Sunday, September 16, 2012

How to manage money better

To become a rich man or welath man, you have to able to manage your money better. Some people who has high salary cannot manage the money well. They buy anything and they do not think about their future. In the mid of month, the salary has gone. They are forced owe money to other people to fulfill the daily necessity. Day by day, the debt increases and they bankrupt. Here are the some stesp to manage your money better:

1. Create a cash flow budget
The budget depict what cash flow come from and what cash flow goes for. This budget help you to fulfill what you need. The budget keeps your cash inflow equals with cash outflow. The cash inflow should be enough for paying what we needs. If the cash inclow is not enough, we can decrease the cash outflow or increase the cash inflow. 
What you plan to buy next month? You can write in spending post. Dou you have money enough to buy the stuff? If your income is high, you can buy it. If, on the other hand, your income is small, you can cicil for couple month. For example, you want buy a $ 500 bicyle for kids but you just have $ 100 a month for toy kids. Set a side $100 for five month. You can buy your bicycle to your kids after five month.

2. Save the money before spending
Some people cannot save their money whether they have high salary. They have wrong method for saving, for example: They save money at the end of the month or they save after spending. They never allocate to save their money. 
You should allocate at least 10% for saving. If you have more money, you can save higher than 10%.

3. Buy what you need not you want
Some people always materialize their want without considering the money. They want buy X Box, Plasma TV, Games, and other whereas they have not enough money. Off course, human need entertanint but they have to consider their finance.

4. Settle the debt soon
After get paycheck, you have to pay the debt soon. If you late to pay it, the creditor may charge you fine. Your debt will increase and you will be difficult to settle it.
Before borrow the debt, you need to consider the pros and cons. For what you borrow the money?

5. Emergency Fund
Emergency fund is very important when you need money immediately. With emergency fund, you do not have to borrow money from brother, sister, parent, and neighbor. Allocate six or more times your daily necessity for emergency fund.

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