All money management survival guides will tell you the exact same thing. There’s only one way to be profitable in business and in life: make more money than you spend.

This might sound so obvious that it’s ridiculous to have to say it, but think about how many of us really don’t make more than we spend. People often carry huge amounts of debt and, even if they’re making the minimum monthly payments, they still owe more than they make between the principle and interest.

Pay Off Debts Quickly

Deficit financing can actually be done successfully, but the idea is not to stay in debt forever. Sure, we might have to borrow at some point when we’re putting together our business or just getting started on our own after we graduate, but we prefer to do all we can to minimize our debts and pay them off as fast as possible.

We need to maximize our income, although this can be easier said than done for many people. But equally important, we have to minimize expenses. This is even more difficult for some of us!

Consumer Envy

While consuming can make life fun, our society is caught up in the cult of consumerism. People are driven to spend every last penny they make in income, especially if they see neighbors or coworkers with the latest trendy “thing.”

If they have spent their money on the things that are necessities in our society – housing, groceries, personal health, utilities, transportation, and communication tools – they are now enticed to spend even more money on discretionary goods and services like going out to eat instead of cooking, taking elaborate vacations or weekend getaways, more elaborate stereo systems, satellite televisions, giant-screen TVs, a larger house, a new car, a boat… the list is endless!

Salesmen are trained “not to leave money on the table” and marketers are trained to compete for every last dollar in the fear that, if they don’t get the sale, somebody else will beat them to it.

If you want to have money for something that will really add quality to your life in a lasting way, some portion of your money must be set aside either in savings or investments that are not too risky for you. This also helps to keep your expenses under control.

Here are some practical tips for minimizing your monthly expenses:

  • For your business, consider a virtual office. You’ll save on rent, permanent employees, and commuting. Plus, try marketing on the Internet as much as possible.
  • For your personal life, cook more and eat out less (even for lunch). When you go shopping for groceries, look for sales and use coupons when possible.
  • Take more recreational trips closer to home and see your hometown through the eyes of a tourist.
  • If you need to finance something that’s not an absolute necessity, think twice about it; take better care of what you have now so you don’t need to replace things so frequently.

Smart money managers are those who take the time to understand their finances, research ways to cut expenses, and communicate with their families about why it’s necessary to cut back. By exercising control over your money and determining if you really need to buy something, you will suddenly see extra money in your bank account at the end of every month.

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