Steps To Effective Money Management

Steps To Effective Money ManagementIntroduction

There are two reasons why effective money management is important.The first is that it will enable an individual to cut their bad debt and live within their means. The second is that it will start a cycle of saving that will allow a person to move proactively towards investing.

The seven steps for effective money management are as follows:

  1. Master your inner thoughts and spoken words.
  2. Create a spending plan.
  3. Simplify your lifestyle.
  4. Pay off your bad debt.
  5. Create a balance sheet and income statement.
  6. Write down financial goals.
  7. Learn to invest.

Master your inner thoughts and spoken words

Your inner thoughts are the start of everything that you create. What you focus on expands. Negative, fear based thoughts will manifest themselves into reality if you allow them to grow in your mind. You must focus on the things that you want so that it expands and manifests in your life. Your words are also important as negative words such as “I can’t afford it” or “I will never be rich” will send out the wrong message. The universe only responds to thoughts and words of abundance. From this moment forward stop yourself the second you think or say a negative word and immediately replace it with something positive. You must believe that you can be rich and live a life of abundance. If you have the mental capacity to read this article then it is your duty to get rich so that you can help those that are less fortunate than yourself.

Create a spending plan

A spending plan specifies exactly how you will spend and save your money. I prefer not to call it budgeting as this implies constraint and scarcity of choices. A spending plan on the other hand suggests mastery and control of your finances. It is vital to track every cent that you spend. The idea is to create a list of spending priorities that is aligned to what is most important to you. There is one thing that is non-negotiable. You may not spend more than your earnings and at least 10% of your income must be saved so that you can build capital for investment. You should have a short-term plan that covers the period of a month and a long-term plan that is for a year. This is because certain expenses like home improvements may need longer planning periods. Long term home improvements can also be managed by taking out a loan and paying a fixed monthly amount that fits in with your plan.

Simplify your lifestyle

You can save and live a life with lesser stress if you just simplify. An expensive car and dining out at popular restaurants is not a necessity. Don’t drink coffee at Starbucks or spend money on fancy branded clothing. Once you are earning your desired working income then you can treat yourself to luxuries but if you are struggling to save then really think hard about your lifestyle and spending habits.

Pay off your bad debt

Credit card debt is bad if you pay just the minimum amount every month. If you have a large credit card bill then do your best to pay if off quickly.This is because the high interest will keep you in debt for many years to come and will result in you paying more than the original amount. Sometimes it is necessary to take out a loan to take care of an emergency or a home improvement project. This is not avoidable but get the best interest rate possible and pay more than the required monthly amount so that the loan is disposed off quickly.

Create a balance sheet and income statement

This might sound like a scary proposition and you may think that these financial reports are just for businesses. This is not true, every person needs these drawn up so that they know what their net worth is. A person may be earning a really good income but can still have a very low net worth. Net worth is the total of all your assets such as cash, investments, properties and cars minus your liabilities such as loans. A person can have many assets but may still be in big trouble if they can’t pay back their liabilities. The ideal situation is to have assets that you own completely and liabilities that are not more than 40% of the value of your assets.

Financial Goals

If you have no financial goals then you have nothing to aim for. There is no point in saying you want to get rich. You have to specify the exact amount and the exact date you want it. What is the ideal working income that you want? Write down the exact amount then double it to take into account taxes. What is the exact amount of money that you wish to have in your bank account in five years time? What would you like your net worth to be in five years time? Write down all these figures and look at them everyday before you go to sleep and again when you awaken in the morning. This gives your subconscious mind something to aim for and manifest into your life.

Learn to invest

The interest your money earns in banks or financial institutions will never make you rich. It is important to earn more than 20% interest every year on your money. Financial institutions will never be able to do this for an individual. It is up to each person to learn the skills to invest in the stock market and residential property market. This is a long-term commitment which requires diligent study and application. You must read the books, attend the seminars and listen to a good mentor so that you can acquire the required knowledge. Once you have the knowledge then massive action and discipline is needed to execute the investment strategies. The work is hard but it will be worth it if you can retire early and not have to worry about whether you can afford the lifestyle you want.

Conclusion

The seven steps to effective money management starts with positive thoughts which leads to positive actions. These are not steps designed to reduce you to a life of scarcity but a life of choices and abundance. Choose your thoughts and words wisely, execute in alignment with your goals and you will be pleasantly surprised at the difference it will make to your net worth.

