Author:
MICHAEL G. SHINN (SAD TO SEE SO MANY WORKERS LOOSE MONEY)
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Date Posted: 12:52:14 05/23/08 Fri
Author Host/IP: 219.sub-75-223-207.myvzw.com/75.223.207.219
In reply to:
FIRED SHOP STEWARD/ STATION CLEANER
's message, "managing your cashflow" on 12:46:25 05/23/08 Fri
>Have you ever stopped to think how much money you will
>make over a working career? You may not realize it,
>but you will take home a fortune from earned income
>alone. For example, if you earn $60,000 per year, over
>the next 20 years you will earn $1.6 million! That's a
>tremendous amount of money! Where did it all go?
>
>MANAGING YOUR CASH:
>
>If you want to achieve your financial goals, you have
>to manage the major source of your potential
>wealth-Your cash. Effective cash management can help
>you estsblish liquidity and build wealth. Below are my
>five steps to cash management.
>
>FIVE STEPS TO CASH MANAGEMENT
>
>Step-1 Start by gathering your financial recoards for
>the past three months to determine your monthly net
>income and expenses. Since income and expenses can
>vary from month to month, you may have to estimate
>some cash flow items for all twelve months to come up
>with a monthly average.
>
>Step-2 Create a cash flow Worksheet. This will give
>you a baseline for your monthly case flow. You can
>setup your own spreadsheet or use online resources
>such as: moneycentral.msn.com; mymoneymanagement.net
>or purchased software programs like Quicken or
>Microsoft Money. Subtract your monthly expenses from
>your income. Hopefully, you will have a positive cash
>flow. This could mean one of two things, either you
>have under estimated your expenses or you have money
>left over at the end of eash momth that you can use
>for savings. If you have a negative cash flow, this
>means you will fall short at the end of each month and
>have to come up with extra money.
>
>STEP 3- Used your cash flow Worksheet and track your
>actual expenses for sevaral months. At the end of each
>month, tally up all of your income and expenses, using
>your pay stubs, checkbook, credit card statments and
>receipts. Buy a pocket-sized notebook to keep record
>of out of pocket cash expenses, such as taxi fares,
>lunches, haircuts, movies, magazines,etc. It will take
>about three months to get a good handle on your
>expenses with your original estimate and readjust your
>estimate.
>
>STEP 4- Analyze your cash flow statement. Have you
>maximized your income potential? Would overtime or a
>second job for a few months allow you to remove the
>albatross of bad dept from your life? Look at your
>expenses. Are any of them out of line, such as
>clothing, entertainment, eating out, transportation,
>etc? Consider alternative ways to reduce expenses such
>as; buying clothes during seasonal sale periods,
>cooking meals at home, or using public transportation.
>It's all a matter of choice.
>
>PAY YOURSELF FIRST
>
>STEP-5 Establish a savings goal of between 10 to 20
>percent of your gross income. You are probably
>thinking, "Sure I want to save, but I can barely pay
>my bills." The secret is to save first and spend
>what's left over. Savings must be the first item in
>your budget every month. Pay yourself first, becouse
>you do all the work. Many families set-up automatic
>savings withdrawals from either their paycheck or
>checking account. If you don't see the money, you are
>less likely to spend it. Some might say that this
>seems like a lot of work and it is! But, think of the
>time as an investment, that will help lead you and
>your family down the road to "Financial position is
>not where you want to be, you have to take control and
>make it happen!
>BY MICHAEL G. SHINN
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