WHEN personal finance coach Randell Tiongson asked the audience at the recent Money Sense Live's Family Finance 101 seminar how many have made decisions they regretted later on, a number of hands went up. Randell was quick to admit that he, too, has made bad decisions in the past.
“People can be logical in business but illogical in the house,” he says. “At the end of the day, it's how we use money in the house that determines the quality of life. So treat your house like a business.”
Randell explains this further: “The household is an enterprise that operates like a business.” For instance, households have revenues (your income) and non-discretionary costs (bills). It needs efficient use of cash flow and wise allocation of resources over time. A household has assets and liabilities which must be taken into account in planning out one's personal finances.
Just like a business, the household calls for people to make logical decisions and promote efficient operations. To do that, here are some valuable tips he offered:
1. Money that comes in must be bigger than what comes out.
2. Be objective-oriented.
3. Observe the 20/20 rule: Prepare for retirement 20 years before you actually need to retire.
4. Come up with a budget. Don't take out wants; otherwise your budget will be like a New Year's resolution that doesn't get carried out. Prioritize needs.
5. Reduce consumer debt. “You can't even start investing if you have liabilities.”
6. Use the liquidity ratio. “If the ratio of your expenses to income is 85 to 90 percent, that is too high. The solution is not always to increase income.”
7. Set goals.
8. Use the integrated portfolio approach for financial decision making. Don't use emotions in financial planning, especially in investing.
Wise words from a wise family man.
Run your household like a business
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Good Job Randell.
I would include #9; getting Mentored by people who's been there & done that and experienced financial success.
God bless & more power to you.
Thanks for this. Just need to give credit to the Registered Financial Planner Institute for most of what I discussed in the said event.
what matters in a household is not how big or small the income is, what matters is how much is left for the future.
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Its true managing a household is like running a business the assets we own and the users at home which cause the rise and fall of expenses all are part of a household business administration. From every standpoint it is a business and we have to run it giving attention to even minute details which we often try to overlook. The way we make use of electricity, fuels, eating habits, insurance...vice versa shows how efficiently we can manage finance and plan strategies to keep the household running. So whether its your business outside or the way you run the household both has to run smoothly which lies in your hands.
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I think you definitely have the right idea for this. You really have to run your household like this. atlanta accutane lawyers
be logical in business but illogical in the house,” he says. “At the end of the day, it's how we use money in the house that determines the quality of life. So treat your house waist bag supplier
“The household is an enterprise that operates like a business.” For instance, households have revenues (your income) and non-discretionary costs (bills). It needs efficient use of cash flow and wise allocation of resources over time. A household has assets and liabilities which must be taken into account in planning out one's personal finances. Just like a business, the household calls for people to make logical decisions and promote efficient operations
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hello Karen Galarpe
you have rightly said that “At the end of the day, it's how we use money in the house that determines the quality of life. So treat your house like a business.”
David bill
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I think this is so important when you are trying to watch your money. You have to run it like a business. The idea is so good. orlando clear internet
Randell was quick to admit that he, too, has made bad decisions in the past.
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1. Let your budget dictate your needs and not your wants. Part of running a successful business is being flexible, but one of the most successful ingredients is being resourceful with your money. Let's call it your investment. Being flexible within a variable budget and not spending beyond your means is the key to success.
2. Build a strong team. In business there are competitors, but when it comes to running the home, your friends are not your competitors, but part of your team. It's like managing a project team. Enroll your family and friends to assist you. You do not need to do it all alone! Talk to one another and share ideas for cutting Ginault Watches
costs and getting jobs in the household done more effectively. Structure a different venue each week where you meet at someone's house to take time out, kick back and share! A problem aired is a problem solved. Make it your task each week to come to the table with one solution for saving money whether it is a coupon, a bulk buying scheme or hot deal! Like a business leads group, that way the other people in the group are also doing the work for you!
You are right about this... Treat your household as a business, but you forget one important thing: not all people are businessmen... That should be taken in consideration. Easy Saver Rewards
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Yes, especially during this recession period in the world economy, the need for household finance is greater than ever. Huskies for Sale
Thats a great idea. Run the household like a business. Only issue is, that your household might not feel like home anymore. cheap casual summer dresses
"Make your house a home" should be rule number 1:) I agree: run your house like a business, smooth and rational so that when you want to relax in it at the end of the day you can actually do that, because you have achieved stability by doing things in an organized way. Recently I decided to change some things around the house, including building a smaller room for guests, by making use of flat roofing, and I really need to take into account 2 aspects that were mentioned in the article: setting up goals and a budget.