When I talk about money management and cash flow with clients, I love using the metaphor of a road trip.
So let’s imagine that you are embarking on a long road trip to your favorite beach. What’s the first thing that you do before you hit the road?
Most of us ask ourselves a few important questions: How would I get there? What items do I need to pack? Which roads and highways do I need to take?
Without asking these questions, you might be surrendering yourself to the trip from hell. You know, the one, right? Where you end up driving around in circles, possibly for hours and hours, wasting gas, wasting time, your frustration mounting. No. Fun.
Just like taking a road trip, you can’t embark on your own personal financial journey until you have asked yourself a few key questions:
- Am I stressed out and worried month after month?
- Am I wondering how I am going to manage to pay all my bills each month?
- Can I afford to buy the things that I need?
- How can I expect to retire if I am spending 100% of my income?
If even asking yourself these questions is stressing you out, then you may need help in getting on the road to financial success.
Asking Cash Flow Questions
After 34 years of working in the world of personal finance, one thing I know for sure is that once you have a solid system in place, you can get yourself to a place where you are not only saving money for the little things, but for your future retirement dreams.
I can proudly say that I have mastered a simple and easy-to-use system that will help you ask the right questions about your ongoing expenses. Ready to get on the road to financial freedom? Let’s go!
Where the Rubber Hits the Road
Here are 5 questions that you need to ask yourself as we embark on this journey:
1. What is my cash flow each month?
Cash flow planning, also known as budgeting, is essential to understanding how much money you have to work with for building your plan. The ability to know exactly how much money you have coming in, to the penny, on a monthly basis versus how much money you have to pay out on a monthly basis is crucial in helping you understand how to build out your plan’s annual projection.
Cash flow planning or budgeting may also include detailing expenses that come up during the year that don’t normally come up monthly. Monthly planning helps us effortlessly build an annual projection which you will then have access to at your fingertips.
How do you keep on top of it? I like to use an excel spreadsheet that I monitor on a weekly basis (which I have been doing for years and it works like a charm!). This helps you keep a running total that will match up to your monthly bank balance. Easy. Peasy.
2. Why is it important to plan and manage your cash flow?
Simply put: if you don’t have a detailed map of how much money is coming in versus how much money is going out, then you will never know if you have enough to pay for all the things you need. Period.
The number one reason women get into trouble with debt, saving for the future, or even just being able to make ends meet, can be laid at the feet of not having a solid cash flow plan to follow. Not having a solid handle on your cash flow can cause a lot of fear, anxiety, and helplessness. By having a plan in place, you can leave those feelings behind and be left with a sense of empowerment, knowledge, and peace of mind. It will give you the freedom to open yourself up to the world to do the things you have always wanted.
3. Who is cash flow planning important for?
You and everyone that touches your world. It doesn’t matter how much money you make or how many bills you have to pay, everyone needs to have a cash flow plan whether you are single, married, divorced, have kids, or don’t have kids.
4. When do you start cash flow planning?
Now! It’s simply a matter of establishing where you are presently, getting it down in writing, and building it out from the ground up. The sooner you start, the sooner you will be on your way to feeling empowered.
5. Where do you start?
At your kitchen table! The first step is to take an hour out of your busy day and sit somewhere where you won’t be interrupted. Then you can ask yourself these questions:
- What are your financial goals?
- What financial goals would you like to accomplish within the next year or two?
- Do you want to pay down debt, or save for a down payment on a home?
- Are you itching to get on a plane and take a much-needed vacation?
- Do you want to start a regular savings plan or are your plans more modest? (For example, do you just want to buy a new couch?)
Cash Flow clarity creates peace of mind
Once you have asked yourself these questions, you and I can sit down and build a plan that will work for you. Having a budget or a cash flow plan will give you peace of mind when it comes to all of your financial matters, and the best part is that we can build it together.
The peace of mind that develops from this will have a ripple effect on your entire life and provide you with the freedom to focus on other things that are also important in your life.
If that peace of mind sounds like the right kind of road trip for you, I’m inviting you to book a clarity call with me right here, and we can get started on your money management planning right away.
I can’t wait to embark on this journey with you, so book a clarity call now.
