Business Action Group

The following is a basic method consists of four steps that will help us improve our personal finances or, in other words, will help us improve our financial situation:

1. Meet our financial situation
The first thing to do is know our financial position to do so we can make a personal assessment, point out where our assets (bank accounts, investments, property, etc.), Our liabilities and debts (credit cards, personal loans, mortgage, etc.), and our assets (assets minus liabilities).

And we can also develop a personal income statement, point out where our earnings (wages, interest, sales, etc.), Our expenses (rent, food, services, etc..), And profit or loss (revenues minus expenses) obtained in a period of time (one month, six months, one year, etc.)..

2. Establish financial goals
Once we balance our personal and our personal income statement, we turn to analyze and, based on that analysis, set our financial goals.

For example, in our analysis could determine that we need to increase our revenue sources, reduce our costs, reduce our debt, to acquire more investment, etc..

As our goals could be, for example, increase our revenues 50% for next year, reduce our costs by about 30% for the next month, to cancel our debts at 60% before year’s end, purchase a property as an investment before the end of the year, etc.

We must ensure that our targets are specific (for example, have an income of 5000 per month for the next year) so that they are clear and measurable but it is also possible to establish general objectives (eg safety or achieve financial freedom.)

3. Develop action plan
The next step is to develop an action plan, which states the strategies or actions that we take to achieve our financial goals.

For example, to increase our revenues could take the decision to seek an increase in soil, seek new employment, increase sales in our business, find new sources of income, etc.

To reduce our expenses could make the decision to cancel subscriptions to journals that do not usually read, stop buying coffee or cigarettes, eating at home instead of eating out, etc.

To pay our debts could decide to cut our credit cards, consolidate all our debts, to allocate a certain percentage of our revenues for the cancellation of our debts, etc.

4. Develop and follow personal budget
Once developed our action plan, we began to develop our personal budget, which will help us to make effective our action plan.

Noted in our personal budget money income (wages, business, investment, etc..) Cash expenditures (food, education, services, etc..), And the balance (revenue minus expenses) that we expect for the coming months year, based on our financial objectives and our plan of action.

And finally, once developed our personal budget, we have to adjust to it, knowing that the more discipline we have to follow, the better chance we have to improve our personal finances.