Bill Earle said, If your outgo exceeds your income, then your upkeep will be your downfall.
There are two simple rules that will guarantee success with money.
- Pay Yourself First
- Spend Less Than You Earn
Too many people make money more complicated than it has to be.
Now we are moving into a period where the economy is dipping.
The last ten plus years have been years of great economic expansion.
When times are good, money overflows and people get loose with their spending.
They lose discipline with their money and a momentary shock to the economy leads to significant problems.
The economy is entering a downturn and some business will struggle.
Some businesses will close their shops for good.
Others will be able to weather the storm.
What will be the difference between those that weather the storm and those that close up shop.
The ones that won’t survive will spend more money than they earn.
Most likely they will stop paying themselves in an effort to save those that work for them.
Now is the time to start calculating how much of a runway you have to run your business.
What can you do to keep the business afloat to weather the storm over the next few months.
Assuming you make it through this time of change, it’s time to set up a system to prepare for the next downturn.
Use this as a wake-up call to do things different so you will be prepared in the future.