Understand Cashflow Management
- Understand Cashflow Management
Cashflow or cash flow is the flow of money that flows from the us to earn money, save it, expand it, and remove it by regularly, wisdom and discipline.
Knowledge will be required to finance cashflow known our families will not be garbled breaking loose and tracked. There is an interesting phrase “no matter your finances are an important deficit, You know where loss of investment money.” Let’s discuss cashflow diagram as follows:
- Income
Earnings (income) is an activity that aims to put money/property. Usually the income can be obtained from the two activities, namely Salaries and investment.
The salary earned from our status as an employee/employer/professional/consultant. In a family’s salary was to be gained by husband and wife are working.
The results obtained from the Investment activity in developing our money/property in various ways. There are a few ways I can invest the deposits, Shares, Property, business results, mutual funds, bonds, etc.
Well, all our income is usually stored in the form of cash or bank/ATM.
- Expenditure
Spending means all activities that result in our money is reduced. From the diagram we can see an awful lot of need for spending on our families. So when it is not regulated properly then would make family finances to be chaotic and chronic if it could be headed to the brink of bankruptcy.
In General a family have some expenses such as household spending, Debt Repayments, insurance premiums, the Housekeeper, the child Needs, transportation, Taxes, Tithes/Entertainment/Recreation, social activities, Fashion, and so on.
When we look at all this time, the error is often done by most families are only deals with income derived from salaries that is constantly being drained to cover its expenditure. angat is a bit of our families who are starting to investment activities as a source of income for his family. But if we are diligently performing investment, then the result of the investment actually can cover all sorts of our spending is, in fact can be much greater than the salary we receive during this time.
The explanation above is an ideal conditions which are to be achieved by each family. When your family is currently still rely entirely on the flow of income from salaries every month, then it’s time for a little by little the money You set aside so that it could make a new revenue stream that comes from Investments.
MYTHS AND FACTS ABOUT THE MONEY
Often we believe something that is not necessarily true in reality then, this is what happens to the money. There are some myths or assumptions about the money that is actually wrong but this is our hereditary Jainism truth. The myth that anything, which makes us sometimes blame the money, remember money is not wrong but the wrong Chaitanya. Here are seven myths about money with the facts.
1. Prestigious with credit card
Myth: Credit cards are the stuff that has always saved us from a lack of money and also can add to our prestige in front of friends, especially if we Hold Gold credit card!
Fact: For credit card issuer, you are an easy target to become a customer Those who would give many benefits, you must take the credit card are: credit card interest rate is very high. You need to remember, credit cards instead of more money, let alone rescue, credit cards are a temporary means of payment must be repaid before the maturity date arrives. Many credit card = lots of debt, why not just replaced with a debit card? More prestigious course. And we know the money in the bank. In terms of our money also would reduce the minimum we use instead!
2. Salary is always less
Myth: No amount of money we have, really never seems to get enough Yeah? If wages rise, spending would also go up because of the desire can be fulfilled in line to the addition of revenue.
Fact: Regardless of income that you receive will be sufficient if you use them correctly and consistently. That’s why financial planning is needed through a monthly budget. You can start by noting the incoming money as your monthly income, then write down your needs each month, try to always live up to the standards of your income. Once you get out of line, then you will transmissible, the important thing is not earning as much as possible, but how to make money on an ongoing basis. Better to have enough money, but sustainable than having large amounts of money directly but gone in a flash.
3. Fun on first
Myth: Not yet time for us to think about old age, yet it still happens in a matter of decades ahead again too! While still young and strong to work, we must make the most revenue that we get to have fun. Why should we even bother thinking about the future from now.? Later there is also a husband who is ready to help bear the cost of us? Or heritage!
Fact: The earlier you deposit, the more money collected in the future. Not shall mean stingy to yourself, but at least you have to set aside a portion of income that you received for savings. This will really feel the benefits if you need an emergency fund is very urgent. If you do not have savings, where we have to ask? Parents? Looks like it has not entered our agenda, right?
