A Business Approach for Home Finance?

A Business Approach for Home Finance?

Ever got to the end of the tax year and find yourself pulling your hair out at the messy state of your personal finances? We’ve all been there, even the most organised and proficient among us. But why is that we can be so thoroughly effective with money when it comes to managing budgets at work, then have such a nightmare with it all at home? It’s about time home budgeters had a look at the way companies run their finances and took on board some key lessons for dealing with personal cash. Here are three top tips to get you started:

1. Advance Planning

At work, we’d never go through the day, week, month or year without a rough idea of what’s on the horizon, the key upcoming deadlines or the ‘overarching strategy’ as some people like to say. So why do we not plan in the same way at home? When it comes to money, there are often as many requirements and drains on our resources as you’d find in the average office. But for some reason we’re more reluctant to get organised and think about planning our own inflows and outflows. Set up your own mini-stationery cupboard at home and start putting together a planner with key dates for your personal funds to get organised and avoid nasty surprises down the line.

2. Documentation

Likewise, consider the amount of paperwork and documentation that goes on in an average business’ finance department. While everyone finds this kind of administration a drag and no one would expect someone working on their personal finance to create as complex a system, a little effective note taking and record keeping can go a long way. Start with an Excel spreadsheet to work out your home budget and try making a detailed record for one month to get you started. After that you should have a clearer idea of what you need to monitor more closely and the best way to do so. Don’t forget to have a look at the range of online tools available to help people manage their money better; take some time to work out which is right for your situation.

3. Share the Work

Just as we have systems for proper paperwork in the office, we also have home systems for knowing who’s doing what. Too often in the home, people assume responsibility for different chores without any discussion. While divisions of work are important, some thought needs to go into making sure the right person is performing the right tasks and that everyone who needs to have input does so. Have a think about the bills you regularly pay, the administration of insurance policies, pensions and bank accounts. Is one person taking charge of all of this? Are they fully on top of it or could they do with a bit of support? Have a chat about how to share the labour and you’ll make light work of your home budget in no time.

These are just a few ideas for starters. Once you’ve got into the swing of managing your personal finances more like a business, you’ll begin to notice new methods and approaches all around you. Make a note of anything that seems effective and your household finances will resemble those of a FTSE100 company in no time!