How do you gauge if you are on course financially? Are there tools you work with? Or do you only examine whether or not you are earning more than previous years? Personal finance basics will imply that just making more isn?t an accurate measure of financial development. There are basically a couple of numbers that you have to know regularly if you want to track your financial development. They?re not just necessary to know, but also imperative for financial success.
The two numbers you will need to know to become financially successful are:
Your cash flow ? Are you using more than you generate?
Your net worth ? Are you moving in the right path?
Lets us check out both of these in greater detail.
Your cash flow: The difference between how much you earn and how much you keep is called cash flow. Literally, it is the flow of cash. They say cash is king, but I might say that cash flow is definitely king. You see it?s not what you make, rather its what you keep. Remember, broke is broke. Earning $50, 000 /year and spending $70, 000/year isn?t any different than making $20, 000/year and spending $40, 000/year. If you really do not learn personal finance basics then you?ll have difficulty to manage your cash flow.
Your net worth: The uncomplicated definition of a net worth is your assets (whatever you own) minus your liabilities (what you owe). Think of it as a financial compass. There are a great deal of free net worth calculators available on the Internet for free. We also offer a not cost financial calculator if you click the link below. If your net worth is constantly increasing then you can assume you are on the appropriate financial path.
If you keep these numbers on hand and update them on a regular basis then you will guarantee proper tracking of your financial progress. I personally use these numbers to track my progress on a daily basis. This is all part of personal finance basics.
DID YOU LIKE THIS ARTICLE? SHARE IT WITH FRIENDS!
About the Author
You can pay off your debts and save money at the same time! Say goodbye to your boss forever! A blog that will show you the secrets of the wealthy: http://www.howtomanagemoneytips.com
Get a free budget sheet, net worth calculator, tools and more: http://www.howtomanagemoneytips.com/social.html
packers stock sale packers stock sale jason mayhem miller margarito margarito horton hears a who horton hears a who
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.