A simple internet search about how to save money will render a plethora of information about getting out of debt, reducing your living costs, and supposedly “little-known” ways that ones have paid off credit cards or student loans. In theory, all of these make sense, but they are at best spins on basic finance strategies that have been around for decades.
There are, however, more significant ways to get control of your finances. It requires an understanding of the financial concepts of expenses and cash flow.
Cash Flow & Expense Tracking
Although the idea of cash flow is simple, the majority of people do not keep up with their cash flow actively. Notably, the concept of spending less than you what you bring in is well known. However, this is entirely different from earning income and paying bills. Cash flow requires you to gain an understanding of where your money is generated and how it is expended. Those who get long-term insights into this can plan accordingly and utilize their money wisely.
Try This: Use a spreadsheet, a finance tracking app, or accounting software to track your cash flow. Doing so weekly and monthly is a great start. As you get the hang of it, make 3 and 6-month projections and stick to your goals. If you need assistance, get aid from an accountant.
Be Proactive About Your Finances
Everyone’s finances are different, so why should you simply take someone else’s strategy. One step that we advise all of clients is to create a tax strategy. Read up on finances or find a trusted resource who can look into your situation and supply you with specific options. Your finances are a life-long responsibility that will not fix itself. Avoid “gurus” who don’t have references or individuals who may have good intentions but who are not licensed in finance. Doing so is especially the case if you are planning on building an investment portfolio.