There are a lot of things we’ve learned or have been told that are good for us. For example, we know that we shouldn’t smoke or drink too much, we know that regular exercise and a healthy diet will make us strong and feel good, but what is rarely discussed is the importance of raising our financial IQ.
The state of your financial IQ becomes even more important if you are a business owner. Keeping track of your finances is crucial if you want to make sure that your business is healthy. But, how can you increase your financial IQ? Here are some useful tips.
Keep records of everything
The number one thing you need to do is start keeping a record of every single dime that comes into or leaves your business account. In order to make sure that you’re accurately logging your expenses and incomes, make sure you organize your receipts – such as bills, invoices and records of payments you’ve made to your employees, as well as any income you’ve generated. This way, you’ll have a clear picture of the amount of money that enters and exits your business, which will help you make any necessary adjustments if you notice that things are not going great.
Use a bookkeeping software
Now, you won’t have much use of all those numbers on paper unless you know what to do with them. You can either hire a bookkeeper – full-time or part-time – or you can invest in a reliable bookkeeping software. The latter is a much more budget-friendly option. Either way, make sure you use something or hire someone that will help you make sense of all those numbers in front of you so that you know exactly where you stand, business and money-wise.
Diversify your portfolio
Many business owners make the mistake of putting their entire funds into a single prospect. This may turn out to be detrimental for your business especially if you make a poorly-calculated decision. That’s why you should step out of your comfort zone and diversify your business portfolio. Search for different investment and trading options and learn as much as you can about them. You can find numerous useful guides regarding trading options for dummies that can significantly aid you in identifying new prospects and opportunities.
Educate yourself
Aside from doing all that’s in your power to stay on track with your finances, you should also make sure that you educate yourself as much as possible. Simply put, the more you know about the subject at hand, the easier it will be for you to handle it the right way. Besides, if you become really good with managing finances, and especially if you decide to pursue some sort of a degree in that field, you might even become qualified enough to take care of your business finances on your own, or even expand your business portfolio by offering the same services to other companies.
Focus on the future
By teaching your kids financial responsibility early on, you’ll make sure that not only will they one day make much better calculated financial decisions but also learn the real value of money. So, open up a savings account for your kids and teach them how they can start saving money. Share your knowledge with those closest to you and make sure that you do everything you can to secure their financial future.
Stay on track with the latest updates
Finally, read the newspaper, listen to podcasts and search the internet for the latest news regarding the world of finance. This will allow you to always stay up-to-date with any changes you need to implement, as well as any new trends. The advantages of staying on-point are opulent, including the ability to take action as soon as possible and make smart financial moves whenever the opportunity arises.
And there you have it. Boosting your financial IQ will bring you a world of benefits, both business and personal finance-wise. So, don’t miss out on a great opportunity to boost your financial situation by dedicating some time to increase your knowledge about the finances, thus ensuring a brighter future for both you, your family and your business as well.
Marco Lopo is a Sydney-based business consultant and a marketing analyst. He writes about business and lifestyle. He thinks that’s the perfect opportunity to present himself to a wider audience and receive recognition. In his free time, Marco enjoys music, travelling and also is a big reading enthusiast.
