It is very simple: To gain wealth, you must spend less than you earn.
Being fiscally astute is not rocket science. Let’s review simple options to help you turn your spending habits around and achieve a positive personal cash flow.
Making changes to your spending can feel hard. Persist. Being cost-conscious will have a far greater and positive impact on your life.
Sue and Richard are a newly married professional couple. They have no children and earn a very decent income as corporate lawyers. The mystery was they were living pay to pay. Truth be told, they were behind! They had acquired few assets other than a great car, substantial wardrobes and an eclectic wine collection.
Sue and Richard required assistance to manage their income and expenses so they could save to purchase a home within the new few years. Their immediate need was to understand where their funds were going.
Their Accountant listened and reviewed the limited financial information they provided. The Accountant recommended that they start by completing a budget. This would allow them to recognize just what their outgoings were and therefore their capacity to save. From there, they arranged for their salaries to be split into various accounts, each of which would serve to cover particular outgoings. Surplus funds would be directed to a high-interest at-call account to be used to fund their goals.
With their immediate issue solved, the Accountant helped Richard and Sue to develop clear financial and lifestyle goals then created a cash-flow management plan designed to achieve them.
Today, Richard and Sue have begun saving for their first home. Their Accountant will also continue to help them build and protect their wealth for the future.