Saturday, November 25, 2006

10 Tips to Manage That Cash Flow

Managing your money can be a difficult job. We are raised in a society where Television, billboards, and your Local Amway or Tupperware neighbor are trying to tell you to BUY BUY BUY. Although buying is always fun and often time a necessity, it can lay a serious dent in that bank account of yours. Here are 10 tips that will help you manage your money and make it grow.

1. Take the time to examine how you already interact with your money (are you careful, carefree, or just a big baller?).

2. Track where you are at the moment. You can do this preferably with Microsoft Money. If you don't have Microsoft Money or you don't have the money to buy it you can use an excel sheet or just a plain paper journal. The main thing that you want to keep track of is your NET WORTH. This is done by calculating all of the money that you have going out, all of the money that you have coming in, how much you currently owe people or people currently owe you, and how much you have currently in all of your savings, checking, 401k, stocks etc.

3. Since you have a good understanding of where you are currently it is time to plan for the future. Set financial goals for you to reach. Examples would be save x amount for college fund or save x amount per month to buy that plasma you have always wanted.

4. Make those hard choices correctly. When considering if you should buy something take into consideration the want vs. need factor. Are you buying this item because you need it, or because you want it?

5. Never be late on any of your bills. Your credit is your life and if you lower that credit by only a couple points you're looking at a couple hundred dollars a month difference on that new mortgage or 50 dollars difference a month on that new car you want to buy.

6. Use your log Always, as much as you think you're a brainiac you can't remember all those transactions and debts in your head.

7. Don't be too cheap that one day you go all out and splurge. Find yourself a comfortable middle ground between being stingy and being careless.

8. Just say NO, to debts that is. Have as little debts as possible, the only debt you should have is a mortgage that is comfortable (don't buy your dream house that will bankrupt you and will get foreclosed on when it is time for it to adjust, use this awesome tool from CNN to figure out how much house you can afford).

9. Plan your retirement and do it correctly. It is easy to get caught up in the now and think that you can live off pennies later on. Make sure you give yourself some room to breathe in the later years

10. Shop around! When you buy something take the time to shop around. This includes buying your house. Just make sure you are in constant guard of your credit. You should get a good idea after 2-3 places that you've gone too. Anything more than that and your credit will take a big hit. Remember, the more you get your credit pulled, the lower it will go!
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