In order to manage wealth the desired amount of wealth has to be determined. Is the amount of wealth greater than cost expense? Is the amount of wealth short compared to the debt? Do income and debt break about even? Are there goals that will require additional financing? Deciding the current expenses and forecasting future expenses, can decide the current amount of wealth to be managed.
The first thing to do is to calculate the monthly income from all of the contributing sources. Then decide all the expenses for the contributing parties? It is always suggested to round any figures up and to keep a miscellaneous fund. The rounding up and the miscellaneous funds are for costs to increase or unexpected costs. Take the sum of the monthly incomes and subtract the sum of the monthly expenses. This is the core result of wealth. Looking at this result will show if the individual is short, even, or has additional funds and they can begin their wealth management.
If the individual is short in funds some decisions have to be made to cut some expenses and/or start to make some additional income. This can be done by changes such as eating out less often and getting an additional part-time job. Both of these changes would make for more funds and allow better wealth management.
Obviously if the individual breaks even they do not need to make the changes, but maybe they would like to add some extra curriculum activities to their current lifestyle, but haven’t because they have not had the money. They could do the same as the individuals that are short, but maybe not have to do both. Maybe eat out once a month instead of once a week and taking those saved funds and put them away for a vacation.
The individual that is making enough money to live within means and have some to save for extra curriculum may want to still only eat out once a month. They can then take that money that they save and invest it. Maybe they already have stock and bonds that could have investments of additional funds or maybe they would like to look at future goals such as retirement investments and locations.
Wealth can be managed at any time in a person’s career. Taking the time to see what funds the individual has or doesn’t have to work with is the first step. After that, decisions can be made to change the amount of wealth to manage and manage the wealth for what the future will be.