Debit Cards V Credit Cards
When you’re under 18, you’re lucky! You can’t get into trouble with credit cards as you are under the legal age! But a lot of young people are encouraged to get credit cards when they turn 18! Beware as misuse of a credit card is one of the easiest ways to get into debt.
Let’s first look at the differences between the two. A debit card gives you access to your own money, so you are limited to withdraw or spend only as much as is in your account. When you turn 18...
Fixed and Variable Costs
Cashflow is a fancy word that measures the money being received (Income) vs. the money being spent (Expenditure).
Ideally when you subtract your expenditure from your income, you will come up with a positive answer, which means financially, you're going ok.
Income > Expenditure = 
If you don't you are said to have negative cashflow. You are living beyond your means and heading down a shortcut to financial disaster.
Income < Expenditure = 
Let's take a look at your personal cashflow. First, Click here to download your financial reality worksheet.
Step 1 - Income:
Mark down where you earn money from, and how much you earn each week. Include the pay from your part-time job and any pocket money or allowances you may earn. Total it up for your weekly income.
Step 2 – Expenditure:
Now think about your expenditure. Exactly where does your money go each week? It might be hard to come up with detail of every expense on the spot.
If so you may need to mark down expenditures as they happen throughout the week. Include everything, from your can of coke to your new surfboard. At the end, tally up each expense for your grand total.
By repeating the exercise each week over a couple of weeks, you'll get an even better idea of your spending patterns. You'll also learn more about your fixed and variable costs.
Step 3 - Cash Flow:
Subtract your total income from your total expenditure to work out how much money is left over. This is the amount you can contribute to your goals.
Have you ended up with a negative cashflow? Or spent this week's income repaying what you borrowed last week? Not good!!!
Our next step in your financial game plan is to figure out how long it will take to achieve your goals by putting your spare cash to use. This is where the action happens – with your strategy.
