In money management, low income should not be considered as the root of your financial troubles. It’s about focusing your cost-cutting and budgeting skills on assets your household and your family members can do without, because your income simply cannot afford them.
You don't need to be a financial wizard to control your personal finances. Just a little common sense and a few money management tips to enable you to live within your means as you increase your wealth.
However, before you can sensibly apply money management tips, it's helpful to be familiar with a few money management terms.
Learning effective money management not only enables you to live comfortably within your means, but also helps you to increase your wealth. Use these two money management tips to begin your journey of controlling your money!
However although all of our possessions are parts of our wealth that we can turn into cash, usually they are the types of our money that we want to protect from creditors. For instance, you probably don't want to sell your car or cash in a valuable coin collection to pay a bill. Yet, the ability to convert property to cash is a good concept to remember in identifying and effectively managing your money.
Some assets like vehicles and appliances depreciate (decrease in value) over time. Yet, while they don't increase spending power, you can turn them into cash.
Long-term assets like real estate holdings, investments, and personal property such as collections, artworks, and antiques appreciate (increase in value) over time and actually enable us to save money and increase our wealth.
2. Set up a realistic budget and stick to it.
|Monthly Gross Earnings|
|Subtract 28% for average withholdings|
|Monthly net income|
|Student Loans||Other Credit|
|Transportation Expenses||Child Care|
|Monthly Net Income||Monthly Discretionary Income|
|Subtract Monthly Expenses||Annual Discretionary Income|