Daddy Financials

When I finally decided to use a budget, I noticed myself looking at numbers and playing with the figures and trying to maximize interest on money we're not using and all the little things I used to look at when I was studying cashflow statements and balance sheets in my college Finance and Investments courses. It was actually pretty cool. Big thanks to all of you who encouraged the use of a budget. I thought I was doing enough with just expense tracking, but this is a much better picture of my financial health.

Looking at you financial life like a business can give you more of a perspective on where you stand with lenders and also help you understand investing in general. Would you put money into a company that owed $500,000 more than it was worth with decreasing revenue streams? By that same token, do you expect to get a decent mortgage if your debt far outweighs the value of your assets?

By doing this you can see just how much you are maximizing your revenue, if you are getting a decent return on the funds you are not investing, if your investments are bringing up your net worth or dragging it down. There are numerous ways to look at it and also many ways to over analyze the numbers. Bottom line is, take your finances as seriously as you would if you were investing $1 million into a company, think of yourself as that company.

How can you bring in more investors (banks, mortgage companies, 0% credit cards, etc.), instead of having cash sitting in a checking account, make that extra $5/month by putting it in savings, try to bring down that cable bill by cutting HBO and invest that $15/month to better your future prospects. If not cutting costs, how can increase revenue to make more funds available for investing? A small 2nd job can provide enough capital to fund the new project you have set for your expansion (House) with the help of some investors of course (mortgage). Think long term when it comes to investing, you want to build the next Johnson & Johnson or GE, not another .com bust. Little thing like these (on a much larger scale of course) are what successful business do, make your dining room the boardroom for your family. And don't pull an Enron and fudge the numbers just to make yourself feel better, your the CEO, make yourself accountable.

By the way, this budget has helped me find that food is the biggest variable expense we have in our house. We are hemorrhaging money at a rapid pace and something has to be done. I am considering cutting out supermarket shopping all together and making us an all-COSTCO (Wholesale) household. I'll crunch the numbers and see if it will work out.

Thanks for reading

I Love You Baby