Tag Archives: financial health

Take Action Now to Get Good Financial Health

Posted on by April 1, 2018
Today is a great day to take action now and get good financial health.
Today is a great day to take action now and get good financial health.

 

People always talk about getting healthy. When they do, they talk about losing weight, getting into better physical shape, or joining a gym. What they almost never talk about taking control of their finance and getting good financial health. This is a mistake. Finances are important. No matter where you live and how you get the money you use to finance your life, your finances are important.

 

When you are in good financial health, you are able to meet your debts in a timely manner, you have a sufficient bank account, and are not in the precarious position of living paycheck to paycheck. Take a moment now to look at your financial condition.  Ask yourself the following questions:

 

  1. Do you pay your bills on or before the due date each month
  2. When you pay your bills, do you have any money left in your accounts for things you want to do, things you enjoy
  3. Does your bank account have enough money to cover six to twelve months of expenses if you lost your job
  4. If you lost your job today, are you in danger of losing your home or car

 

If you answer those questions honestly, it will give you a good idea of the state of your financial health. If you are able to pay your bills on or before the due date each month it is an indication that you have good cash flow. This means that money comes to you when you need it and you are able to spend that money when you need to. Cash flow is important. If you cannot pay your bills on or before their due dates, it is an indication that you either need more income or you need to adjust your spending so that you have cash available when you need it.

 

Once you have paid your bills, if you have either no money left, or not enough money left to do the things you want to do, the things you enjoy, you do not have sufficient income. This is a clear indication that your financial health is not good. It is not good to be in a position where all your income goes to paying bills and you have no income for the things that bring you personal satisfaction and fulfillment. If all your money goes to your bills and then there is nothing left, you need to bring in more income. Your financial health will improve with an influx of additional capital.

 

If you are living paycheck to paycheck, you are not in good financial health. It may surprise you how easy it is for a person to lose her job.  Even if you do a great job and are a star employee, there are still a myriad of ways you can lose your job. These ways include the following:

 

  1. A fire at your place of business
  2. The owners of the company sell the business
  3. The company unexpectedly downsizes
  4. Changes in federal, state, or local law eliminates your position
  5. The company shuts down without notice

 

The newspapers, magazines, and blogs are full of stories about these types of things happening with businesses every day. These things are real possibilities. Any one of them could have a terrible impact on your financial health.

 

Be encouraged, the news is not all bad. No matter how bleak your financial health may be at this time, you can make changes and improve it. Here are a few ways you can improve your financial health:

 

  1. Look for ways to lower your expenses
  2. Create and stick to a budget that includes saving money on a regular basis
  3. Is there a hobby that you can turn into a part-time business to earn extra income
  4. One girl’s trash is another girl’s treasure, what can you sell for extra cash
  5. Find a second job or a better paying first job
  6. Look at finding a roommate to share expenses

 

Your financial health deserves just as much attention as your physical, mental, sexual, and emotional health. Do not neglect it. When you make plans to address your other areas of health, be sure to pay attention to your financial health as well. You will be glad you did. So, the question for you this magnificent day is, what steps will you take today to improve your financial health.

 

`Take Action Now to Improve Your Business’ Financial Health

Posted on by November 16, 2017

 

 

 

It is magnificent to take action to improve the financial health of your business.

Everyone has heard stories about celebrities, athletes, or trust fund babies who have lost millions of dollars due to their inability to have a clear understanding of their financial condition. This also happens in the business context. I have often been amazed at how many of my business clients have no idea what is the financial condition of their businesses. I ask them for sales figures or about their receivables, and payables aging and I am given blank stares in response. Often information that should be readily available to entrepreneurs is unknown. What is even worse is the fact that many e entrepreneurs do not have the ability to quickly get the information into their hands when needed. The basic information I am referring to is information such as:

* current income
* expenses
* cash flow
* accounts receivable
* accounts payable
* taxes due to local, state and federal authorities

Many entrepreneurs rely upon a bookkeeping service or an accountant to keep their financial records in order.For entrepreneurs without knowledge and expertise in basic accounting hiring an accounting professional is a good idea. However, that does not excuse the entrepreneur failing to get the reports from the professional on a regular basis and become familiar with the information. If you have hired an accounting professional to keep these things in order for you, that is a good start. However, you must go further than just a good start. Take the time and spend the money to have your accounting professional or someone on her staff explain all your accounting records to you so that you understand them. Keep in mind, accounting professionals are paid for their time. This means if you want them to sit and go over the reports with you in detail and to teach you what you need to know to use those reports, you will be asked to pay for that time. This is not an area to be stingy, pay the money and get the understanding.

 

photo credit: jeff_golden via photopin cc

 

Take the time today to get a clear understanding of the financial health and condition of your business by taking a long hard look at your accounting records. If you do not have any, get some. If you have them and don’t understand them, go get understanding. If you have them and understand them, start using them to take the financially appropriate actions in your business.

Every person who wants to be in business or who is already in business must get an elementary understanding of accounting principles, reports, and terminology. This can be done informally by doing some online research or formally by taking a basic accounting course at the local community college. A basic accounting understanding will teach an entrepreneur basic accounting terms and procedures that will help make it easier to run a successful business. Some basic principles, terms, and practices that are important include:

* account ledger
* journal entries
* accounts aging
* accounts payable
* accounts receivable
* cash flow
* balance sheet
* income statement
* profit and loss statement
* fixed expenses
* variable expenses
* cash method accounting
* accrual method accounting

If you are an entrepreneur looking at this list of basic items and do not know what all of them are, it is time to brush up on your accounting information. As an entrepreneur it is crucial to your success for you to know the financial condition of your business. Once you understand what each journal, report and statement is, you are in a position to compare the information from one month to the next, one year to the next.The financial information found in regular and complete accounting records should influence business decisions. It is a mistake to hire new employees in March if your cash flow statements show your business’ sales slow down to a crawl in April and May. A good understanding of your business’ financial picture, helps you make important decisions on things like expansion, when to hire new employees or if employees need to be removed from employment.

In conclusion, it is magnificent to improve your financial health. So, the question for you this magnificent day is, what steps are you taking to improve the financial health of your business and make best use of your accounting records?