Life Insurance

Life InsuranceLife Insurance: A Slice of History

The modern insurance contracts that we have today such as life insurance, originated from the practice of merchants in the 14th century. It has also been acknowledged that different strains of security arrangements have already been in place since time immemorial and somehow, they are akin to insurance contracts in its embryonic form.

The phenomenal growth of life insurance from almost nothing a hundred years ago to its present gigantic proportion is not of the outstanding marvels of present-day business life. Essentially, life insurance became one of the felt necessities of human kind due to the unrelenting demand for economic security, the growing need for social stability, and the clamor for protection against the hazards of cruel-crippling calamities and sudden economic shocks. Insurance is no longer a rich man’s monopoly. Gone are the days when only the social elite are afforded its protection because in this modern era, insurance contracts are riddled with the assured hopes of many families of modest means. It is woven, as it were, into the very nook and cranny of national economy. It touches upon the holiest and most sacred ties in the life of man. The love of parents. The love of wives. The love of children. And even the love of business.

Life Insurance as Financial Protection

A life insurance policy pays out an agreed amount generally referred to as the sum assured under certain circumstances. The sum assured in a life insurance policy is intended to answer for your financial needs as well as your dependents in the event of your death or disability. Hence, life insurance offers financial coverage or protection against these risks.

Life Insurance: General Concepts

Insurance is a risk-spreading device. Basically, the insurer or the insurance company pools the premiums paid by all of its clients. Theoretically speaking, the pool of premiums answers for the losses of each insured.

Life insurance is a contract whereby one party insures a person against loss by the death of another. An insurance on life is a contract by which the insurer (the insurance company) for a stipulated sum, engages to pay a certain amount of money if another dies within the time limited by the policy. The payment of the insurance money hinges upon the loss of life and in its broader sense, life insurance includes accident insurance, since life is insured under either contract.

Therefore, the life insurance policy contract is between the policy holder (the assured) and the life insurance company (the insurer). In return for this protection or coverage, the policy holder pays a premium for an agreed period of time, dependent upon the type of policy purchased.

In the same vein, it is important to note that life insurance is a valued policy. This means that it is not a contract of indemnity. The interest of the person insured in hi or another person’s life is generally not susceptible of an exact pecuniary measurement. You simply cannot put a price tag on a person’s life. Thus, the measure of indemnity is whatever is fixed in the policy. However, the interest of a person insured becomes susceptible of exact pecuniary measurement if it is a case involving a creditor who insures the life of a debtor. In this particular scenario, the interest of the insured creditor is measurable because it is based on the value of the indebtedness.

Common Life Insurance Policies

Generally, life insurance policies are often marketed to cater to retirement planning, savings and investment purposes apart from the ones mentioned above. For instance, an annuity can very well provide an income during your retirement years.

Whole life and endowment participating policies or investment linked plans (ILPs) in life insurance policies bundle together a savings and investment aspect along with insurance protection. Hence, for the same amount of insurance coverage, the premiums will cost you more than purchasing a pure insurance product like term insurance.

The upside of these bundled products is that they tend to build up cash over time and they are eventually paid out once the policy matures. Thus, if your death benefit is coupled with cash values, the latter is paid out once the insured dies. With term insurance however, no cash value build up can be had.

The common practice in most countries is the marketing of bundled products as savings products. This is one unique facet of modern insurance practice whereby part of the premiums paid by the assured is invested to build up cash values. The drawback of this practice though is the premiums invested become subjected to investment risks and unlike savings deposits, the guaranteed cash value may be less than the total amount of premiums paid.

Essentially, as a future policy holder, you need to have a thorough assessment of your needs and goals. It is only after this step where you can carefully choose the life insurance product that best suits your needs and goals. If your target is to protect your family’s future, ensure that the product you have chosen meets your protection needs first.

Real World Application

It is imperative to make the most out of your money. Splitting your life insurance on multiple policies can save you more money. If you die while your kids are 3 & 5, you will need a lot more life insurance protection than if your kids are 35 & 40. Let’s say your kids are 3 & 5 now and if you die, they will need at least $2,000,000 to live, to go to college, etc. Instead of getting $2,000,000 in permanent life insurance, which will be outrageously expensive, just go for term life insurance: $100,000 for permanent life insurance, $1,000,000 for a 10-year term insurance, $500,000 for a 20-year term insurance, and $400,000 of 30 years term. Now this is very practical as it covers all that’s necessary. If you die and the kids are 13 & 15 or younger, they will get $2M; if the age is between 13-23, they get $1M; if between 23-33, they get $500,000; if after that, they still get $100,000 for final expenses and funeral costs. This is perfect for insurance needs that changes over time because as the children grow, your financial responsibility also lessens. As the 10, 20, and 30 years term expires, payment of premiums also expires thus you can choose to use that money to invest in stocks and take risks with it.

