Cashflow & Debt Management
Cash is king and debt is not as scary as you may think.
Cashflow and debt management
Unfortunately, very few of us actually get lessons on how to manage our cash flow and debts. For a lot of people, they have learnt the technique from personal experiences. Ever wondered if what you are doing is right?
What is cashflow?
Cashflow is the movement of your money in and out of your possession through income and expenses.
Did you know the secret to long term wealth is not having a high income, it’s through managing cashflow.
- Positive cash flow is where you have more money coming in than going out, resulting in savings. Positive cash flow is useful to meet debt obligations and lets you have money up your sleeve for when you need it.
- Negative cash flow is where your outflows are higher than your inflows in a given period.
It’s not necessarily what’s in the pay packet
We all have that friend who earns a big income and for whatever reason cannot seem to get ahead. That’s because they live a particular lifestyle.
When you understand where your money comes from and where it goes, you can start to take control of this flow.
Is there such a thing as healthy debt?
It perhaps goes without saying that the key to dealing with your debt well is having good debt management skills.
With total consumer debt ever rising, credit card issuers offering more and more types of cards, and housing prices (and their mortgages) going up again, it’s no surprise that debt is often considered a path to financial turmoil. The good news is that there is such a thing as healthy debt. Consumers who understand and learn to manage good debt, can put themselves on the road to financial fitness.
