Download - Budgeting & Cash Flow
Personal Budgeting & Cash Flow Analysis
Budgeting & Cash Flow
• Cash flow– When you need to
know where money is going
– Analysis
• Budgeting– When you need to
control how much and where money is going
– Planning & Implementation
Budget
Cash flow
Where to begin: Cash Flow
• Determine actual expenditures
Cash Flow
• Determine actual expenditures– Begin with tracking your
expenditures• Receipts, Checks, Bills
Cash Flow
• Determine actual expenditures– Begin with tracking your
expenditures• Receipts, Checks, Bills• Method of Record keeping
required
Cash Flow
• Determine actual expenditures– Begin with tracking your
expenditures• Receipts, Checks, Bills• Method of Record
keeping required• K.I.S.S.
Keep. It. Simple. Stupid.
Cash Flow
• Determine actual expenditures– Use a tool
Cash Flow
Cash Flow
• Determine actual expenditures– Each expenditure should
correspond to a category– Categorize,
subcategorize, sub-subcategorize• Be thorough• Be obsessive• Differentiation allows for
better budgeting• Limit “misc” category!
Cash Flow
https://wwws.mint.com/demoUser.event
Cash Flow
• Don’t Stop! Keep going– Track everything• Including cash
– Make adjustments as you go• Computerized tools make this easy
Budget• Budget is a Spending Plan.• Series of comparisons,
preferences, judging, weighing of importance
• Subjective decisions, influenced by emotion
• Requires honest and frank differentiation between need and want
• Ultimately about delayed gratification
Next Step: Creating a Budget
• Have a Budgeting goal or purpose– Cut spending– Save for specific
item/event– Find comfort zone
for retirement
Budget
• Begin with actual expenditures– rough outline
• Project fixed expenditures– Taxes, utilities, debt
payments, insurance, etc.
• Additional variable expenditures– Everything you can think
of not already noted
Budget
• Project Income– Overtime?– Bonuses?– Other sources
of income
Budget
• Budgeting Savings1. Emergency fund• 3 - 6x monthly income
2. Retirement3. Project fund• Specific goal
4. Play fund• Reward
Budget• Finding places to cut
– Consider everything • few things are truly
uncuttable
– Obvious places• Dining• Clothing• Entertainment• Luxuries
– Look for Red Flags• Spikes in spending• Impulse buying
• Begin with modest goals– Eg. Increments of 1% of
income
Budget
• Monitor Spending Trends– Use a tool
Budget
Review
Revise
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