Printer Friendly

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.
COPYRIGHT 1994 Earl G. Graves Publishing Co., Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1994, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:B.E. Money Management Special Section; worksheets to establish money availability
Author:Mack, Gracian
Publication:Black Enterprise
Date:Oct 1, 1994
Words:954
Previous Article:The art of financial mapping.
Next Article:Stocks worth buying now.
Topics:


Related Articles
Working capital woes: planning ahead ensures that money is always in the till.
Getting the cash to flow your way.
10 ways to improve small business cash flow.
Get fiscally fit.
Using annual reports? (Ask B.E.).
Going with the (cash) flow: entrepreneurs can look at these strategies to help the bottom line. (Management Advice).
Letting everyone into the pool. (Cash Management).
Budget for single mom.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters