If you are the CEO of your very own company or have recently been promoted to that powerful role as an employee, then it is a very exciting position in which to be. Naturally, one of the main benefits that this will bring you is the increase in annual salary.
This extra money going into your bank account each month is very handy and will allow you greater financial freedom in how you use it.
Though it is highly tempting to spend freely now that you have more financial power, this would be a huge mistake. As the CEO of a successful company, it can be easy to automatically believe that the money coming in will carry on forever and nothing will ever go wrong. Unfortunately, this is not the case, as has been seen in many examples over the years, such as Barings Bank. Sometimes, events conspire to shut down very successful businesses almost overnight.
With this in mind, it is very important to understand that things can go very wrong, very quickly. It is better to be safe than sorry and manage your finances properly on your CEO’s salary.
Start an emergency fund
One of the best tips in this area that you can follow is to open a savings account to start putting money aside in case the worst does happen. Take the time to shop around for the best savings account options and pick the savings account that suits your needs. There are many to choose from, including free savings accounts and high-yield savings accounts – all will have their individual features and benefits. Once you have opened the best one for you and started depositing money into it, you can begin building up a substantial emergency fund for when you need it.
Start paying off high-interest debts
A great way to use your CEO-level salary to manage your finances is by paying off any high-interest loans that you have. Of course, it is wise to use your new-found wealth to pay off all your loans or debts, but this may not be possible in one go. By paying the high-interest loans off first, you are automatically easing your monthly financial burden and easing the pressure on your finances overall. Once these are paid off, you can move on to freeing yourself of other debt that you may have. In the quest for true financial freedom, this is an essential point.
Automate your monthly finances
As we have already noted, opening up a savings account and paying off your debts are two of the best ways to manage your finances on a CEO’s salary. The problem that some people find is actually putting money into their accounts or physically paying their creditors! If this applies to you, then you should think about automating your finances.
This can be done easily by setting up automatic payments with your bank for set amounts to go from your standard bank account to your savings account each month, when you get paid. You can also do the same to pay a certain amount of money off your debts every month. By doing this, you are making it easy to manage your finances in a way that means you won’t miss the money that is being saved.
Treat yourself wisely
Becoming a CEO is a very respectable achievement and one that you will naturally want to celebrate and from which you will want to reap the rewards. While a lot of managing your finances in this area revolves around saving, it is important to talk about spending any of your money wisely. Treating yourself to a nice watch or your family to a holiday is fine – just be sensible about it! Buying that rare Hublot Black Caviar or making it a year-long, round-the-world trip is not wise when you really consider it!
For some people, if they do not allow themselves small treats, they end up splurging on bigger treats as a result, which is a mistake.
A CEO’s salary gives you the opportunity for financial freedom
While on the face of it, a CEO’s salary can seem to give you real spending power, you should ideally be looking at your new-found position from a different perspective. The real benefit from attaining this level of salary is the financial freedom and protection that it can bring, if used correctly. Using the extra money that you have to save wisely and pay off debt is actually the real secret in how to manage your money as a CEO. This will in turn allow you to enjoy life more, certainly in retirement, when you have a healthy capital amount on which to rely and treat your family.
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