FINANCE: Money, Cashflow and Assets

This is a close look at your fun and recreation activities. Your circle of friends and associates, or volunteer community service.

Let’s be very clear and simple; there are only three ways to improve your financial position.

  1. Increase your income
  2. Decrease your expenses
  3. Change how you make or spend money

A colleague argued a forth method could be a combination of all three? Let’s just keep it simple.

Ok so there is no magic solution that fits all situations, however if you recognise this reality then you have already embraced a healthier attitude. Get excited! Be encouraged there are so many opportunities available to improve a financial situation if you are open minded to consider them.

A refreshingly simple method of improving your financial position is in these three steps:

Step 1  Know your financial circumstances. How much you are spending and where. Confirm your income and your current ‘real’ situation as at today’s date.

Step 2  What is your financial goal? How much additional monthly income would make a significant improvement to your lifestyle? What is that figure?

Step 3   Which actions are more likely to produce fast and proven results for you?

Here are a few suggestions:

  • Analyse your spending, Are you aware of how you spent your money last month? With so many payment methods available these days it is easy to lose track. Your starting point is to collate the figures and then pass judgement on yourself as to whether the purchases were needs, wants or impulse buys.
  • Better deals, I know sometimes it is plain laziness, but there are always better deals to be had if you are alert. Large companies understand the lifetime value of an existing customer and work hard at retaining them. Don’t be afraid to ask for a competitive quote. Insurance, mortgage, loan accounts, or store discounts offer non-advertised discounts. Imaging how much richer you would be if you had saved 5% discount on all the money you have spent in your lifetime so far.
  • Automate,Simplify your life by setting up automatic payment schedules. Some firms even offer special deals if you choose this option. This will save you time and will ensure you never incur late fees.
  • Multiple sources of income, Identify your passion or hobby and research how others are earning money from that. It may be as small as referral fees or affiliate marketing. It does not matter how small the extra income, it is all about the principle that developing multiple and sustainable sources of income makes you bullet-proof.
  • Shake it up, Do something different! Choose to spend in a different way. Pay cash for everything for a month to reunite with the cash experience. Get a part-time job in a field you always wanted. Buy bulk and save. It does not matter what you do so long as you try different things. You may be pleasantly surprised with the outcome.
  • Monthly budget, As simple as it sounds do a monthly budget. The key is accuracy and accountability. How much income are you expecting and how do you plan to spend that? No more excuses about not knowing where your money goes! This simple task has an ongoing and accumulative benefit toward achieving your financial goals.
  • Negotiate an increase, Whether you are an employee wishfully wanting a pay increase or a business person desperate to increase prices, the outcome may be similar. The first reality is if you do nothing you are certain of a similar result. An employee has a plethora of information available on how to ask for a pay rise, along with encouraging results statistics. Similarly increasing prices of goods and services has some mathematical outcome advantages.