What is a Cash Flow Statement?
A personal cash flow statement is a spreadsheet you can use to see where you spend your income over a period of time. This cash flow statement is set up so you can use it to estimate your monthly inflows and outflows, document the actual amounts, and plan your spending for next month. It’s designed as a zero-sum budget where every dollar of income (inflow) is allocated to a specific expense (outflow), so that total inflows equal total outflows. [TOTAL OUTFLOWS = TOTAL INFLOWS] Try not to rely on borrowing to pay for your expenses. Your goal should be to spend less than you make and place a percentage of your income in savings and investments.
Create a Budget! A budget is a written plan of how you will spend your money for a specified time period (usually monthly). This tool can help you manage your future spending in an attempt to keep your expenses aligned with your income and your financial goals.
A budget allows you to see your financial life on paper. You can use the last column of this cash flow statement to plan how you will spend your income next month. Every dollar should be accounted for, whether you spend it or save it.MORE >