Goals are set earlier and if we do not do any planning how to get it, we wont! Or, we get there with extreme difficulty and hassles.
It's just like planning a trip to Baguio, and you just went without any plan.
How do you start?
With the Goals set, you will define the specific actions you have to take to achieve them. Let me tackle how to come up with plans for each specific goals you have set.
First goal to plan for is How to Increase Cash Flow. Cash Flow put is simply the difference between Income and Expense. So your Monthly Cash Flow is the amount of money you end up with each month after you have deducted all your expenses from your income.
Thus, there are two ways of increasing Cash Flow. We either reduce our expenses or we increase our income.
Let's focus on the Expenses first. This is easy to do as long as you would be willing to adopt a disciplined approach to your spending. This is also where you need to involve the entire family. From the list of expenses you incur daily, weekly and monthly, check what is your biggest expense and determine why you are spending that much and how much you can save
In our own Cash Flow checking, we see that our biggest cost item is our groceries, followed by utilities which includes (water, electricity, and Fuel for car).
For the electricity, we made sure that we turn off lights and appliances that are not in use. So, there you are, the plan is to trun off the lights and electrical appliaances not in use. Action to be taken - IMMEDIATELY. We also bought an electric power saver. So, plan number two was buy an electric saver . This reduced our electric bills by about 5-10%. Monthly bills that amounted to about 5000 pesos now range to about 4500 or 500 pesos monthly savings.
Our water consumption was way out versus standard consumption. We pay about 2500 Php per month. I analyzed the problem and found that there was a huge leak in our waterline. I had to re-pipe our lines and cost me about 10000 Php to do it but saved me 1800 Php which will return my 10000 in less than a year and would eventually increase my monthly in-flow of cash rather than continue to leak out my money to the drain literally.
Groceries was a little bit difficult to approach specially if you have children who are used to simply put anything and everything in your grocery cart each time you go shopping. When we started to reduce grocery expense, it put some stress within me as I want to be a good provider for my family, but at the same time, I want to get our finances fixed. This is where the discipline comes to the forefront.
For your own expense reduction plan, use the Cash FLow Worksheet and see what your biggest expense itmes and from there define your own action. Each one of us have unique needs and therefore will have varying itmes for reduction. But, the same principle applies, you jus need o find out the appro[priate actions which would have to involve your family as well.
The next plan you need to define is how to increase your income. For some of us, our income streams are primarily from our jobs. We work and get paid every end of each week or every 15th day or every 30th day of each month.
Working to get paid is the easiest way of assured income but not necessarily the surest way to riches. To increase income, you need to have two make full use of two improtant resources: Time and Money.
Time is also spent. If you spend it wisely, it give you return. If you waste it, you even end up wasting money in the process. Thus, for us to increase our income, we have to use wisely to the max our time. How do we use our time wisely?
1. Use your time to increase your knowledge. Knowledge is power.
2. Use your time to create your own business and earn passive income .
To increase our knowledge, we need to read books, search the internet, or attend seminars that will give us financial literacy. Obtain the much needed information you need to be able to save and invest properly. You'll be surprised, there are internet sites and seminars that are free.
For our case, we attended seminars and read books of Bro Bo Sanchez. We also read through internet blogs , and many readings. We also attend continuing education from our company IMG.
As we learn, we also earn. In our company, we are able to provide free seminars to people who want to change their financial life. In the process of learning, we also give opportunity to build their own business.
So that is our first part of planning.
Next will be how to plan for Protection.
God bless!
Very helpful tips.
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