5 Steps to Treating Your Own Personal Finances Like a Business

As a CPA, I’ve worked with numerous businesses from small to mid-size. While they’ve ranged in annual revenue from a few thousands of dollars to millions, each business knew clearly what they had earned, spent, owned and owed during the year.

There are many ways that a business operates that you should copy with your own personal finances.

On the other hand, individuals tend to be far less organized with their finances. I’ve done enough “shoebox” tax returns (where people literally just throw all their tax receipts in a box and give it to their accountant at the end of the year) to know that there’s a lot of room for improvement here.

Many don’t know their own personal net worth, or even worse, how much they spend and where their money has even gone year after year. This is crazy, people!

Here are a few ways businesses run that will help you to optimize your own personal finances.


Any successful business sets goals for their future revenue and profit levels. So why shouldn’t you? Sure, if you’re an employee working for someone else, you may not be able to expect a huge jump in revenue from year to year. But, running a “profit” is still largely in your control if you keep your expenses low and don’t succumb to lifestyle inflation.

Your goals should formally be written down with an action plan and a timeline. The handout for this class has a large list of example of financial goals for the short, intermediate and long-term.

Creating an annual budget at the beginning of the year is a great way to quantify your annual goals for income and expenses. Tracking your expenses each month will help ensure you are progressing towards those goals.

Like a business does, find your true purpose and constantly be working toward the end result that you want to achieve.


When it comes to personal finance, I believe that time’s not money, it’s life. However, there are certainly ways that time is indeed money, especially for businesses that have significant labor expenses.

Creating efficient processes ensures that time is spent doing activities that are most valuable. The Pareto principle says that 20% of the inputs are generally responsible for 80% of results. Figure out what that 20% is and focus your time on those things that are making the biggest difference in your personal finances. For most, it’s probably creating a profitable side hustle or finding ways to reduce major expenses in your budget such as housing and transportation. It’s likely not couponing or shopping at 5 different grocery stores on the same day to get the lowest price.

Other ways to be more efficient in your time include implementing automation to pay bills, save and invest. Setting aside a time each week to focus on money will also ensure that the important tasks get done regularly.


I can’t even imagine a business that organizes their paperwork like a typical person. Tossing paperwork in piles and drawers is not conducive to anyone that is maximizing their personal finances or their business.

Lost receipts and misplaced bills have a monetary cost, as well as a substantial time cost. It’s essential to your bottom line to have an organized system to keep track of financial information.

I highly suggest setting up a digital system and backing up your information to the cloud (I personally use Dropbox and Evernote). While I used to occasionally lose and important document and end up searching for hours, it’s now as easy as typing in search keywords on my computer files. This makes an especially big difference when it comes to preparing my taxes!


You may not be conducting studies about your competitors when it comes to personal finances (we’re NOT keeping up the Joneses here!). However, you should be benchmarking against your personal goals and tracking your net worth and spending.

The key here is not to become complacent about money and just assume that because you’re doing better than most people when it comes to retirement savings, that you’ll be okay and be able to buy that brand new car too. You need a financial plan in place to assure that you are on track beyond just retirement as well. You can set up a DIY financial plan that will cover everything from your basic budget to insurance coverage to estate planning and more.

A financial plan is continually changing. It needs regular attention to analyze whether situations have changed. Keep analyzing your current situation and be adaptable.


Successful businesses put a lot of their profit back into growing their company. The focus on future growth outweighs the desire to have more cash right now. Yet, so many individuals live paycheck-to-paycheck without paying themselves first through saving for the future.

You should be investing in your career and your ability to generate a higher income. Then, you should be doing something with that higher income that will help your future (hint: invest it!).

Training is also essential. Today’s technology means that you can learn nearly anything (and often even take classes provided by top notch colleges) for free. There is plenty of high-quality financial knowledge out there. Really, there is no reason not to educate yourself. For those that aren’t financially minded, a fee-only financial planner is absolutely worth the investment.

Investing in yourself and in your future will ensure that you still have money to manage, even if you can’t control your outside circumstances and the economy.


Optimizing your life and finances is imperative. Certainly, there’s a lot more emotion when it comes to your personal finances as opposed to running a business.

However, it’s just as essential for individuals to have a firm grasp on their own personal finances. This is equally true whether one has a high or low income. By taking a step back and looking at your money from the perspective of running a business, you’ll find a few ways that you can optimize your own personal finances.

In what ways do you treat your personal finances like a business?


2 Responses

  1. I love this!

    I find myself talking on this topic from the other angle quite frequently too. I mentor some entrepreneurs and they don’t realize just how tightly integrated their personal and business finances are. Even a business with millions in revenue has some strong ties into the majority owners/shareholders personal situation. It’s good to be aware – and run *both* personal and business finances intelligently.

    1. I think it just takes a little bit more awareness and a shift in mindset for people to see that managing money is super important. For entrepreneurs even more so, since they have more control over it.



I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.


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