OutOfDebtBlog.com

Previously we have been looking at the basics of managing money, by establishing the difference between credit (money coming in) and debit (money going out), seen from your perspective.

The problem is that most people don’t know the difference, which in some way is understandable, since only very few has been taught during their time in school.

Today we’re going to dig a little bit deeper - and look at another two important financial terms that you need to know the difference between - so you can start to implement them in your everyday life.

The two words are: Assets and Liabilities - and again they are contrary to each other. This is what they mean:

Assets: Something in your posession that will put money into your pocket.

Liabilities: Something in your posession that will take money out of your pocket.

As it’s printed there on the screen in front of you - it looks quite simple - doesn’t it? But again, a lot of people struggle to tell the difference between these two terms, which is why they end up in financial turmoil.

If you want to successfully get rid of your debts - it is paramount that you know the difference - and act accordingly. Next time you’re faced with the choice whether to buy something or not - when you’re asking yourself whether to go ahead or not - ask yourself “Am I buying an asset - or a liability?”

If the answer to your question is “an asset” - then by all means go ahead and buy! If the answer is “a liability” - leave it behind - and walk away!

When you do this you will find your way out of debt a lot faster - and it will be a lot easier for you!

Technorati Tags: Assets, Liabilities, Managing Money

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If you want to excel in what you do - you must get the basics right. This goes for anything you do in life. Money is no exception!

You’ll never become a world class chess master if you don’t know how the pieces move. You’ll never be the best gardener in the world if you can’t tell a rake from a spade. Never mind being in control of your finances if you don’t know the difference between credit and debt.

I don’t mean to be patronizing. In fact - I’m probably speaking to myself as much as (if not more than) I’m speaking to you.

The shocking truth is that most people, when stopped on the street, probably wouldn’t be able to tell the difference between credit and debt. If you can’t tell the difference between credit and debt - how are you going to balance them?

So who is to blame for this? Is it the individuals who was tempted to, and did, spend more than they were earning? Is it the lenders, for making acces to credit cards and loans too easy? Is it the school system, for failing to provide financial education? The truth is - it’s a combination of them all.

But here’s the good news: It’s never too late to start learning! You can take control of your finances, set up a budget, and start a journey towards financial freedom.

I have made a decision to start that journey - which is why I have set up this blog - in the hope that more people will join me, and start chasing their dreams.

Do you want to come?

Technorati Tags: Money, Managing Money, Financial Freedom

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