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“Rich people manage their money well. Poor people mismanage their money well.” – T. Harv Eker.
Money management simply understands
- where your money is coming from,
- where it is going to, and
- where it fits in your overall life goal plan.
|Money Management. Credits: 401K (2012)|
- Open up a separate bank account and designate it as your Financial Freedom Account. Put 10% of every dollar you receive (after taxes) into this fund. This money is for investment purpose only & buying or creating passive-income streams; such as businesses. Eventually, you get to spend the income from the fund, but never the principal investment itself. This will create passive income for your retirement.
- Create a Financial Freedom jar in your home. You put all your loose change, and even extra cash here in order to get used to being around money. You fill a fridge with food, and feed a plant with water, so why not keep a jar around filled with cash. This is good.
- Another 10% of every dollar you receive should be set aside and marked as your “play money.” This is money that you are REQUIRED to spend every month. Make sure you spend the "play money" doing things you wouldn’t normally do. It’s not for groceries; buy yourself a new shirt, go out on a fantastic date, receive a top of the line massage, take an awesome cruise at the end of the month or even buy that thing you’ve always wanted.
- Create a 10 percent into your Long- Term Savings for Spending Account. (Such as a new car, wardrobe, travel, riskier business opportunities)
- Create a 10 percent into your Education Account. For your children and for your continuous learning or honing of skills & knowledge.
- Create a 50 percent into your Necessities Account.
- Create a 10 Percent into your Give Account.
|Stress Free Zone. Credits: PalawanBeaches.com|