Gary R McCarty

So many working Americans are living paycheck to paycheck. Stress, relationship and health issues are partially caused financial worries and pressures. What is the common practice that most people do when they get an increase of pay?

If you are like most successful people your answer is a simple one. Put the increase back and save it for a rainy day.  Others may also answer that is is prudent to add the increase to debt in order to lower the amount owed and potentially decrease the lending costs of interest.

Guess what. Either answer is a smart one. Paying yourself first is always a great idea. This creates a pool of money that is available when the cash flow decreases or an emergency comes up.

Lowering debt makes great sense in the long run. By paying extra on the smallest balance to get it to zero is not only good for the budget. It feels great for the ego. After the smallest balance is gone, take the amount that was being paid on the smaller account and add it to the next smallest account. Dave Ramsey refers to this as the Debt Snowball. I consider this a great method to win in the cash flow game.

At the end of the day financial success shouldn’t be measured by the money we make but rather the money we keep. And we get to keep more of our money by controlling our cash flow. And when we are in control of cash flow we have the freedom to make sound financial decisions.

What a concept.