How I apply some financial ideas to everyday life

Hi my dear readers! Thank you for stopping by!

Here is the link to the video for today’s article: Three financial ideas that I apply to everyday life.

The weather is so cold in Chicago. We only had one nice day yesterday. I can’t wait for summer. But this is not what I was going to talk about today. Today I wan to share with you some of the ideas that came to my mind because of my work. My job is Senior Financial Analyst. I always loved finance. And you know what else do I love? I love metaphors! So I decided to create some type of metaphor from financial ideas to help myself to be more organized with my life. You can apply some of financial principles to everyday life.

Here are my three ideas:

1. Think of life as income statement. The revenue line is our pleasures. Companies like to grow, to increase revenue. And humans want more and more pleasures in life. And our big goal is to generate more pleasures the same way as in finance we want to generate higher revenue. But we also have different types of expenses: costs of goods sold, other costs of sales, administrative costs, research and development, etc. And in life we have price that we have to pay to get pleasures. It can be money itself, can be your time, your health, relationships. So you can list all type of costs, something that you need to spend in order to gain pleasures, and the variance between revenue and costs, or pleasures and costs, will be your income, your profitability, or in terms of life, it is your well-being. The formula is pretty simple ☺️

P-C=WB

Where P is pleasure, C is cost, and WB is well-being.

2. The second idea is about targets. In finance we have Long Range Plan (LRP), Annual Plan and Forecasts. And we constantly check where we are compare to the targets. I think that this principle might be useful for your personal goals. You can come up with ideas for the next 5 years, for the next year and then check where you are compare to where you wanted to be. Very simple and kind of fun! This can help you to stay organized and remember about your goals. Select the days where you make you checks, it doesn’t have to be often, but try to make it almost like a mini self-report. This way you will always know what is going on and you will be moving forward and will be able to make some adjustments based on circumstances.

3. Risks and Opportunities. In financial planning we always need to take into account risks that we might have in future. It can help to avoid some of them and more importantly, it can help to prepare the alternative. And being prepared to difficulties is very important in finance and in life. So think of risks you might have when you make certain decisions. But please never forget about opportunities! It is so important! We often imagine some negative events and we get stressed and we forget that life always helps us, it always provides to us what we need. And in order to stay energized and productive, it is useful to think of multiple new opportunities that you can have.

These are my three simple ideas.

I hope you found them useful!

Be Strong And Love Yourself!

From Dasha With Love!

Love Wins!