For a company to stand for a long time, to spread, to host new jobs for more people is an indication of good financial management . Although many professionals are behind this organization, you can apply two basic principles to manage your finances as efficiently as a company.
With planning, a series of economic situations can be foreseen so that no state falls by surprise and you always have an elaborate plan of action. The key to effective financial management is cash flow control, and you don't need to have an economics degree or be a mathematical genius to know about it. Just sit down and write down and do some math.
What will come and go for at least one year
If you want to know what economic situation will be put in front of you, you must be aware of the amounts of money you will receive, for at least one year and what you will spend in that same time. To do this you do not require as much rigor as a company but you do need to tabulate what you will receive on a monthly basis. The fixed and extra that you know is safe, that is, do not count on the money of which you are not sure if it will actually reach your hands.
The second concept that you must be clear about if you want to manage your finances efficiently is expenses. Get an estimate on your monthly expenses. You will not know what unforeseen events may arise at that time but it would be appropriate for you to have an emergency fund and in situations like this you would not have to use your regular income.
Having both amounts totaled, you will have to make a subtraction between them. You can find two results:
- You will receive more money than you will spend, we are in the case of a surplus.
- You will spend more money than you will get, that is, we are talking about a deficit.
Manage your finances according to the projection
Once you are clear about what scenario you will face, you can take action and manage your finances wisely. If you are in a year where you will have a surplus, it is time to look for ways to invest the money that will enter the scene and that does not fade away or end up being spent on irrelevant things. Depending on how much money we are talking about, you can: save or invest, in a small or large business. In any case, do not take lightly the investment project that you consider so that it makes you earn more money and does not cause losses.
If unfortunately you have achieved a year where the deficit will mark your steps, thank you to know in advance, you can change it: either by modifying your work to earn more money than initially contemplated, spending less than what you calculated or considering acquiring good credit, Always monitoring which rates are best for you and at what time the payment of the installments will coincide, so that they do not collide with your most economically demanding months.
If you control this flow you will know how to face difficult situations by applying the principles of financial management in your home.