How to Think Like a Chief Financial Officer in Your Personal Finances

Many people handle money well at work, but horribly at home. There's a different mindset when you're expected to act like a professional. What if you handled your personal finances with the same professionalism a CFO takes care of business? Discipline and professionalism can add a lot to your personal financial future. Just because no one is watching you doesn't mean you can be irresponsible with your finances at home.

Act like a Chief Financial Officer (CFO) and take control of your money:

1. Live by your budget. Even the wealthiest companies have budgets that each department and manager are expected to follow. As your own personal CFO, you should prepare a monthly budget and chart any discrepancies. Then make the necessary budget adjustments.

  • If you don't have a budget, creating one is the first order of business.

2. Manage your debt. One of the biggest responsibilities of a CFO is the debt structure of the company. While you might not have the option of issuing stocks or bonds...

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Expenses You Can Cut Right Now

Saving money isn't fun, but it doesn't have to be painful. It's not easy to increase your income significantly, but you can realize a significant savings in many areas of your finances with a little work. Just a little sacrifice in several areas will lead to more money in your bank account.

A few options might actually be more enjoyable than your current situation. Save money each month by cutting your expenses in several areas:

1. Health Club membership. How often do you really use your gym or health club? How much does each trip cost you? If you're paying $75/month and only use it three times a month, you're paying $25/visit. Could you stay at home, use your running shoes, a jump rope, and some second-hand dumbbells, and get the same results?

2. Entertainment. Taking a family of four to a movie can cost $40 or more, and that doesn't include the incredibly over-priced snacks. A streaming service will only set you back $10/month, and you can watch all the movies you can fit into...

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Think Yourself out of Over Spending

Overspending, or under-earning, is a big challenge for many of us. Our eyes get a little big for our wallets, and we give in to impulse. Overspending is like overeating. It's the result of short-term thinking without giving the consequences full consideration. 

Here's how to eliminate your overspending habit:

1. Spend according to your budget. Of course, you already have a budget? Right? Make a budget and limit the amount you can spend. Ensure that you're also saving consistently. If you have the urge to purchase something, whip out your budget and make a responsible decision.

2. Remember, short-term pleasure can lead to long-term pain. It's practically a universal law. If it's pleasurable in the short-term, you're going to suffer in the long-term. The opposite is also true. A daily trip to the gym isn't much fun in the moment, but the rewards are great. A $300 pair of jeans might be satisfying today, but what about three months from now?

3. Give yourself space before...

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Adjust Your Perspective and Prosper

Improving your finances is not hard, you just have to make the decision to think and act in a certain way.  It's really about your mindset and and how you view everything.  When you start making decisions based on the right mindset, things will start lining up and your bottom line will grow. I encourage you to examine your perspective on the the following list of activities and see how these things can benefit your finances.  

1. Be prepared for any financial emergency.

Everyone needs an emergency fund. While the lack of an emergency fund is common within every age group, in our current economy many people never really totally establish an adequate emergency fund.

Action: Strive to set aside 3-6 months of living expenses and you'll be prepared for most financial emergencies. It may take a while to get accumulate this, but once you do, you will not regret the process it took to get there.


2. Trigger your employers maximum 401(k) matching.

If your...

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Before You CoSign on a Loan...

Have anyone asked you to cosign a loan with them? Especially if this is their first loan, the financial institution is likely to ask them for a cosigner, such as their parents. However, cosigning a loan with anyone carries responsibilities.

It's crucial for your own financial health to understand what your part in the loan could amount to.

If you're thinking about becoming a cosigner, consider these tips:

1. Evaluate why you want to cosign.
If you're cosigning a loan out of guilt or an obligation, then these aren't the best circumstances for serious financial decisions.

  • You may be tempted to help a family member or friend, but cosigning a loan is a big responsibility. If this person defaults on the loan, then you may be responsible for the entire amount.
  • You're putting the relationship at risk by signing a loan because things may not turn out the way you expect.

2. Understand the default consequences.
If the person who is asking you to cosign can't make the payments, then you...

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8 Facts You Must Know Before Investing

It's crucial to investigate your investments before you commit your hard-earned dollars. During a strong economy, you might find it easy to pick profitable investments, but without adequate research, you're likely to struggle during more challenging economic circumstances.

Getting the most important facts can help you quickly determine if a potential investment is worthy of additional research.

Consider these facts regarding any investment opportunity:

1. How much risk are you willing to accept? The greater the risk, the greater the potential profits. How far into the future are you planning to invest? Do you need the money back from your investment at the end of the year, or in 25 years? What will the money ultimately be used for?

2. How does the company make money? By understanding this simple fact, you're in a much better position to make intelligent decisions regarding the viability and outlook of the firm.

  • It's challenging to invest in a company you don't understand. This is...
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Determine Your Financial Health

You probably get regular checkups from your dentist and doctor. Even cars and pianos require regular tune-ups. Most individuals fail to do the same for their financial health. While there are experts that can analyze your finances, most of us are entirely capable of measuring our own financial health. However, we either don't think about it or choose to avoid it.

Determining the financial health of a company requires looking at several things. The same is true for your personal finances. Follow these steps and give yourself a financial check-up:

1. Determine your net worth. Your net worth is the number you're left with after subtracting your debt from your assets.

  • The primary examples of assets are cash and other securities, the current market value of your personal property, and the equity in your home.
  • Essentially all of your debt is your liability. It's the balance remaining on your credit cards, automobile loan, mortgage, and student loans. Any other money you owe would be...
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Reconsider a Few Financial Tips

There are many financial tips we’ve all heard over and over again. But many of these tips aren’t perfect or don’t apply to every person’s individual situation. Instead of just following tips that you heard about on television, take the opportunity to consider if the tip is really appropriate for your situation today. You might find a better alternative that makes more sense for you right now.

Here are some financial rules that are popular to follow:

1. Cut your expenses to have long-term financial success. Most of the well-known personal finance gurus focus on cutting expenses and saving money. I am going to assume that you already know you shouldn’t spend money unnecessarily, but there’s only so much you can cut from your expenses. Once you have cut your expenses as far down as you can go, and you find that that is not enough, it may require you to consider making a lifestyle change that you may not be comfortable with.

How about increasing your...

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