4. Money can buy everything
Myth: If we have a lot of money, then we will be happy, because we can buy all our desires.
Fact: It is nice if we could satisfy all our desires with the money we have. But remember, not all things in life money can buy. Affection you receive from family, partner or friend would not be replaced with money. Happiness in your life will never be able to be replaced with money, regardless of how many. Therefore, do not make money as the only goal of your life.
5. No time to manage money
Myth: The density of our daily activities to organize the workers, spouse, friend or family could be the reason we did not have time to create and manage a family financial plan.
Fact: Creating a budget will not spend a day, really, you just simply set aside a few hours at the end of the week to begin planning your personal finances. This will not make you lose time for fun or making out with your partner, you can even invite a couple to start talking about it. Do rotundity again, before you regret later.
6. Higher Education = Rich
Myth: If you want to be rich, then continue as high school, the more we spend money on schools, the greater the revenue that we would handful future.
Fact: This myth is not 100% wrong, but also not 100% correct. Clearly, higher education does not guarantee riches that we have later. There are many success stories of those who did not get an education through college and there are many people with higher education, even to school out of the country life is not much different from our local graduates only. What’s important is how we utilize the talents that we have to work or choose an appropriate job.
7. Fortune existing governing
Myth: As hard as we tried to find any money, if not fortune, what can we do? Come take it, everything is set up.
Fact: This is a matter of mindset, if we believe can get a better job with a salary that is more promising, our minds will continue to point to it, so we can get what we expect as the persistence of our efforts. Who else is going to change our destiny but ourselves.?
STEPS TO FORM EMERGENCY FUND
STEPS TO FORM EMERGENCY FUND
Certainly we’ve listened to the discussion of family financial management series while ago on the topic: “Why Women should Saving?” The discussion which then gives five reasons why women have to save. And at the end of the discussion we have extended that further discussion is about the steps in forming the Emergency Fund, Why? Because if we only know the reason for saving, not complete, for that we need to also discuss concrete measures how to form an emergency fund to be successful in managing the household finances, and we believe that hope for loyal readers of this column. Here we provide 10 steps that you can apply to start saving
1. Calculate all your expenses each month
2. Create an emergency savings fund in the amount of the cost you 3-6 times per month, or the funds for the needs of your family every month.
3. Set aside and little by little from the monthly income, adjust the size of your ability, but at least 10% of your income can be allocated directly to a savings account. Create a married, certainly not for the bigger your salary is relatively intact.
4. Save your money in savings deposits, time deposits, or other investments.
5. Treat this as an emergency funding bill that you must pay each month to be more motivated, so it is advisable if you choose term savings are usually in debit from your savings account automatically every month.
6. Reduce spending that is felt not too urgent, the goal that the emergency fund you quickly collected.
7. Save a dime which is usually derived from the return transaction, because collected could be saving that amount is not small.
8. Restrict access to the emergency fund account so that you are not tempted to use them, Yes, you do have to open a separate account if peritoneal ATM.
9. Do not spend bonuses, holiday allowances or other unexpected income, use as needed and immediately enter into an emergency fund account.
10. Evaluate the amount of expenditure and revenue annually and make revisions to the budget emergency fund in accordance with the current environment. Income rises, the allocation to save also rises, right?
I am sure you will be moved to immediately save more intensively again and feel the sensation when you see the savings account balance continues to have risen. Well, if the emergency fund has been collected, immediately to be invested, you can deposit your money, or to buy precious metals, property, and so forth, of course, with hopes of getting a higher interest rate.
Wait what? do it now, make planning for your future, the earlier you start planning your future, the more easily you achieve and enjoy financial bright in the old days. Many people regret that only when parents bother their children due to “negligence” of his young Keewatin to spend money, you certainly do not want that happening to you, right? Remember time is money, the cash value will now be different from the value of cash tomorrow! That is the value today would be smaller, but if we start saving money wisely now smaller then the present value will be greater later in the day tomorrow. This is the legal principle of saving the economy. For continuation of discussion, we will discuss the following: How to Select Investment Products! that is appropriate for the money you’ve tubes.