Becoming a great cash flow manager is the key to achieving some of the most important goals in personal finance. Eliminating debt, creating an emergency fund, and retiring comfortably all rely on one thing - your ability to effectively manage your income and spending. To that end, open the document entitled 'Cash Flow Startup' that you received via email or download it now.

Once you open this spreadsheet, notice that there are four worksheets - income, bills, occasions, and weekly spending. You will need to complete each of them so we can create your initial cash flow forecast for the upcoming year. While most of this is intuitive, there are a few things to keep in mind as you work through this:

  • Dates. Be sure to use the next date that a cash flow will transact in your bank account.  As an example, let's say you have a bill that's due on May 15th, but you pay it out of your bank's web bill payment service on the 12th.  Enter 5/12/20YY as your date.
  • Descriptions. Give your cash flow item a name, but never use account numbers or other sensitive information in your description.
  • Amounts. While most of your cash flows will be for the same amount for each payment or deposit, others will vary. For variable cash flow amounts, record the highest amount you can remember to err on the high side.
  • Frequencies. All of the most common frequencies are available from the drop down menu. Click the down arrow to see the list of options.

The 'Income' and 'Bills' worksheets are pretty straightforward. What you may not have done much planning around are your occasional and weekly spending so let's introduce each of these types of spending.

Occasions. We don't do monthly cash flow planning because it is destined for failure. The reason most monthly budgets don't work is due in large part to occasional expenses including birthdays, anniversaries, holidays, vacations, and that little thing called Christmas. By listing your occasional expenses - giving them dates, names, and amounts - we can plan for them a full year ahead of time, resulting in guilt-free and hangover-free spending.

Weekly Spending. The most important aspect of your spending that you can quickly and easily get under control are your 'walking around expenses'. This includes gas, groceries, household goods, dining out, entertainment, and the like. These expenses are nearly always greater than your mortgage or rent payment and setting a budget with this is critical to your success. For now, list out your best guesstimate for these items, and we'll fine tune this amount in the coming weeks and months.

When you're finished working through your 'Cash Flow Startup' spreadsheet, tell us you've finished via email and we'll get to work. Once we've received your spreadsheet, we'll follow-up with you in 2-3 business days when your cash flow forecast is ready to be reviewed. And, if you need any help along the way, simply pick-up the phone or pound out an email and we'll answer any questions you have.