Learn how understanding how you spend your money can lead to more effective wealth building throughout your lifetime….
You may often hear of “deficit spending” as it relates to government spending at the local, state and federal level, but did you know that as an individual or household you can also have deficit spending that may be working against your long-term wealth building success and the goals that you desire to achieve during your lifetime.
In this discussion TheWealthIncreaser.com will discuss the importance of you knowing at the earliest time possible if you are deficit spending so that you can correct that situation–or avoid it all together in your future if you now have positive cash flow on a monthly and annual basis.
Know Your Cash Flow Position
It is important to determine at the earliest time possible your monthly cash flow–and by creating a monthly cash flow statement (budget) you can get a feel of how you are doing financially. If your monthly income is $10,000 and your monthly outflow is $11,000, you are operating at a deficit of $1,000 per month–or deficit spending of $12,000 on an annual basis.
If after doing your cash flow analysis you determine that you are operating at a deficit you want to determine immediately if this approach is wise or the best use of your money management skills if you are one who desire to build wealth and increase your net worth to a designated level that allows you to enjoy life on your terms?
In most cases it is not wise if you desire long-term success, and you want to take steps to correct the deficit spending if you now operate at a deficit or avoid deficit spending in your future if you are now in a positive cash flow position.
Do Something About Your Cash Flow Position
You do something about your deficit spending by taking the results of your cash flow analysis and cut expenses where you can, get more income where you can or doing a combination of the two.
If your cash flow is not at an acceptable level and you lack the discretionary income to reach your goals and live out your life on a monthly and annual basis at a level of comfort that you desire or need to live at–it, is YOU who must do something about that.
You may have to get a second job, eliminate or reduce expenses where you can and put in place a written plan to pay off your debt so that your financial ratios will improve–along with your living conditions and net worth.
Review on Occasion & Make Adjustments Where Necessary
You must also review on occasion to help ensure that you don’t get into a deficit spending position again–or avoid it altogether if you are fortunate to have never operated at a deficit or are not operating at a deficit at this time.
Once you get your finances at a manageable level and you are on an upward path toward achieving your goals you want to have the mindset that you must on occasion review if you sincerely desire to make your dreams come true.
By getting out in front of your spending at this time you can more effectively manage your spending and gain the additional skills that you may need to manage your money more effectively–and avoid “deficit spending” that has held far too many people back–and they were not able to achieve their most important goals!
Your goal is to perform at your highest level as it relates to your finances so that you can get the results that you desire–and the content on TheWealthIncreaser.com is designed to take your thought level higher so that you can avoid a “deficit spending quagmire” and live more abundantly when you ultimately retire!
You can put yourself in position for lasting success and it all starts by analyzing your finances at this time and making positive moves so whether you now operate at a deficit or surplus, YOU win in the end.
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