Budgeting for the Future: Cash Flow

Money comes in and goes out every month. Where it comes from and where it goes we refer to as your cash flow. This information is important to document in order to make you aware of all of your sources of income, your spending habits and to show where money may be saved. Use the following worksheet to illustrate your cash flow:

Where it Comes From Where It goes
$Annual Amount $Annual Amount
Family Support Family Support
Salary Income Tax
Bonus and Commissions Mortgage or Rent
Freelance Consulting Property Taxes
Dividends Utilities
Interest Auto Maintenance
Rent Commuting/other Transp.
Social Security Insurance
Pensions Automobile
Annuities Homeowner’s or Renter’s
Tax Refunds Life
Other Health

Total Inflow

Child Care
Club Dues
Medical Expenses
Household Misc.
Home Improvements
Magazines, Books
Contributions to Charities

Total Outflow

Total Inflow
Minus Outflow
Surplus or Deficit

Once your net worth and cash flow sheets have been filled out you should have a pretty good idea of your financial inventory. Use this information to find where you can curb our spending habits enough in order to save 10%-15% of your total income.

This is now your budget. Stick to it!

The money you put away will be invested in order to reach your short and long-term financial goals. Where to put this money depends on factors such as time horizon, risk tolerance etc. and will be discussed in subsequent articles.

Remember, if you don’t put money away today, there won’t be any saved for tomorrow.

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