Business leaders tend to be good at many things, but they’re not always good at staying on top of their personal finances. Of course, it’s not that they lack ability; it’s just that they get caught up in their business finances, which aren’t quite the same thing. I think a lot of entrepreneurs, executives, and other high-producing leaders would benefit from pausing to focus on their own specific financial situations.
Getting On Track with Personal Finances
Yes—but how? This post certainly isn’t meant to be a comprehensive money management course, but I do have a few particular suggestions to make:
Be clear about your goals. What exactly are you trying to accomplish? To retire early? To retire well? To put kids through college? To get a sports car and a boat? To attain a certain lifestyle? Simply to have financial security? Know what it is you are trying to achieve with your personal finances.
Remember that money is a tool. Along similar lines, remind yourself that money isn’t something to acquire just for the sake of it—you want to do something with it, and it’s important to know exactly what that is.
Consider all your income sources. Are there different ways you could be generating money—whether through investing, selling books, freelancing, consulting, or becoming a paid speaker? It’s good to think through all possible ways of bringing money into your home.
Focus on clearing debts. As for immediate financial goals, paying off any outstanding debts is always smart—because once you do so, you’ll be able to seriously pursue those other big financial goals!
Save money. Personal finance is really all about planning for the future, and that means stocking money away for the long term. Meeting with a financial planner is the best way of determining how to save—but if you’re not ready to take that step just yet, it’s great to simply develop the habit of allocating money from each paycheck to a savings account.
Surround yourself with people who are smarter than you. Make sure you have people you can talk to about money, and receive wise counsel about your personal financial habits.
Of course, you’ve got to guide the finances of your company—but make sure you also set aside time to handle your own finances.
This article originally appeared in Dr. Rick Goodman’s Blog.