Understanding your cash flow is one of the first steps to being financially honest with yourself.  

Cash Flow Management

Your personal cash flow is simply money received and money paid out over a period of time. 

When all of your expenses and commitments are paid is there any money left over? Answering this question may lead to the realisation that: 

1. Yes there is! – Great news as you can save or invest this for a future goal. This is called being cash flow positive. 
2. No there isn’t! – Not so good news as you appear to be living from paycheque to paycheque. This is called being cash flow neutral. How will you save for future goals? 
3. I am actually further in debt or can’t afford to pay my bills! – That’s really bad news unless you have a means of paying the debt off. This is called being cash flow negative. If this continues your cash flow will only get worse. 

Armed with the reality of your cash flow situation you can choose to do something about it or not. Effective cash flow management will assist you to prioritise your spending and allocate your funds to those things that are most important to you. Reduce debt and save for specific goals such as a deposit for a house, a new car, a holiday, a wedding, education, retirement and so on).  

If you manage your finances responsibly you will have peace of mind and be able to: 

• Save for the extras that make life enjoyable.
• Keep debts to a manageable level and pay your loans off sooner.
• Avoid constant money stress.
• Save to invest and build wealth.

Unfortunately for many people the process of developing a spending plan is just too time consuming.  Today’s world is complex with the average person juggling online accounts, savings accounts, personal loans, car loans, lines of credit, fixed mortgages, credit cards, direct debit facilities, Bpay and salary packaging arrangements. With so many ways to get into debt and to spend money it is no wonder that people lose control of their finances. How can we help – Our Process

It is critical that you find out if you are gaining or losing money each month, whether you choose to budget or not. This is relevant to high and low income earners as there is often the temptation to spend more as earnings increase. The development of a spending plan will involve a budget.