Money is tight for many people and businesses these days, with inflation at an all-time high and pressure on the economy from many sides at once, from the impact of the pandemic on shipping and the war in Ukraine.
Despite the challenges, there is good news: it is possible to use your money and resources for yourself. Even if your budget is tight.
Money can be a powerful tool whether it comes to you in a flood or a trickle. Quality trumps quantity when it comes to how you direct that flow. Think of a garden hose: even a small stream can be turned into an arcing spray and reach further if you put your thumb in the right place above the nozzle.
When things get tougher financially, you can better assess what’s working and what’s not—adjusting your approach and applying pressure where necessary to increase your earning power. This is true for personal finance as well as business. And the hard work you do now can help you even as things get better.
There are several steps you can take to ensure that you improve the quality of your personal life and/or business, often simply by making adjustments.
Take the time to evaluate how your finances are doing
Before you start adjusting your cash flow or making major changes to your financial strategy, it’s important to take the time to gather a complete financial picture.
Whether you’re evaluating business or personal finance, the first step to making your money work for you is to get a clear understanding of what it’s already doing. Is it flowing down the financial drain instead of nurturing growth in your life?
The answer to this question can be very different for different people or companies. We all have different goals and values.
When we know the answers related to our situation, it is important to evaluate how to make adjustments to change the results that need to be changed. As LifestyleInvestor, Justin Donald says, “Whatever you do, take action. If it doesn’t work, turn around and do something else, but don’t do anything.
It’s scary easy to let malnutrition get in the way of financial health. That’s why periodic audits are helpful: they illuminate the drains so we can take steps to stop them. Try scheduling a yearly or monthly routine: good habits can lead to health and wealth.
Here are a few areas to consider for potential savings when doing a financial evaluation
1. Subscription Services
Have you ever felt like you haven’t used your streaming subscription in months? Take some time to decide how much use a streaming or magazine subscription makes the price worth, and then estimate how much time you’ll spend reading those articles or watching your favorite shows. If you have an unread document in the corner of your desk or haven’t watched a show in weeks, it might be time to consider canceling your subscription.
2. Expenditure and advertising
This is less applicable to businesses than to individuals, but even individual budgets can be affected by unnecessary Adobe Cloud subscriptions that you can use to complete one project in a year. -gone and then you forgot. As a business owner, you can periodically evaluate SaaS products to determine if the cost is justified in terms of time savings and increased productivity. If not, you can consider other options.
It’s also wise to have your marketing team evaluate where your advertising dollars are going. Do you regularly take ads in newspapers with declining readership, or on websites with firewalls that may block impressions? Perhaps it is time to reinvest those funds in other, more efficient ways.
3. Interest rates
Are interest rates working for you or against you? Take a look at your investments and debt to decide if there is room for improvement. With debt like loans and credit cards, check your rates periodically to see if yours has gone up. With a credit card, your best bet is to pay in full each month and avoid the entire fee, but if you need to finance an emergency purchase, it’s important to know how much you’ll be paying. you ahead of time.
Likewise, if you already carry a balance, you may find a low-interest loan or balance transfer card that can save you a lot of money. Now may not be the time to refinance, but if you have other loans — such as small business loans or private student loans — you may want to consider shopping around. the better deal you are. Just be sure to read the fine print to avoid hidden fees.
You can do the same with investing. If you have more than $1,000 in a savings account, it may be time to look for a house with a higher income for that amount. This is an extreme example, but be careful with your investments and look for higher growth opportunities (depending on your risk tolerance) from time to time. Just be careful not to make rash decisions. This is where a good financial advisor can help.
4. Cutting section
Part of your financial health assessment should include a list of needs vs. Your team of ten people probably doesn’t need an enterprise edition of project management or email software. You probably don’t need the most expensive version of Zoom or Dropbox. Are there alternatives to some of the more expensive programs available to your team? If so, the dollars you collect can support your team or increase production.
You can use the same strategy for personal finance. Maybe you enjoy a glass of red wine every night with dinner. Finding a quality $10 bottle instead of your typical $50 wine can add up to huge savings over time. You might be a cinephile. Instead of a $15 movie ticket at the theater, you can find something to rent online for $5. You can put the dollars you save each month into a vacation fund or investment portfolio.
When you cut fat, don’t lose muscle
Assessing your finances and finding ways to adjust your spending to savings is an important aspect of improving your financial health. But you can do it far. Economics, even in business, is not about the simple equation of dollars and cents. Sometimes a little extra spending in the right area, even if it hurts now, will lead to increased wealth down the road.
Most of us are familiar with this principle. We know that if we buy cheap hiking boots, we’ll end up with blisters, and our soles will probably give out after a few outings. And then we went back and bought hiking boots and ended up spending more than we would have if we researched, stocked up, and bought the more expensive product.
This may not be so obvious in business. Often when we cut corners we start looking at employee pay and benefits packages and start with layoffs. Sometimes it is necessary. But it can also cause unintended consequences.
Employees are more than business units, and they can add value in unexpected ways—especially when they feel valued and committed to their employers. They hold institutional knowledge and build relationships for your business. It’s worth the extra time to evaluate other types of expenses before dismissing people. Over the top? Consider leaving the office and going completely remote, or adopt a hybrid schedule to reduce heating and cooling costs.
Employ team members with strong skills, and continue to invest in them through training and wellness programs. They in turn will contribute to your company’s fortunes and can mean the difference between feast or famine in tough times. Remember that some forms of production are difficult to measure and do not translate into spreadsheets and charts.
A few tips to improve your business and personal financial literacy and lifestyle
- Buy durable, high-quality products when you can, and check for warranties and if a company stands behind their products.
- Try not to make purchases on revolving credit. Save before buying, or find ways to make an investment that pays enough interest to pay off the money
- Consider passive income options like real estate investing to provide you with income
- Learn about your investments, the products you buy, and the economy—your economy—and make informed financial decisions, not rashly.
- Invest in people. Treat your employees well by understanding that their value goes beyond simple performance-based productivity
- On a personal level, cultivate friendships with people who are smart about money
When you think about how you spend money, think about quality, not quantity. Invest in the best quality you can, when you can. Look at the guarantee and the improvement of efficiency: try to buy once and enjoy goods for many years.
Do your homework, and do periodic evaluations. Note any big decisions from last year and admit if last year’s big decisions are not the right choice for you today. Don’t rush to buy, and don’t make any investment decisions. Visualize your values in your work, life, and business—and those choices will begin to reward you.
Spending some extra time and extra cash can make all the difference to your financial health and lifestyle.
By Peter Daisyme
The Epoch Times Copyright © 2022 The views and opinions expressed are those of the author. They are for general information purposes only and should not be taken or construed as recommendations or solicitations. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or other specific financial advice. The Epoch Times is not responsible for the accuracy or timeliness of the information provided.