In a world run by the dictates of money, everyone wants financial freedom. Who doesn’t? But we all NEED financial SECURITY. Most people lose sight of this important facet of financial literacy. They invest everything and risk everything to make more and yet they end up losing most of it, if not all- this is a fatal formula. The best approach is to take a portion of your money and invest in financial security and then take the rest of it and invest in financial freedom.

Ultimately, your financial plan is constantly evolving because you are constantly evolving. You can’t set a plan and then forget it. You need to keep an open eye on your money to make sure it is working hard because that money needs to feed you for the next 20-30+ years that you will be in retirement. You have to know how to feed your money now so that it can feed you later.

Ways to Clean Up Your Budget

Ways to Clean Up Your BudgetI was recently going over my family’s finances and was shocked at how much I didn’t really know we were spending on frivolous things. But let me back up a bit… Actually, the idea of downsizing and cleaning up came to me while watching a show on TV last night about tiny houses. (Have you heard about these? I’m fascinated!) Anyway, I got to thinking about how much stuff our family has accumulated over the last four years, living in our 3-bedroom ranch. Keep in mind that our house isn’t a very large house at all compared to the average size. (2679 square feet!) Yet we still have managed to fill it with things and stuff over the last few years… and it’s getting to be a little, uh, cramped. I also want to point out that our house is PLENTY big enough for all of us and we don’t need a bigger home. But we DO need to go through each room and methodically clean up and clean out. Which brings me to our finances; How did we come to purchase all of this STUFF anyway?!

Quite honestly, I’ve been scratching my head for some time now wondering where our money goes… here and there and everywhere it seems. And when we really need something, often we are finding that our hands are tied and we need to use the credit card. My husband and I bring in enough money monthly that we should be able to save, theoretically. Unfortunately, we don’t have much savings at this point and it is time to get a serious handle on our financial past and present so we can secure a better financial future. So here are six very doable ways that I’ve come up with–OK, so these aren’t NEW ideas at all here. I’ve just done the reading and research. Let it be known that I’m definitely not a professional or a financial expert. Please keep that in mind as you read on.

  • Clean up and clean out our house this fall and have a yard//garage sale. This is going to be a LOT of work, but in the end, we will have extra space AND some extra cash to put toward bills or savings.
  • Pay bills second, pay ourselves first. This means taking the 30 seconds to log in to the bank account and throw in some extra cash into the savings account. This is like, rule #1 of saving. Rule #2 is “Don’t touch your savings unless it’s an emergency, and even then, reconsider it!” Haha. Okay maybe not, but clearly for us financial discipline is lacking.
  • Create a daily spending limit and stick to it. That’s right. Daily. Because sometimes, those of us who aren’t so good with budgeting, need serious boundaries. This way, we can really look at “What am I spending my money on? Is this a necessity, a treat, or should I//do I need to save my daily allowance for something in a few days?”
  • Commit to paying down debt. There are a few ways to do this effectively, but, as I’ve been reading, the simplest is to take it in small chunks and pay off the smallest one first. Then tackle the next smallest, and so on. This is a great way to see progress! (And I like to see progress sooner than later!) There is a school of thought–and a wise one at that–that says pay off the debt with the highest interest rate. This is a really good idea too.
  • Focus on needs instead of wants… for now. I think we have to look closely what we want to spend our money on… for me, I like getting my nails done. I also like buying clothes for myself and my family. But right now these things need to be put on hold. We have more than enough, and frankly–even though I loathe it–I can do my own nails for a little while. I don’t want to deprive anyone, but I think it is a valid exercise to simplify life a bit; get creative with what we have, use what we have, and then, after a period of two or three months, see where our financial priorities are.
  • Choose DIY over convenience. This sort of goes hand-in-hand with #5, but I think it’s worth mentioning on its own. It takes five more minutes each morning to make your own cup of coffee rather than shelling out $2.00 for it everyday. ($2.00 x 7 = $14.00 a week! That’s $56 a month!) It takes 10 minutes to pack a lunch at home. See where I’m going here? Time and money are definitely precious commodities, but again, if you’re on a budget, it’s time (no pun intended) to consider what is worth our time versus what is worth our hard-earned money. 10 minutes for a healthier lunch packed at home means more to me than ordering a quick lunch in the cafeteria and not really knowing where the food actually came from.

