Thinking of yourself as a business could be a strange concept.  Though it might seem odd, it is a good exercise for anyone that wishes to gain a different perspective and better understanding of their financial situation.

Going through this process will force you to make a monthly budget, if you don’t have one already.  It will also make you look at your income and, probably more importantly, your expenses.  As you look at your expenses, think about what’s necessary and what’s not necessary.  Ask yourself, “Is this something that’s required to keep the business (your own self) running?”  Food, mortgage/rent, electricity, phone and (If you’re doing productive activities online) Internet.  What are the expenses that are unnecessary?  The list for that which is not needed can be very long and I’m sure you can identify a good number of goods and services, if you can be honest with yourself.

The next step is to look at the items that are unnecessary.  What can you do to optimize your operation?  How can you improve business performance?  One way is by cutting that which is unnecessary and thus a waste.  Being realistic, you are never going to eliminate ever unnecessary item.  For example, you will probably want some form of entertainment in your life.

It’s fine to realize what you will likely never fully eliminate ‘waste’ from your spending habits.  You can however budget in order to handle your unnecessary spending in a controlled manner.  Identify the waste, cut away what waste you can immediately, plan for future waste reduction and begin to budget money to be allocated on non-essential activities (waste).  You may not be willing to forgo movies, dining out, and other frills.  In such instances, have a system in place that can at least control for them.

After you have completed the evaluation and placed controls in place for handling your unnecessary monthly spending, look at what you’re doing with the money you are retaining.  Your net income minus your expenses gives you a number for revenue (or what you would may call profit).  What are you doing with your monthly profit?

This is where the tagline, “You work hard for your money, your money should work hard for you” comes into play.

As a company, it’s very important for investors to know that the company is putting its retained earnings to work.  If the earnings are sitting idle, this is a sign of bad management.  What are you doing with the money you retain each month?  Is it being put to work or is it sitting idle?  Most people get caught up in controlling expenses and don’t think too much about the money they are able to save monthly.

The money you save on a monthly basis is very important to you financial well being.  If you are putting the money to work, then you are going to have a greater inclination to continue saving because you’ve put a purpose behind the saving.  Therefore, define what the money you are saving is to be used for.  Be specific.

As you work through this entire process, the income you bring in each will be on your mind.  Once you’re done calculating where you are now in terms of expenses and putting your savings to work, put some additional thought into your current income level.  Is it where you want it to be?  If not, why is it not?  I do not mean, why don’t you have X job that would pay Y dollars.  I am asking, “Why do you need that additional money each month?”  What would you do if you were being paid Y dollars more each month?

If you want your monthly income to rise, is it because you want to do more frivolous activities and buy more frivolous things?  Or is it because you have a meaningful plan to achieve certain goals that will be possible sooner with more income?  Do not let more income blind you and bring you back to your past habits.

Lastly, where you are in life is going to obviously have some bearing in terms of the degree in which you exercise control on the excesses you are indulging in.  The main point is that if you want to really ‘invest in yourself’, then you need to be serious in the way you handle your expenses, savings and income.  When you think more like a businesses would with your personal finances, you have a greater chance to open your eyes and identify areas where you are wasting funds, how you can better use the resources you have and what goals you have that you may have not fully thought through.