be thought of as savings. Create situations where you have money left over to save and invest. Companies that routinely turn a profit are successful. Your family will also be successful if you’re continually saving excess money.
A good CFO is an expert, but that doesn’t mean you need a degree to handle your own finances. Choose to put effort into your money and you’ll soon see that the effort is worth it. You might not have boards and investors to report to, but your efforts matter to your loved ones. That’s just as important as any job or career.