Money Changes Hands

Money Changes HandsAs I was conversing with a colleague and friend of mine the other day the topic of discussion of personal finance came up. As we conversed we come to the conclusion that money is an object that works for people in many different ways; the truth of the matter though is how you use it. There are some people who has more than enough in personal wealth to the degree that it is not an object to them. Then we have the many people who would like to have more in their finances, but either lack the education or the wisdom to create a better cash flow. We need to have a God-centered attitude when seeking Him for answers to all of life’s challenging dilemmas including finances. Ask God for wisdom and He will grant that to you. James 1:5.

Jesus spoke of personal finance and love more than many other subject matters when he walked the earth. Today, He is still speaking through financial advisors, life and health insurance professionals, and other professions including but not limited to: tax advisors or estate planning attorneys that specialize in areas that has to do with money. These professionals should be licensed in the state where they reside, and should have a non-resident license if they are selling insurance products to help you as a consumer to build and maintain wealth.

There several different ways how money can be and can become an object. One scenario is if you needed funds back had a lack thereof, then that creates financial challenges. The second scenario is, if you have the funds available and you have access to it; to do want you want to do without hesitation of wondering where the funds would come from. Another scenario is if you have hired someone for certain services and have not compensated them according to the agreed amount for their labors, but you have withheld their wages, then this is fraud. James gives and ample warning to the rich who use these negative business transactions. James 5:1-6. We are to become wise stewards of all God has entrusted to us.

There is nothing wrong with having more than enough in material wealth. However, if the use of your financial status are not benefiting the need others, then as someone who has more than enough, you have missed the mark, because it is more blessed to give than to receive. Acts 20:35. Back in the early 70’s the American pop group the O’Jays had a smash hit record titled “For the Love of Money.” “It will keep on changing up your mind,” were some of the lyrics to this particular song. Don’t let money change or fool you; it do what it does, come and go.

Things You Should Do About Your Money

Things You Should Do About Your MoneyMoney doesn’t just happen. You work hard to earn it and get the best from it. But if you’re not a good expense manager and too much of it slips through your fingers like dry sand, today is the day to think about things differently to change the rest of your life for the better.

1. Perk up your pension. The pension climate is changing so much that many financial advisers don’t talk about pensions anymore; they talk about ‘retirement income’. Do you know how much you’ll have? With auto-enrolment putting people into company schemes up and down the UK, this is probably a good time to look into just what your pension pot will be worth to you when you get to retirement age. The government’s Money Advice Service has a really useful online calculator allowing you to get an idea of how much you might have when you retire. If you’ve done the calculation and find there’s not as much as you thought there might be, now’s the time to pay more in. The sooner you start, the larger your pension pot will be. Talking to an independent financial adviser can be invaluable.

2. Keep saving. Living ‘hand to mouth’ with your money is fine – until something unexpected happens, like needing a new central heating boiler, a big bill on the car, or a sudden hike in season ticket prices for your commute. Putting a little bit away each month will cushion the blow when it comes (and it surely will eventually), but before then, you’ll reach the point where you have sufficient funds for a holiday without spending it all. The equivalent of a month or two’s salary is a good cushion to aim for.

3. Divide and conquer. If you’re not a good money manager, and find you’ve overlooked a standing order the suddenly dips your bank account into the red, consider setting up a second bank account. Get paid into the first account. Add up all the monthly bills that go straight out from the bank, and leave enough to pay them all in that account. Include a little extra for the cushion we talked about. Transfer the rest into the second account. That’s what you have to spend for the month, so you’ll have a better idea of what you can – and can’t – afford later on, to stop you having too much month left at the end of your money. Sure, there might be lean times towards the end, but you’ll be safe in the knowledge that your bill are all paid, so you’re not going to get into arrears. Setting up the arrangement could hardly be easier. The bank will help, and you can make the transfer on a standing order so you never need to think about it again.

4. Fight the impulse. So much is bought on impulse today. The thrill of the chase and the adrenaline rush of the purchase may seem less appealing if you decide later that you don’t really want, or worse still, can’t afford, your latest purchase. Never fear! If you still have the receipt, you can probably take back the expensive shoes and put the money towards the electricity bill instead. Who needs a pair of Kurt Geiger shoes anyway?

