Keeping track of your cash flow.

LET'S FACE IT: MORE OFTEN THAN YOU'D LIKE TO admit, you find yourself staring at your wreckage of outgoing checks and incoming bills wondering: "Where did it all go?" No matter how hard you work to make ends meet, you're still having trouble tracking your cash. Well, wonder no more. Here are the tools you need--a monthly budget and a cash-flow worksheet--to put and keep your financial house in order.

MONTHLY HOUSEHOLD BUDGET

MONTH/YEAR _____ SALARY (Monthly) _____ INVESTMENT INCOME (Monthly) _____ OTHER INCOME (Monthly) _____ TOTAL INCOME (Monthly) _____

EXPENSES                     BUDGETED $   %   ACTUAL    %

                             MONTHLY

FOOD
Groceries                      _____      __    ___    ___
Dining Out                     _____      __    ___    ___
HOUSING
Mortgage/Rent                  _____      __    ___    ___
Electricity                    _____      __    ___    ___
Gas/Oil                        _____      __    ___    ___
Taxes                          _____      __    ___    ___
Insurance                      _____      __    ___    ___
Water/Sewer                    _____      __    ___    ___
Telephone                      _____      __    ___    ___
Repairs/Maintenance            _____      __    ___    ___
Child Care/Support             _____      __    ___    ___
Other                          _____      __    ___    ___
CLOTHING
Work Attire                    _____      __    ___    ___
Leisure/Sports                 _____      __    ___    ___
Children's                     _____      __    ___    ___
Laundry/Cleaning               _____      __    ___    ___
TAXES
Federal                        _____      __    ___    ___
State                          _____      __    ___    ___
Local                          _____      __    ___    ___
Social Security                _____      __    ___    ___
Other                          _____      __    ___    ___
DEBTS
Credit Card Payments           _____      __    ___    ___
Loans/Notes                    _____      __    ___    ___
Other                          _____      __    ___    ___
SAVINGS
Emergency Fund                 _____      __    ___    ___
Other                          _____      __    ___    ___
INSURANCE
Medical                        _____      __    ___    ___
Disability                     _____      __    ___    ___
Life                           _____      __    ___    ___
Other                          _____      __    ___    ___
MEDICAL
Doctor/Dentist                 _____      __    ___    ___
Medicine/Drugs                 _____      __    ___    ___
Other                          _____      __    ___    ___
INVESTMENTS
Securities                     _____      __    ___    ___
Real Estate                    _____      __    ___    ___
Retirement Account             _____      __    ___    ___
Education                      _____      __    ___    ___
Other                          _____      __    ___    ___
AUTOMOTIVE
Payment/Leases                 _____      __    ___    ___
Gas/Oil                        _____      __    ___    ___
Insurance                      _____      __    ___    ___
License/Registration           _____      __    ___    ___
Maintenance/Repairs            _____      __    ___    ___
Other                          _____      __    ___    ___
ENTERTAINMENT/RECREATION
Children's Activities          _____      __    ___    ___
Social Activities              _____      __    ___    ___
Vacations/Trips                _____      __    ___    ___
Other                          _____      __    ___    ___
MISCELLANEOUS
Toiletries/Cosmetics           _____      __    ___    ___
Beauty/Barber                  _____      __    ___    ___
Petty Spending Cash            _____      __    ___    ___
Allowances                     _____      __    ___    ___
Gifts (Christmas, etc.)        _____      __    ___    ___
Periodicals/Magazines          _____      __    ___    ___
Dues (Union, Club, Tithes)     _____      __    ___    ___
Other                          _____      __    ___    ___
TOTAL
EXPENSES $                     _____      __    ___    ___
DISCRETIONARY                  _____      __    ___    ___
INCOME $                       _____      __    ___    ___
(Total Income Minus Expenses)

To begin, let's clear up a common misconception. Your monthly budget and your personal cash-flow statement are not the same thing. A budget is a record of anticipated income and planned expenses. Your cash-flow statement is a regularly kept record of actual income and expenditures, designed to keep you abreast of exactly how much money you have at regular intervals in time, usually at the beginning or end of each month. Together, they can give you the information you'll need to make progress toward your financial goals (see "The Art of Financial Mapping," this issue).

The key to using these worksheets is learning to keep a record of every expenditure you make--down to every last newspaper, birthday card and home pizza delivery. Purchases made by check or by debit or credit cards will be easier to track, since they leave a paper trail. However, most of your money "disappears" as a result of unaccounted for cash expenditures, and even the little ones add up. For example, a cup of coffee, bagel and newspaper each business day could run a tab of $50 each month--or $600 a year. Most experts recommend carrying around a small notebook to jot down your expenditures; also, make asking for and filing receipts the rule, not the exception.

The point is you must see where you are before you can plan where you're going. By setting aside a day at the end of each month to document the past month's actual expenses and to set up the budget for the next month, you can see where you can reduce unplanned or unnecessary spending.

Completing the monthly budget accompanying this article (which includes columns for both planned as well as actual expenses) also gives you the information you need to do a cash-flow analysis of your household. All you have to do is transfer the figures representing your actual monthly income and expenses to the cash-flow worksheet to find out how much cash you really have left over at the end of each month. You might even want to keep track of your income and outgo on your computer. There are plenty of easy-to-use personal finance software packages on the market.

YOUR B.E. CASH FLOW WORK SHEET

Month/Year
1. Cash in the Bank
   (Start of the Month)
2. Cash on Hand
   (Start of the Month)
3. Total Cash
   (Add 1 and 2)
4. Salary
   (Before tax, other deductions)
5. Investment
   Income
6. Other Income
7. Total Income
   (Add 4, 5, and 6)
8. Total Cash and
   Income
9. Total Expenses
10. Cash Balance at the
   end of the Month
   (Subtract 9 from 8)*

Tracking this information for a year will show you when you tend to have a surplus of cash, and when you are in danger of having a deficit. Then you can plan your spending accordingly. For example, you can plan to spread your holiday shopping over the spring and summer months instead of exhausting your budget in November; or roll over your savings toward that new 1994 sports coupe to September, when dealerships are offering special deals to make room for their 1995 models.

Or, if you know that you're likely to be short on funds during a certain time of the year, you can arrange in advance to delay credit card payments to the following month, rather than hurt your credit rating by letting payments go past due. Be aware that notifying the credit card company of an anticipated late payment won't let you off the hook for late fee penalties. However, the small display of forethought could be worth a bundle to you in the long run when you consider the value of a good credit rating. Of course, a better, more prudent option would be to double-up your payments in the month preceding the anticipated cash crunch.

Most importantly, you'll be able to more accurately track when you are outright wasting your money. You'll be far less likely to do the impulse buying that destroys most budgets, because your cash-flow statement will keep you regularly posted on your cash position. A string of months in deficit will let you know immediately if you are throwing money away--or worse, living beyond your means.

These are the tried and true tools of wealth-building, of saving and investing more of waht you earn and getting the most for what you spend. The next time you get a raise or bonus (it could happen, you know), you won't have to wonder where it went.