Ways to Manage Your CashFlow

How should I manage my Cash Flow? It's pretty simple; the best way to manage your revenue and expenses is by keeping a monthly budget that can help you understand where you stand financially. I would start immediately considering how to start making your budget. The best way to create an effective budget starting right now is to grab a sheet of paper, and jot down all the ways you make income. That should only take a few minutes. Next you should create a list of all your expenses. Don't worry if you can't think of everything right now, there usually are a lot more expenses than there is income with a monthly budget, and most often we forget about expenses that we pay not so regularly. These can include Insurance where you might pay the bill every 6 months in order to save money.

Once you've created the beginnings of your monthly Budget I would start creating the Layout of the budget. I would start up top and write down the income first and sum up to a Sub Total for Income. Then underneath that I would do the same sort of thing for the Expenses, coming up with a Sub Total for all Expenses. Then you subtract the Sub Total of the Expenses from the Sub Total of the Income and you should have a remaining amount. Ex:

Personal Assistant: $1800
Sub-Total: $1800

Food Expenses: $300
Car Payment: $150
Rent: $750
Electric: $100
Sub Total: $1300

Total Income: $500

If you are lucky enough to have a remaining total as high as the example I used, you are in good shape, although I would continually try to come up with expenses you may have forgotten about. It's possible you forgot to mention that on Friday Nights you like to go out drinking. You should include everything on your list, or it won't be an effective representation of your cash flow. So although you might have a lot to spare, that doesn't mean you should go out and start spending more money, because you might have less than you think, because you may have missed something very important.

Once you think you've included all your expenses and income, I would recommend if you have left over cash, which should always be saved. Also I would suggest created some new designated funds inside your expenses column for "Emergency Funds" or "Savings" so you can make sure you're always saving for the future, which is very important.

Written By John Alexander

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