5. Count the pennies. If you’ve done what we suggest in tips 4 and 5, you can build on that success by using money management apps on your smartphone to track the spending of funds in your second account. Simply key in the value of everything you buy and assign it to a category, then the clever app will do the money management for you by adding it all up. You can even photograph receipts or do voice recordings to record your spending. Expense management was never so easy! And what’s more, seeing what you spend will let you see if there are better (or more enjoyable) ways of spending your money.

6. Make a will. This might be a tough one to talk about, but it could save your family a fortune in the long run. For example, if you’re half of a couple living together and one of you dies without having made a Will, the other may have no claim on funds you’ve saved together. A Will is the only way to issue instructions about where you want your money to go. And it’s not just about money; you may have things of great sentimental, or even financial, value that you want to go to specific people.

Protect Your Assets From Unexpected Events

Protect Your Assets From Unexpected EventsLife is full of surprises both good and bad. If you’re unprepared financially to handle them, these events could leave you feeling anxious about your financial situation. Protecting the assets you’ve already accumulated and your ability to continue building for your future is essential to preparing for the unexpected.

Consider the following examples of how unplanned events could impact your finances:

• The sudden, untimely death of a caregiver for young children could create immediate financial hardship. It could also mean that key goals, such as college or retirement, could seem out of reach.

• An unexpected illness or injury could keep you or your spouse from working. If the disability continues for an extended period of time, it could lead to a major financial strain for your household. Once again, funding for important long-term goals may need to be reevaluated.

• A medical condition suddenly arises that requires significant treatment. Without adequate healthcare coverage, you may need to liquidate savings intended for other purposes.

As you think about the potential surprises in your life, evaluate your current situation and consider whether your protection strategy is adequate in the following categories:

Life insurance

This is one of the most fundamental forms of insurance – protection for family members if you or your spouse should die. The consequences of death can be devastating to a family in many ways, not the least of which is financially. Keep in mind that there is a financial impact even if either of you are not earning income outside the home. If you are a stay-at-home spouse or volunteer, the role you play at home will need to be filled should you pass away unexpectedly. It’s recommended to have sufficient life insurance in place to replace the lost income and to cover a lifetime of needs for your family.

Disability income insurance

Many people overlook the financial risk of a disabling injury or illness, assuming their health insurance will cover additional expenses. If you incur an injury or illness that prevents you from earning your regular income, disability income insurance helps replace that income. This coverage is often offered by your employer, and most plans offer several levels of coverage as a percentage of your income. Make certain your coverage is sufficient to truly protect all of your income needs in the event of a protracted illness or injury.

Extended care / Long-term care insurance

Costs for in-home care, assisted living or a nursing home can be substantial, even if you have a healthy amount saved for retirement. Extended care or long-term care insurance can be used to address a significant health event, pay for medication or treatment, and can help secure quality specialized care.

Property / casualty coverage

While you’re likely to have auto and home insurance, it’s important to make sure you have enough coverage. Common underinsured areas:

• Look specifically at the following limits in your car insurance policy: personal injury protection, collision / comprehensive, uninsured / underinsured motorists and roadside assistance, among others.

• For your home, consider if you’re covered for home media and computer equipment, adventure equipment (golf clubs, bikes, fishing equipment, etc.), and high-value items like fine jewelry, art, collections, musical instruments or china.

• Take a look at specialty insurance for big-ticket items like boats, ATVs, RVs, collector cars and motorcycles as well as special circumstances like pet, earthquake or flood insurance.

Health insurance

The law now requires that you have coverage for medical expenses. You may participate in an employer-sponsored health plan, or you may obtain individual coverage. If you’ve reached age 65, Medicare can be an option. Also consider if vision or dental insurance makes sense for your family. To get started, add up your total healthcare costs last year, then estimate the amount you’ll need next year. Talk to potential insurance providers (or your employer if they offer these plans) about how insurance could be applied to services like new contacts, required surgeries and procedures, or your teen’s braces.

Emergency fund

For unplanned expenses not covered by insurance, consider having cash available in an emergency fund. Whether this is to replace a furnace or to help meet a short-term income need, a good rule of thumb is to have at least six-to-nine months of income in an easily accessible savings account.

How to Choose the Right Bank For A Fixed Deposit Investment

How to Choose the Right Bank For A Fixed Deposit InvestmentA fixed deposit is a great option to save a part of your funds. It provides a steady interest stream and can be a lot safer than equity investments or mutual funds. However, when choosing the financial institution in which to make the deposit, carefully consider some important factors.

