4 Tips for Managing Your Cash Flow
Financial freedom is certainly within reach of everyday Australians, but unless we learn how to be smarter with our money, we’ll miss the opportunities around us.
Use the following 4 tips and strategies for managing your cash flow; a vital skill if you want to start investing in houses.
1. Measure your incoming and outgoing
The foundation of a good cash flow management system is a means of measuring the money coming into and leaving your possession.
Obviously, budgets are the tool of choice, however what’s more important than picking the kind of budget is actually following that budget.
If you’re detail oriented and want all of the facts, right down to the last penny, the type of budget you use will be different than someone who just wants to know what they can and cannot spend and what to do with the money they don’t spend.
You don’t have to go the old fashioned pencil and paper route…you can use technology to help you stay on top of your finances.
Bottom line, if you’ve been thinking at all about investing in houses it’s important to establish good financial habits so that you can make the most of every penny you invest.
2. Create an investment strategy
As part of your budgeting you need to know what you’re going to do with the extra money you find.
Speak with a financial planner to find out where you’re at right now, and to help you create wealth for your future by investing in houses.
Your future is too important, however, to invest without a plan. A good strategy will make the most of what you have and protect you from making poor choices that cost you money.
3. Eliminate bad debt
What is bad debt?
Debt that doesn’t pay you back in some form. For example, if you’re investing in houses, the debt you may have on your investment properties is considered good debt because it provides tax benefits.
Credit cards, car loans and other personal loans, however, are bad debt. In terms of the car loan, for example, you’re paying for a depreciating asset that doesn’t provide a financial return.
Once you’ve wiped out your bad debt your increased cash flow can then be used towards your wealth creation strategy.
4. Be smart with your taxes
Ever wish you could pay more taxes?
Of course not. Who does? But many of us pay more taxes than we should, simply because we don’t have a smart tax plan in place.
Find a savvy tax professional who is experienced with investing in houses (preferably someone who is an investor himself) and work out a tax plan that keeps more money in your pocket which you can add towards your wealth creation plan.
More tips related to Property Investment? Book a FREE consultation with one of our Property Investment Experts!
Budgeting, together with saving is the foundation of every successful wealth creation plan. If you don’t know where your money is going, and if you’re not diligently saving it, you’ll lack the resources to build a comfortable future for yourself and your loved ones. A...
The following article has been supplied by the ATO containing tips related to your investment property.
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