Knowing how to manage your money is the key to being successful. When you have money in the bank, you have the freedom to do what you want to do. If you don’t have money in the bank, you have to start immediately to change that, and you might have to lower your standard of living until you get there.

• Budget. It’s understandable that when you’re starting out in life, or you have special circumstances (like illness) you will be in debt. You might have a mortgage or a car payment, and depending on your own situation, you’ll have other debt. But you have to have a budget—you should never spend more money than you’re making.
• Business versus personal. Make sure you keep a clear distinction, and don’t mix your personal finances with your company finances. Learn to manage your personal finances first. If you’re not managing your personal finances, how are you going to manage your business finances?
• Credit card debt. If you can’t pay off your credit card each month, it means you can’t afford what you just bought.
• Debt-free. Wherever you are in your life, within 15 years you should be debt-free. You must make it a goal. Pick a date, pick a time, and write it down here ________________________________.
• Lower your standard of living. You can’t afford your life if what you’re paying out is more than what you’re bringing in.
• Personal checking. Your personal checking account should have an amount equivalent to what your monthly payments would be going out.
• Personal savings. You need to start by having a year’s worth of income in savings. What if a tragedy happens? What happens if suddenly your business goes down? What happens if you’re in a job and the business closes? You can’t be living on the razor’s edge.
• Retirement. Save for this after your checking and savings are in line.
  

Your personal financial freedom should be your first goal on your step to financial leadership. When you understand the process, it will become the model for your professional life. There are many books and programs that can get you started on the right track, and instruct you on how to become financially free. This process of training yourself for financial success will carry over to all the other areas of your life.

You have to manage your money to manage your life. In any relationship, business or personal, if you have different value systems regarding money management, different views on spending, credit cards and debt, then it will be almost impossible to stay long-term in that relationship. If you’re going in different directions, one person will be going into debt, and they’re going to want you to pull them out. One day the pressure is going to be so great, it’s just going to be over. If somebody can’t manage their money, it’s probably also true that they can’t manage other things in their life—priorities, friendships, or relationships. I worked hard, I planned, I took care of my family, I watched my health, I educated myself, I stayed focused, and I managed my money. It took a long, long, long time, but I did it.
—Mike Holt