Think of Yourself as a Corporate Banker to Improve Your Finances

If you are like millions of people, you may have trouble managing your household finances. Little details such as remembering how much you spent at the store or when a bill is due may escape you in the chaos of everyday life. As a result, your finances may suffer.

If you are looking to improve your personal finances, one of the best strategies you can use is to think of yourself as a corporate banker looking to make your business (in this case your personal finances) more sound. You can begin by considering your cash flow management for your business, i.e. your personal budget. A business does not allow employees or managers to “forget” how much money they spent when purchasing inventory or taking a business trip, and such behavior should be unacceptable to you personally as well. You must record how much you spend on a daily basis, at least until you become more conscious of your spending patterns.

Corporate finance for large institutions within the U.K and the U.S. also involves raising capital. Likewise, you should take a look at your personal capital. Is your monthly income high enough to cover your monthly expenses? If not, once again, think of yourself as a corporate banker. What can you do to increase your capital? Maybe you will need to ask for a raise, apply for new jobs with higher salaries or take on a second job.

Once you have control of your spending and you have increased your capital, the next move may be investing to grow your money. Like a corporate banker, you should look both to your short-term investment needs (such as saving for a down payment for a house in a conservative investment vehicle) as well as your long-term investment needs such as saving for retirement.

Many of us are lazy when it comes to our personal finances. We use the excuse that we are bad with money or that we don’t remember the details. However, if you think of yourself as a corporate banker managing the money for a large business, suddenly you may feel that you need to be more responsible. You may begin to make decisions about your personal finances based on facts and logic, rather than emotions. Instead of thinking, “I want this”, you may think, “Is this purchase best for my finances at this time?” When you take the emotions out of your financial decisions, it is easier to make better decisions and to make your bottom line healthier.