How do you make your money go further without ever having to spend it?
By using circular flow models.
You can be a millionaire in one week if you do.
The trick is to be mindful of your finances, which are constantly changing, and make sure you’re using a balance-sheet-based model to calculate your future earnings.
If you’re still not sure where to start, here are a few tips to get you started: Read and review your income statements.
The more information you have on your income, the better.
You may need to take on more debt, but you can always refinance it to save for a down payment on a house.
Use your own income to forecast your expenses.
If your total budget is lower than your mortgage payment, that could mean you’re spending more on the essentials.
Don’t forget about the essentials: rent, gas, internet, and other costs, like a car, washing machine, or TV.
Pay attention to your bills.
This is especially important if you’re planning on buying a home.
Make sure you pay all of your bills in full every month, but also keep an eye out for your utility bills.
If it’s overdue, consider refinancing.
If the loan you’re refinancing is for a home purchase, your savings will be more likely to grow.
And if the home purchase isn’t in your financial best interest, you may be better off paying your bill on a monthly basis rather than on a rolling basis.
You might even have more cash to spend on things you’re not going to use.
If these points don’t sound appealing to you, think again.
You’ll have a lot more money to spend in the future if you start to make regular investments in your savings account.
The best way to do this is to put some of your income towards your mortgage, which will help your future financial success.
Keep track of your expenses so you can keep tabs on them.
This will help you know when you can and can’t make your financial goals, which could save you from a nasty surprise in the near future.
Be sure to keep a balance sheet.
By using a circular flow, you can easily calculate your expected return and how much you should be saving.
It’s also a good idea to keep track of what your total expenses are.
This could include things like insurance, utilities, car payments, and child care.
If a part of your budget is going to be going towards an expense, it could be worth noting that part of that expense in your budget.
When you’re ready, start to track your income.
Your salary is a good indicator of how much money you can make.
Pay yourself a salary, and you’ll know you can afford to keep your lifestyle relatively affordable.
If that’s not the case, look for ways to reduce your costs by increasing your hours, getting rid of unnecessary items, and so on.
If all else fails, you could consider working part-time to get by.
This can be particularly useful when you’re in your 20s, and it may be a good way to save some money.
For the sake of your future, it’s a good time to start thinking about whether you can realistically live on a budget.