There are ultimately four things that we can do with the money we’ve been given: Give, Live, Owe, Grow. We can give it away, use it to live on, owe debt or taxes, and grow (or save) it. In order to take steps forward financially, it’s important to first understand where your cash flow is going. It can be a very helpful exercise to look back at the past year to see where your funds have gone. What percentage did you have in each of the categories? What stands out? What would you like to change? Having this information can be very helpful to determine what you’d like to adjust moving forward.
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