This is a great quote (and one of my favourite money quotes), highlighting the importance of cashflow.
The importance of cashflow
Never spend money before you have itThomas Jefferson
This is one of the most basic tenants of good financial management. It’s something that we probably have all heard before but yet we often ignore. It’s so easy to just grab your credit card and quickly pay for things when we don’t actually have the money. Or, we use the store card with all the “benefits”. We don’t always know what our financial situation is, but we just keep spending. Sometimes even make excuses for this by saying things like “oh, it’s almost payday” and we rely on the money we don’t actually even have yet!
Now there’s nothing wrong with using your credit card; I use mine for over 90% of purchases. However, I know that I have the money that I am spending as I use a great app to track that. See how I use YNAB in South Africa. There are however many apps to choose from so obviously find one that works best for you!
Have a look at why cash flow matters and how you can change the cycle of your spending. Instead of spending first and earning later (which is a bit back-to-front), you should earn your money first, then spend it.
It’s not easy to break the cycle, but with a little effort and focus you can change things around so that you eventually get to fully choose what to do with your salary instead of seeing the money dissappear towards debt repayments the moment it hits your account.
Think about the quote again and how it relates to your circumstances.