Strategies To Effective Money Management
Topics: Adam Khoo, Financial Freedom, Financial Planning, Personal Finance, Wealth Building
Before you can ever reduce your expenses and increase your savings, you must first know where your money is going to. Many people share the same experience of having no idea where their $5,000 salary went. ‘How did I spend so much money?’ ‘I thought that I should have $1,000 left at the end of the month, but it seems to have all disappeared!’
With a simple yet powerful system which I personally use together with specially designed Microsoft Excel templates like the ‘Monthly Personal Income Statements’ and ‘Daily Expense Sheets’, you just need to invest fifteen minutes a day to manage your money.
If you want to be wealthy, do not expect it to happen automatically. You must commit to spend time on your finances. Earlier on in this book, I talked about the millionaire’s daily hour. Millionaires spend an average of an hour a day on personal wealth management, while most people spend less than an hour a month, usually on paying bills.
So out of this one-hour a day, you’ve got to devote the first fifteen minutes to do these five Money Management Steps.
1) Always Ask for a Discount
If it is not a fixed price store, there is a 70% chance that you will get a discount if you just ask for it. If you get a 10% discount, it is equivalent to earning an immediate 10% return on your money. Over the long term, you will save a huge amount that will accelerate you even faster towards your targeted net worth.
2) Always Ask for a Receipt
Always get a receipt so that you can track every single expense at the end of the day and, if possible, claim it as a business expense and get a tax deduction.
3) At the End of the Day, Record all Expenses in your Daily Expense Sheet
You can do this manually in the sample ‘Daily Expense Sheet ‘at the end of the chapter or you can key it in electronically into a template.
I highly recommend you key it into an excel spreadsheet, so it can automatically add up the total each month.
4) Use a Credit Card Whenever You Can (but always pay the full outstanding sum every month)
Again, this will allow you a convenient way of having all your expenses recorded for you in the monthly statement.
5) At the End of the Month, Update Your Monthly Income Statement
At the end of every month, add up the total expenses from your daily expense sheet and update your monthly income statement. At the same time, update all your income for the month. Deduct your total expenses from your total income to get your monthly savings.
You must use a system to track where every single dollar goes. Only when you know where your money is going, can you take steps to channel it to your savings and investments.
Doing this month after month may seem tedious, but it is absolutely necessary if you want to build your wealth. Only when you develop the habit of managing your personal finances, can you manage the finances of your own business. So many people financially mismanage their businesses into bankruptcy because they mismanage their own finances. Don’t be one of them!
Adam Khoo is an entrepreneur, best-selling author and a self-made millionaire by the age of 26. Discover his million dollar secrets and claim your FREE bonus report ‘Get Out Of The Rat Race Now’ at www.SecretsOfSelf-MadeMillionaires.com
Previous Articles Highlighter:
Choosing The Right Mortgage Broker To Help You With Your Home Loan (1)
Some of these options are simple and easy, while others can be complex and difficult. The most common method of getting rid of these anxieties when buying a home is by simply educating yourself on how the process works.
Tax Benefits Of Student Loans (2)
As long as you have the loan and are legally required to pay interest on it, you may continue to claim the tax deduction. Once the loan is paid off or you are no longer required to pay interest, you cannot claim student loan interest deductions.
Understanding Disability Insurance (3)
It's just as important. No matter how careful you are about job safety or staying healthy, sometimes there is nothing you can do to prevent an accident or illness.
Choosing A Student Loan Lender (4)
Remember, the hardest part about taking out a student loan is repaying it. Forebearance and Deferment Options Forebearance and deferment options allow you to temporarily halt your student loan payments in the event you encounter some financial difficulties during the life of the loan.
Tampa Realtors: The Benefits Of Hiring A Professional (5)
Indeed, there are a number of significant benefits that can be realized through engaging a Realtor in the sale of your home.. A Comprehensive Approach to Marketing The first benefit that you can realize through the use of Tampa Realtors is the fact that these professionals can bring to you a comprehensive approach to the marketing of your home.
Student Loan Forgiveness Programs (6)
Keep in mind that this option is not available to every student loan borrower, but there are special situations in which all or part of a loan can be forgiven.
