Your Money and Your Mindset

Do you ever wonder about the impact of your financial  debt on your overall being?

I recently read two Psychology Today articles; the first article questions “does retail therapy really make people happy? And the other was about how people manage debt. I found both articles interesting but wanted to share more about the ‘how-to’ of money management and debt, so I’ve compiled the following information:

What I find even more interesting though is whether people should reduce their spending or increase their income? Renee Beeson gave me her opinion from a business owners perspective … 

As business owners, we often think more sales, more revenue is the key to attaining financial goals in our businesses, but that is not necessarily the case.

Consider this:  If you were driving without control of your car or were in the habit of steering with your eyes closed, would putting more gas in your tank make you more likely to reach your destination safely? Likewise, if you do not make well thought out decisions when it comes to business expenditures, earning more revenue or landing more sales will not improve your situation.

Take Control – Have a Plan!

Having a plan involves outlining a budget. Here’s an example:

Sample Company Budget January 2014
Category Actual Budget Difference
Inflows
Sales 12,500 10,000 2,500
Total Income 12,500 10,000 2,500
Expenses
Salaries 3,500 3,500 NIL
Utilities 250 250 NIL
Rent 1,000 1,000 NIL
Office Supplies 75 50 25
Marketing and Promo 150 200 -50
Telephone 100 100 NIL
Membership dues 50 50 NIL
Interest 200 250 -50
Consulting Fees 0 100 -100
Insurance 120 120 NIL
Total Expenses 5,445 5,620 -175
Net Income 7,055 4,380 2,675

Adjust your plan. Don’t forget to also record all unplanned spending. If you are spending more than you anticipated on some items or find yourself accumulating debt, adjust your plan. Pay your debts. Stay in control. Setting budgets and making comparisons on a regular basis will help keep you on track financially.

 

There’s some food for thought! Thanks Renee.