Becoming Financially Savvy

7 Tips on Better Money Management for You and Your Clients

Chances are you work with a number of small business owners who look to you for financial advice. And just because you are a financial professional doesn’t necessarily mean you’re the model of financial prudence. We all need a little advice now and then. So whether you yourself could use a few guidelines or your clients could use the encouragement, here are 7 tips on better managing money:

1. Delay gratificationThis is something we try teach our children; they need to develop their ability to delay gratification. Otherwise they become a spoiled lot expecting to get what they want immediately. Do you know any adults who behave this way? Unfortunately, there are countless individuals who do, and the majority of them end up spending their fortunes before they have time to plan what to do with it. The same applies to business owners who may want the newest gadget in hopes of improving their professional image or keeping up with a neighboring business. When you learn to delay gratification you grant yourself the time necessary to behave wisely and determine the best course of action for your business and your money.2. Scoff at wealthThere aren’t many people who don’t aspire to a better standard of living. We’re not asking you to discard those dreams of improving your lifestyle while increasing your wealth. But when the big pot of gold becomes your final destination, you’ll find your standard of living hasn’t increased at all, just your ability to spend money. When you develop the ability to scoff at unnecessary and inordinate spending you are more likely to safeguard your money, using it more wisely and ensuring that a portion is saved for later.3. Pay yourself firstYou are, after all, the one earning the money; shouldn’t you be the first to be compensated? Often after receiving a paycheck we ensure our debts have been paid, the groceries have been purchased and the gas tank filled. For most of us the IRS takes their cut right off the top. Shouldn’t you be next to take yours? Financial gurus strongly suggest saving ten percent of what you earn, skimming from the top without a second thought. Once you get in that habit you’ll find it’s not too difficult to live off what remains, and you’ll grow a healthy savings account in the process.4. Budget, budget, budgetWe all know the adage: When you fail to plan you plan to fail. No matter how large or small your income you’ll find that unless you have a plan for how to spend it, your “needs” expand to consume it entirely. And the best way to budget your money is to create a document detailing how much goes where and when. After that you must vow to honor that budget; otherwise it becomes useless to you (and your bank account).5. Put your money to workConsider that interest can be a horrible task-master, demanding that money you’ve charged earn your creditor even more in interest. But now consider how interest can work in your favor. When you invest your money, interest goes to work for you, earning more and more even as you vacation and sleep.6. Increase your ability to earn moneyAs a business owner you realize that in order to grow your business you must increase your ability to earn money. Once you set a goal to do just that you’ll find your interest and abilities increase to accomplish that goal. You’ll find ways of seeing that it happens. You will learn new skills in order to attract more clients. You will develop more effective marketing techniques to promote your business.7. Ensure a comfortable futureThe self-employed enjoy many perks. But (as Spiderman would tell you), with great power comes great responsibility. You can no longer rely on an employer to help prepare for your retirement; that is solely your job. So if you haven’t yet made an effort to build your own retirement account-that should be your first matter of business.

Just because we work in this industry doesn’t necessarily ensure we’ve managed our money well. Thankfully, it’s never too late to start. And once you do, you’ll find that practicing what you preach has an astounding influence on your clients.