Whether you’re running a Fortune 50 corporation, or just trying to keep your household expenses from exceeding your salary, the same basic financial concepts apply. Invest in mastering fundamentals like these:
Opportunity cost. What do you need to give up in order to get something you want? It’s a question of money, but also time and value: Pursuing an advanced degree may take years—are you willing to put in that amount of time? Will a sports car give you enough enjoyment to offset going into debt for it?
Sunken costs. This is money you can’t get back—a non-refundable airline ticket, for example. Keep sunken costs in perspective. It’s easy to start thinking “Well, I’ve already spent $100, what’s another $25?” You’ve got to be willing to walk away sometimes.
Time value of money. According to this principle, a dollar you receive today is worth more than a dollar you’ll get tomorrow. You’ll have opportunity to invest that dollar immediately and begin earning more revenue from it (and also avoid losing value because of inflation).