How to Turn a Negative Cash Flow Positive
1. Write it down! - Usually when you lose control of your finances
, part of the problem is that you do not know where your money is going.You have accumulated a mountain of bills, combined with your undisciplined spending habits, and it causes a situation where your money is spent before you even get it.
The most important thing you can do at this stage is stop spending and write down ALL of your expenses.
Separate your expenses into two categories: fixed and variable
Fixed expenses are expenses that remain the same every month like your car payment.
Write down the dollar amount of each fixed expense and round up to the nearest dollar.
Variable expenses change every month so you want to set a limit on how much you will allow yourself to spend on things such as clothing, personal care, kids, etc...
This is called budgeting, and although you might not like that word you need to do it if you want to regain control of your finances.
2. Compare your expenses to your goals. Most people can not do this because they either do not have any goals or are not working aggressively towards their goals.
You probably have heard the part about budgeting before but you probably have never heard this next sentence.
If your current expenses do not fit into your goals, then don't pay them.
Your cash flow is your biggest asset that will help you reach all of your financial goals. If you have a big expense that is eating up all of your cash flow, it is important to analyze why you even have this expense.
There are laws in place, called bankruptcy laws, that allow you to eliminate the debt that you owe. Many wealthy people have taken advantage of these laws, but the average poor or middle class person without any goals is afraid of bankruptcy.
3. Fix the problem. Change the thing that put you in your financial situation in the first place. The problem is not money. The problem is your habit(s) of dealing with money.
For most people this habit is the uncontrolled, undisciplined, unplanned spending of every dime that comes through their fingers.
For others it is the habit of being too lazy to educate themselves about money and always depending on someone else to do everything for them.
One last word. Ask yourself "Who is the most important person in your life?" The answer should be you since it is your life.
Those selfless, caring people will answer "No, no, my kids are more important than me." Well if you do not get yourself together first, then your kids will not have the best life.
Even though we might say that we are the most important person in our lives our actions speak louder than our words.
If you live in a capitalistic society, where you spend most of your money is where most of your value lies.
If you are not saving any money on a regular basis by paying yourself a percentage of all of your income, then by your actions you are calling yourself a worthless person.
Think about it.
How to Turn a Negative Cash Flow Positive
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