There are two kinds of people. The first one has a tightly closed fist when it comes to dealing with money. This is the person who lives beneath their means. They think of the future more than the present. So, as much as possible, they set money aside for safety. The other type of person has a widely open palm. This is the type of person who lives beyond their means. They think that the present is all that matters. So, they spends money like there’s no tomorrow.
The first type of person makes sure that they always have something left for their savings. The other lives on paycheck after paycheck. Both people have a stable source of income but have a different approach in handling money. It is certainly not the end of the world for the second type. They can spend less and live below their means or find another source of income to have a positive cash flow.
The second type definitely faces more problems than the first, specifically problems that deal with debt. As a consequence to their spending spree, they need to fill it in and as this goes on, they find themselves with too many debt than they can handle. To resurface their needs and to turn the negative into a positive cash flow, here are some of the things that you can do:
1. Watch the gap. In order to earn more money, this person has to watch the gap between how much they earn and how much they are spending. Wealth is the difference between earnings and spending. As the gap widens, the chances of gaining or losing wealth also expands. Now, it matters whether the gap results to a positive or negative number. But the person has to be more conscious and watch out for it.
2. Smart spending. Being frugal does not mean a person should tightly hold on to their money or to not spend a penny until they starve to death. The person can still enjoy their life, but they just need to spend their money wisely. Budgeting is a hated word and task but people who adapt it as their bible get ahead among the pack. Prioritizing the basic needs from simple wants is one thing. Another is exploring more affordable shopping options.
3. Cutting back. Having a negative cash flow does not necessarily mean the person is sloppy when it comes to dealing with their money. Some of these situations are brought about by recurring payments such as loans and mortgages. The solution though is to cut back on unnecessary spending so the obligation will be covered without draining the life out of the pockets.
4. Spending tracker. Another helpful way to start living positively is to keep a spending tracker. By recording what they spend everyday, they can monitor their money much more closely and plan it accordingly. The rewards of having a positive cash flow is not as immediate as going shopping for tangible things but it brings about a sense of fulfillment and pride. For people who want all the richness of life, discipline is a must.
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