A lot of people lose this concept. No one truly has to be a manager of a bunch of strange people and pay out ridiculous salaries in order to be a CEO. I think this has more to do with out mindset as opposed to a living reality. We typically take whatever job we go to more seriously than thinking of how to run your own home. This is especially important if we have children. Children, will always (should) give us all an incentive for being fiscally more responsible.
First as a CEO I would think in terms of budgets. This would be initiated by checking your bank account and look up your spending trends online. Look at how much you spend quarterly (every three months) on gas, utilities, laundry, haircuts, etc.
Once those are compiled take the average of what you spend every month and put the high end amount into that fund before you even start to think about spending another dollar outside of the business. This is what most CEO’s would call forecasting and do efficient planning for the future. So don’t think of going to a job as working for the man, but do it more of an incentive to fund your business at home. This is where home owning could reap many benefits. But, if you choose to rent you can early start on retirement, since most retirees tend to live in apartments anyway.
After budgeting has been established, how about setting up the miscellaneous funds. This is what Dave Ramsey calls the “blow” fund. Yes we all blow some amount of money at some point and time, but it is more important to put a limit on what we actually blow. I would tend to make this number higher so that you don’t get yourself into trouble after paying all of the other monthly bills. A very smart idea would be to have the bills that don’t necessarily have to be paid by card or check to be held as cash. It’s old school, but old school works. Don’t ever trust what a bank or a computer tells you. There job is to get your money. So that also means, you are the one that keeps track of the “ACTUAL” numbers on the checking account. I can’t tell you how many times I trusted the bank to have the correct numbers for this and that, but always found a surprise of a negative number because such and such deposit didn’t go through on time. Those were crazy days.
Once your evaluations are accomplished, you then have a better idea on what needs to be cut back on for the entire month. Maybe you need to cut cable and run Netflix and Hulu instead. Maybe, you need to unplug more things to shorten the electric bill. Maybe do laundry less often to save on the water bill. Instead of paying the trash man…go to the dump instead. All of these things can do wonders to supporting your home business.
Stay out of payments as much as possible. I typically tell people if you can’t pay cash, then don’t do it. I can’t tell you how many people I know that just went into the work place as opposed to going to college and their net worth is more than me! And I have a Master’s Degree! Lol! They were the ones to steadily accumulate income as most of us without scholarships dubbed into debt to get a degree and get a better life. Not even attorneys make out that great anymore, because they are dependent on the economy (the people). So when the people aren’t doing good, neither are they. More on this in a later post when I speak of “famed professions”. Staying out of payments include cars (buy one on Craigslist), unnecessary furniture, computers, and to include cell phone contracts! Prepaid is the way to go. They try to hook you with the early termination fee, but after calculating the fee over the lifetime, you still end up saving more money!
So you are not pretending you are actually the CEO and CFO of your home, because you are it! The home will only survive with you in control and being the manager that you are called to be. So be on the lookout for my new book, “American Dream or American Trap: How the Cliche Got us All!”