Choosing the Right Bank or Organisation

You can safely open an FD account with any PSU or large private sector bank. You can also open an FD account. Many corporates also invite fixed deposits at attractive interest rates, to raise funds for operations.

However, don’t decide where to invest based solely on the rate of interest offered on your deposit. It is one of the important considerations, but there are other details you need to look at.

Security

Public and private sector banks operate under the control and supervision of the Reserve Bank of India. They have to comply with the rules and regulations of the RBI, and cannot default on payments.

However, if you opt for a corporate FD, they’re not regulated by the RBI, and you undertake a substantial amount of risk. Corporate FD might offer higher interest rates, but the safety of your money depends on the company’s financial stability.

Fees and Charges

If you decide to close an FD before the maturity period, your bank may levy a penalty of up to 1% interest on the amount. That is if the bank offers 7% interest on your deposit, and you withdraw the amount before time, you will only realise 6% interest on the deposit up to the date of withdrawal.

Interest Earnings and Tax

If the total interest you earn on your FD is above Rs.10,000 per annum, it will be taxed. Calculate the tax you have to pay on the interest earnings and subtract it from the total annual interest earned to see if the FD is a worthwhile investment.

Compounded Interest

If you have other sources of income, choose to reinvest your interest on the FD, to earn more. The next interest calculation will be on your principal along with the interest from the previous FD. Use a fixed deposit interest calculator facility to arrive at terms that fit your needs

Tax Exemption

Fixed deposits of up to Rs.1 lakh are exempted from taxation under Section 80C. However, the deposit term has to be for 5 years and you cannot withdraw the money before term. Consider the drawbacks of this and invest only if you are looking for ways to save on income tax.

Corporate Fixed Deposits

Corporate fixed deposit schemes are created to enable the company to raise funds at a lower rate of interest. To attract investors, the corporates offer high-interest rates. However, carefully consider the company in which you invest your money. Many companies take this route when banks and lending institutions reject them.

However, not all corporate FDs are dubious. Credit rating agencies like CRISIL review these companies and provide ratings to serve as a guide to potential investors. Choose a company that has, at least, an AA rating or above.

When you are looking for a financial organisation to open an FD, consider all the above points before you make a decision. It is a safe investment option, but your investment may not yield high returns. For that, you may need to augment your fixed deposits with investments in other schemes like SIPs and mutual funds.

Changing Financial Habits

Changing Financial HabitsHabits set the stage for our success or failure.

Initiating a new habit is never easy because starting it is the hardest step. You have to put a lot of blood, sweat and tears to make a new habit stick. In the beginning stages, you go through a lot of ups and downs. As a result, for some, forming new habits or breaking old habits is like battling an addiction.

Paying God First And Then Yourself Are The Two Most Important Financial Habits

  • Pay 10% of your income to tithing.
  • Pay yourself 10%.
  • Pay your debts. Start with your smallest balance so you can get it out of the way, and then roll that over to the next debt.
  • Pay your other bills.
  • Faithfully follow a budget.

Giving Is The Spirit of Abundance

The first step is to pay tithing and then yourself. Once those two are completed then make a payment on your debts.

Giving to charity is important for many reasons. For instance, many wealthy people feel that giving generously to charity was returned to them tenfold; however, don’t give to charity expecting a massive return. Certainly, don’t take out a loan.

Notably, Chris and Orrin the authors of Financial Fitness teach; “The spirit of giving is the spirit of abundance, and living in the attitude of abundance will bless you in many ways.”

They also warn that giving to charity is not a guarantee that you will receive more. It may happen, but don’t depend on it. Instead, you should give because it is the right thing to do.

Follow A Cash Budget If You Are Living Paycheck to Paycheck

Living by a budget is necessary for everyone including the wealthy. However, some need to be more militant about it than others. If you are living paycheck to paycheck you should consider a cash envelope system.

Here are a couple of ideas for budgeting your finances. First, start a cash envelope system, where every payday you distribute money into the various envelopes.

Chris and Orrin recommend paying tithing first and then yourself before you dump money into the envelopes. You can borrow cash from other envelopes if you feel the need, but you shouldn’t add more money until payday.

Another budgeting strategy is to carry a notebook around with you and record everything you buy. This habit will help you to start thinking differently about money. As a result, money will mean more to you. Most people have no idea how much they spend.

Additionally, if you are married, you don’t want to nickel and dime each other to death. Doing that causes a lot of contention. Instead, give each other an allowance. That way you don’t have to micromanage or get on your partner’s case about how she spends money. She can spend it however she wants without worry.