Financial Literacy for Personal and Business

The last couple posts and a couple more FACETS Business Solutions focuses on financial stability, or the lack thereof, of British Columbians. With the world experiencing and trying to recover from an economic downturn, we zero in on how individuals are dealing with their own finances. The news is bleak; as stated by Paul Luke of the Province in his article More than half of B.C. adults admit having poor financial skills, adults are not saving money, keeping track of their spending, setting budgets, and 44 per cent of us are apprehensive about our future and retirement. On top of all of this, our kids are not learning to do what is necessary – they’re lacking financial literacy skills as well.

Well, it’s not like we’re born with a manual right? How do we learn to do what is right? Putting two and two together equals four, but how do we keep the four and make it grow? How do we avoid spending on excess? How do we save and invest, for the future? The information is out there, but it’s necessary to do the research.

We suggest treating your personal finances as we treat business ones. How? Here are a few tips:

1. Look at your earnings and set a budget for each category you need to spend for. In a business, the categories may include marketing expenses, travel expenses, office expenses; in a household budget, this can include food expenses, transportation expenses, and rent or mortgage expenses.
2. Keep a ledger of the ins and outs – this means set up an excel sheet and record every dollar earned and every expense paid
3. Set up different accounts, at your bank, and an automatic withdrawal system by which allocated funds are automatically wired into savings, RRSP, GIC, TFSA, and other varied investment accounts.
4. Look into purchasing life and critical illness insurance to help you in your retirement.
5. Ask questions. When you don’t know how to handle your finances, you won’t be financially secure. Find your neighbourhood experts and question them. We’d be happy to answer questions, and if we can’t we’ll refer you to other experts.

As a business, you would hire a good bookkeeper like us, FACETS Business Solutions, to record expenses and prepare your business finances for your accountant. If you want to run your household budget like a business, we’d be happy to work with you on the bookkeeping of your personal finances – call us to discuss a plan.