Young People 'Do Not Know How To Use Their Money' (7)
The pfeg director of policy added that going to university brings with it a number of stresses and strains on individuals when it comes to financial management, with experience of the so-called real world being picked up through being solely responsible for money for the first time.
An Overview Of Travel Insurance (8)
But again, you must ask your individual provider if they have this service. There is no need assuming you are covered when such a service is not in existence in your policy.
Loans Demand Remains 'Weak' (9)
Mark Dawson writes for Loan-Arrangers .co.uk where visitors can compare cheap loans online. Then apply for the best rate secured loans and bad credit loans available. Visit today www.loan-arrangers.co.uk
Older People 'Looking To Achieve Travel Dreams' (10)
Putting money aside and making it work for them means they are one step closer to realising their dreams, whether this be travel to exciting destinations or making a more permanent move abroad." In addition, the firm pointed to research revealing that the majority (57 per cent) of Britons owning property abroad are over the age of 55.
How A Home Equity Line Of Credit Can Fulfill Your Dreams (11)
One reason is that you have access to the money in equity, but you do not pay interest on it until you actually draw it out and use it. Initially, when you apply, you are given a credit limit that sets the amount of cash you can get.
Do I Need Flood Insurance? (12)
Water damages, such as happens when a water pipe breaks and flood the floor, are usually covered in a homeowner's policy. This type of damage is often listed in the policy.
What Everybody Must Understand About United States Government Grants (13)
You must learn through them before you make that application: 1. There is actually a mind-boggling amount kept aside by other federal organizations that give US government grants. The total expected sum comes to about $400 billion dollars.
Car Insurance How To Find The Right One (14)
It is the least expensive form of car insurance. If your vehicle is stolen or catches fire Third Party Only will not cover you. Third party Fire and Theft costs a little more but will cover you for these eventualities.
Is A Secured Loan Right For You? (15)
Although secured finance may be the best choice for you, there may be down sides to having a secure loan, and its always best to research alternative options as well.
How Does Debt Consolidation Help You (16)
If you face a bankruptcy, in such cases your debts are cancelled and your credit rating falls miserably. With a debt consolidation measure your debts can be reconstructed into a single monthly payment and can be worked out in such a manner that is favorable to your situation of bad credit.
How To Cover For The Cost Of Lasik Eye Surgery (17)
Now that's something really exciting. Credit Cards An alternative to the financing options is the credit card. See if it works out to your advantage by paying through your credit card.
Home Business Insurance (18)
So it is very important to make sure everything is insured. If you have employees, another thing to consider is insuring them as well. You never know when an accident might happen on your property and if it happens during your work day you might find your business in trouble.
Free Debt Consolidation Services (19)
They also force you to save by counseling you to cut down your credit card expenses. Find more Debt help info @ www.MY-DEBT-REDUCED-TODAY.INFO and debt reduction info @ www.MY-DEBT-REDUCED-TODAY.INFO online.
Credit Card Rewards Win Customers (20)
But credit cards are here to stay, and it is high time that we accepted this as fact. In fact, with credit card providers emerging every minute, it is just a question of time before credit cards become the preferred mode of payment.
Newer Articles Highlighter:
How To Invest In Stocks (1)
However a smart investor with deeper insight and skillful analysis of the stock prices can reap the benefit even in a volatile market condition. Sign up for our Free Stock Picks Newsletter to find out how our last stock pick, Netflix, could have helped you gain a whopping 31% in less than 2 months.
Advice On Getting Auto Loans (2)
Many people sometimes obtain loans so that they can purchase vehicles that they want to buy, and they do this quite often because of how often they purchase cars throughout their lifetime.
What's The Smartest Way To Lease A Car? (3)
Most people use this method to buy a car and end up making monthly payments on the car for the next several years. The third method that customers can use to buy a vehicle is through the use of a lease, which basically means that you rent out a car for a certain amount of time.
Overcoming Business Loan And Commercial Mortgage Finance Problems (4)
Commercial Real Estate Loan Rejections: (5) Business Plan Requirements - Reason Number Five for commercial mortgage loan and business loan disapprovals: A bank's loan officer determines that the business plan does not support the needed commercial loan.
