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Managing Personal Finances Like a Business

Many people don’t think about their lives as a business, but a lot of the lessons we learn at work can serve us well at home. For example, most of us deal with money in some way at the office, even if we’re not accountants or CFOs. But then we take a more relaxed approach when it comes time to organize and manage our personal finances.

Here are five strategies for replicating the diligence you have for money matters at work in a home setting:

  1. Remove emotions such as anxiety from the equation. This is easier said than done, but viewing the situation objectively should give you a clearer picture of your finances. Logically, where should you invest? How much should you put toward retirement and how much toward your children’s education?
  2. Manage your personal finances on a regular basis rather than letting tasks pile up. Set a weekly or monthly meeting with yourself or your spouse if you have to. Use this time to balance your checkbook, review your statements, and do your filing. This way you can stay on top of your finances, make changes if necessary and make timely decisions.
  3. Devote yourself to developing greater financial skills. Just as you continuously learn on the job, pick up some new financial skills at home. Figure out which skills you need to improve, whether it’s budgeting or choosing investments, and take steps to improve it. This doesn’t mean you have to become a certified financial planner and take it all on yourself. Find out what kind of help you need and ask your financial advisor if he or she can help or refer you to someone else. Outsource if you don’t have the time or expertise.
  4. Create a system that works for you. This could mean looking into budgeting software or free online tools that will help you manage your finances. These tools can save you the time that it takes to set up your own spreadsheets. Remember that through Pinnacle’s Online Banking, you can monitor your accounts all in one place. You can also transfer funds, initiate wire transfers, pay bills, issue stop payments on checks and download transactions. Transactions are processed in real time so you can access funds immediately.
  5. Write a to-do list. You may think of things during the week that you need to research. If it’s not urgent, jot it down on a list of things to tackle during your next “meeting.” Some items you may want to consider putting on the list for this fall include:

    • Review your health insurance options. Open-enrollment season is typically October or November, and many employers may change their offerings as a result of the health care reform law.
    • Set aside money for tax-saving home improvements. The tax credit for energy-efficient home improvements expires at the end of the year.
    • Convert to a Roth IRA. If you convert your traditional IRA to a Roth in 2010, you’re entitled to extra time to pay the tax bill on the converted amount.
    • Boost 401(k) contributions. You still have time to contribute the maximum amount to your 401(k) this year--$16,500 is the limit, but if you’re 50 or older you can contribute up to $22,000.
    • Draft a holiday budget. It’s never too early to start planning for the winter holidays.

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