KEYSTONE HABITS @ FINANCES
Simplicity is the key to financial health, so let’s keep things simple.
What gets measured gets managed. What do you say? (Please mention in the comments section)
1. First, it’s better if we measure our incoming & outgoing expenses for a month.
2. Now, we identify the 20 – 30 % items on our OUTGOING EXPENSES, which consumes 70 – 80 % of our finances for the month.
3. We do the same with our INCOMING EXPENSES, that means the few items which are a major source of our income.
4. Now tally whether we are running in Surplus or Deficit for the month.
5. If it’s Surplus, then it’s good news. In case it’s a deficit, we have one more thing to do now.
6. Now, we calculate our SAVINGS & then estimate-How long can we survive with these SAVINGS & DEFICIT in the monthly balance sheet before going into debt?
Of course, this is a too simplified version of FINANCIAL MANAGEMENT.
We can discuss this in detail soon.
Please feel free to add anything more to it.