Do You Know What A Mortgage Actually Is? (5)
This can be a risk for some people but can save you quite a bit of money if the property market is doing very well. Customers who have fears of dealing with the risks of the previous type can acquire a mortgage that has fixed interest rates.
If Your Car Is Totaled, And Your Insurance Won't Pay Your Loan, What Do You Do? (6)
In today's world where automobiles are abundant, car insurance has become required to have by law for everyone who owns and operates any type of vehicle. Auto insurance protects a client financially just in case some sort of mishap occurs or any other sort of damage that might occur to the vehicle.
Are You Allowed To Trade In A Car If You're Upside Down On The Loan? (7)
The next type of scenario is when you have obtained several auto loans and still have the desire to trade your car in to remove debt. This is a little more tricky to do because you have more debt that you need to pay off.
Is Non-Regulation Hampering A Property Market Recovery In Spain? (8)
It could be argued that even with regulation the US market is struggling to cope in the same way as the Spanish market. Whilst this is true, the underlying reasons are more supply/demand led than in the Spanish market.
How To Pay For School If You Don't Have Rich Parents (9)
The vast majority of states are involved in these programs. Some states offer reciprocity with other states, which means neighboring states will offer you the same price as if attending school in your own state.
Tips For Selecting A Great Real Estate Contractor (10)
Make sure you do your homework before selecting a contractor in order to prevent your dream from turning into a nightmare. Eric Bramlett is the broker & co-owner of One Source Realty, an Austin real estate company.
Can You Get A Car Loan With No Credit And No Cosigner? (11)
Topics: auto loans, credit card debt, debt consolidation The actual purchase of a vehicle can be very difficult to do, especially when you have never done anything like this before or if you have acquired bad credit throughout your life.
Tips On Avoiding Common Mistakes Made With Student Loans (12)
You'll be paying these loans off for the next ten to 20 years, so use the money wisely. In addition to student loans, a heavy burden is the credit card debt.
How To Launch A Career In Real Estate (13)
Taking Real Estate Classes The first step to becoming a real estate agent is to take the proper classes. Often, you can take classes at a local community college or other facility that provides continuing education classes.
Student Loans 101 (14)
Repaying Student Loans You usually have a six month grace period after graduation before you must begin making payments on your loan. Once the grace period ends, you must make regular payments on the student loan if you want to remain in good standing with the lender.
Should You Use Studen Loans Or Your Retirement Money To Fund Your Child's Education? (15)
Your kids can get student loans, but there's no such thing as a retirement loan. Your 401(k) plan should be dedicated primarily to your retirement, with the secondary possibility that you might need to tap into it for college expenses.
Which Would You Rather Have - A Student Loan Or A Mortgage? (16)
Then later to deal with the disappointment of no available positions after time invested. Or even worse, moving back home which can become a reality. Many have become rich investing in real estate.
Would You Bet 10-Cents On A Game Of Golf? (17)
Well let's see how the bet increases on the first 9 holes: Hole 1 10 cents Hole 2 20 cents Hole 3 40 cents Hole 4 80 cents Hole 5 $1.60 Hole 6 $3.20 Hole 7 $6.40 Hole 8 $12.80 Hole 9 $25.60 At the 9th hole, the bet is $25.60.
The Way Millionaires Really Live (18)
Unofficially, figures put IKEA founder Ingvar Kamprad as the world's richest with a net worth of $53 billion. One of the reasons he managed to accumulate so much money is because of his frugal nature.
Tips For Searching For An Apartment Online (19)
Keep in mind that different web sites will have different listings. Therefore, in order to achieve the most comprehensive look at the available apartments, you will need to check with many different sites.
Winning With Mutual Funds (20)
A check with fundsupermart.com (the largest Asian unit trust distributor) shows that there are just about 300 funds available here compared to over 8,000 funds in the US market. When I made a search on the Top Performing Fund sold locally (year 2005), I was presented with 'Fidelity America USD' with a 10-year annualized return of 11.27%.