Ask Ash Cash: How Can I Manage My Money to Take Control of My Finances?
AllHipHop.com’s resident Daily Word guru and all-around inspirational guy, Ash Cash, is back with his latest installment of “Ask Ash Cash.”
Watch the video below his response, as he offers more sound advice to readers:
Peace and Blessings! Welcome to another addition of "Ask Ash Cash," where we go into the streets and answer all of your finance and business questions. Remember you can send your video questions to Questions@AskAshCash.com or via Twitter (@IamAshCash, use hashtag #AskAshCash).
Today's question gets down to the core of what you need to know in order to begin to get your money right! Tony from NYC asks, "How can I manage my money to take control of my finances?" This is a great question, and this is actually a lesson that I need you to take action on immediately!
The best way to take control of your finances is to figure out how much money is coming in and how much money is going out.
Step 1. - Take out a piece of paper and draw a line down the middle.
Step 2. - On one side of the paper, write down all the income that you have coming in. On the other side, write down all of your expenses that are going out.
Step 3. - Add up all of your income, then add up all of your expenses.
Step 4. - Subtract your expenses from your income and figure out whether you have a zero, positive, or negative number.
FYI - This number you come up with is called your "bottom line." If your bottom line is zero, that means you are spending exactly what you make. If your bottom line is a positive number, that means you have more income than expenses, and if you have a negative bottom line that
means that your expenses are outweighing your income. In most cases, people have negative bottom lines because of mismanaging of finances, the economy, not having a budget or all of the above... It's OK because finding out the problem will help you solve it.
***FACT*** There are only THREE ways to increase your bottom line: 1) Cut back on your expenses, 2) Increase your income, 3) Do Both.
Step 5. - Figure out which option you will use to increase your bottom line. Once you have come to a conclusion, rewrite your budget and begin to implement this immediately.
If you follow these simple steps, you will always have your money under control. I suggest that, in the beginning, you take these steps monthly just to make sure you are keeping up with your budget. If you notice that you have a positive bottom line, DON'T immediately begin to spend
the excess. Instead, put the money in a savings account so that you can access it in the future for emergencies.