A Simple Cash Flow Strategy that You can Follow

Simple personal cash flow management beats out a complicated one every single time. You’ve probably met your share of people who have a lot of complicated knowledge about personal finance and all these ideas about how to achieve financial freedom, yet they’re broke or pretty close to it.

When you think about it, smart people often have a very difficult time using their knowledge to create real life results. Funny how that works, yes?

This is because simple personal cash flow strategies are a LOT more applicable to real life…especially when your commitment is tested. Let’s look at one simple personal cash flow management system that is proven successful.

The Four Buckets: A Simple Personal Cash Flow System

The four bucket personal cash flow system is so simple that once you get into the habit of using it, you can almost live off of it without having to refer to a written spending journal. It works like this:

1. Commit the first 10% of your income towards investing

2. Commit the second 10% of your income towards building cash reserves for the sake of emergencies or planned purchases.

3. Commit the third 10% of your income towards charitable giving

4. Commit the remaining 70% of your income towards living expenses.

Now, just a few things about the order here; the first being… DON’T CHANGE IT!

One of the most common habits which broke people have is that they try to pay their expenses and then invest what’s left. This is a certain way to remain broke forever. If you want to start investing money towards building financial security, it MUST become a priority.

If you think you can’t pay your expenses with only 70%, start with 5% in each of the other categories and work with that until you get your expenses down to 70% or less.

However, don’t change the order, because that’s the secret to getting your financial habits turned around and getting out of the paycheck to paycheck trap.

The other thing you might be tempted to change is the giving step. However, it might interest you to know that the marketer Dan Kennedy (also known as “The Millionaire Maker”) recently stated that giving was one of the most powerful wealth building strategies….so try it out before you dismiss it.

Keeping it Focused and Simple

I had mentioned that the four bucket personal cash flow system is so simple that you can almost live off of it without writing things down. However, you still need to keep a written spending journal if you want this simple personal cash flow system to work wonders for you.

Writing down your spending will keep you focused and disciplined which is the key to long-term success in achieving financial freedom. You can start your simple personal cash flow system today and find out just how effective it really is.

Be successful!

There is more… Click here to receive your free ebook on Personal Wealth Building and learn more…

Image made available by Marian Kraus Photography Inc.

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Posted in Cash Flow, Creating Wealth

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