Stress Free Finance

Do the signs that The Great Depression may be coming again have you worried? Are you trying to figure out how to protect yourself if the financial system crashes?Are you thinking about ways to bullet-proof yourself before the financial crash? Here are some steps to take starting now.

To start, you must understand the definition of ‘economics’ as it pertains to your own personal or business finances, and how you can use that knowledge to your advantage.

ForgetDon’t pay attention to what the media says about ‘economics’ when they discuss the roller coaster ride of the stock market, shortages of supply against demand, inflation, mortgage foreclosures by the banks and the unemployment figures. Those are ‘economic characteristics’ that guage an area much larger than you can control.

What you do have control over is your own personal and business economics. The definition of economics I am using is the original one; meaning ‘the art or science of managing a household or business.’ And that is something that you CAN control.

There is an art to managing a business or household. It is necessary to have specific skills and abilities, such as putting in organization so things run better. There is a science of managing a company or household, especially in the money area. Here is what you can do to ensure that the economics of your business or household are strong and unshakable, even though the general economy is on a downhill slide to disaster.

1 - Use CASH Not Credit

Every time you make a purchase using credit cards because you don’t have the money to pay for it, you are promising your future earnings to the the credit card company. Those future earnings is guaranteed to be needed to pay your regular business or household expenses. That is committing yourself into the hands of an economic slavemaster called the credit card trap.

An exception is purchasing property that grows in value, such as investing in some commercial property or buying a second home that you use to increase your income from rents collected. Using your money to make more money is smart money management.

Tip: Be sure you negotiate a big discount when you pay with cash. When the economy is spiraling down and credit is harder to get, the person who has the cash is king. Another item worth a mention is, find out how to buy wholesale rather than paying retail prices to lower your cost even more.

2 - Don’t Spend More Than You Earn

Take a lesson from your grandparents or parents who earned little, but managed to live well. Cut expenses to a level below what you earn. The quickest route to financial disaster is spending more than you make. It’s possible to keep a good quality of life while eliminating discretionary spending. This can be done by acts such as buying used equipment rather than new, and eating less often in restaurants. Bottom line, don’t buy what you don’t need! That is smart money management.

3 - Money Must Be MADE Before It Gets Spent

If there is some future large purchase you need to make, start putting away small bits of money in a savings account for that purchase and don’t stop until you have the cash to pay for it.

On a household level, if your child will be entering college in 10 years, then find out what the tuition costs will be and find out how much moneyyou have to set aside every week to have the total amount the year they graduate from high school. Plus turn in applications for each student scholarship, grant or financial aid package you can find.

On a company level, if you need to purchase or upgrade a furnishings or equipment for your business , then find out what the cost of that will be and find out how much moneyyou have to put away every week to have the total amount the month you will need to make that purchase. Plus look for each place you can find to get the lowest cost possible.

4 - Stash Some Money for Emergencies and Operating Expenses

You will sleep much better at night than the financial security of knowing you have money tucked away in savings for emergencies like needing to repair the car or an office machine, requiring some unexpected dental work or losing a job. When you have a stash of cash you can immediately use, then magically, you stop worrying about money, and your focus returns to living life and enjoying it, and making money suddenly gets easier.

The only thing you have to be afraid of in a great depression is not having a cash cushion sitting in a savings plan you can immediately get your hands on.

Did you know that more millionaires were made during The Great Depression in the United States than during any other era in our history? How was that possible? In that time, the economy took a nose dive, the stock market crashed, prices went through the roof, unemployment figures shot up like a rocket as businesses closed, and people who lost their jobs also lost their homes.

Those who had cash stashed away were able to purchase houses, land and entire businesses for pennies on the dollar. Those individuals became overnight millionaires because they had enough cash to weather the storm called The Great Depression.

Out of every bit of income that comes in the door, immediately set aside 10% and stash it in an interest bearing account that you have designated for your cash cushion. Perhaps you’ll have to cut expenses AND work an extra job to build your cushion of cash. No no moaning about how you can’t, JUST DO IT! As the days and weeks roll by you’ll find you sleep better at night and walk through life with a lot more confidence knowing you have achieved financial freedom and have protected yourself from The Great Depression looming on the horizon.

Why is controlling the flow of your money so important? It is the energy and life blood of a business or household. It is necessary to pump some of it through the income producingareas first to keep it running well, and also to stash away some of it for future survival. Everything runs better when enoughcash is available. The Money Management Solutions software guides you towards making the most advantageous decisions about how to use your money to generate more profits and build wealth.

Sandra Simmons, President of Money Management Solutions, has years of experience helping professionals and private individuals manage their income to reach their financial goals. To learn more about the Money Management Software she created, watch the FREE 5-minute demo video on her website at http://www.moneymgmtsolutions.com

- Sandra Simmons