Budgeting and Cash Flow
Planning for the future
Effective budgeting and cash flow management are the foundation of a successful financial plan.
We help you develop a savings-focused budget that prioritizes your goals while maintaining flexibility for life’s unexpected events. By managing your liquidity strategically, we ensure you have the resources you need when you need them, without compromising long-term financial growth.
Savings Plan
Each month, you settle down to pay bills. You pay your mortgage lender. You pay the electric company. You pay the trash collector. But do you pay yourself? One of the most basic tenets of sound investing involves the simple habit of “paying yourself first” – in other words, making your first payment of each month a deposit into your savings account.
In the pursuit of growing wealth, sound habits can be your most valuable asset. Develop the habit of “paying yourself first” today. The sooner you begin, the more potential your savings may have to grow.
Budgeting Process
Creating Some Categories
Start by dividing expenses into useful categories. Some possibilities: home, auto, food, household, debt, clothes, pets, entertainment, and charity. Don’t forget savings and investments. It may also be helpful to create subcategories. Housing, for example, can be divided into mortgage, taxes, insurance, utilities, and maintenance.
Following the Money
Go through all the receipts and statements gathered to prepare taxes and get a better understanding of where the money went last year. Track everything. Be as specific as possible, and don’t forget to account for the cost of a latte on the way to the office each day.
Projecting Expenses Forward
Knowing how much was spent per budget category can provide a useful template for projecting future expenses. Go through each category. Are expenses likely to rise in the coming year? If so, by how much? The results of this projection will form the basis of a budget for the coming year.
Determining Expected Income
Add together all sources of income. Make sure to use net income.
Doing the Math
It’s time for the moment of truth. Subtract projected expenses from expected income. If expenses exceed income, it may be necessary to consider changes. Prioritize categories and look to reduce those with the lowest importance until the budget is balanced.
Sticking to It
If it’s not in the budget, don’t spend it. If it’s an emergency, make adjustments elsewhere.
Ready To Start
Put a century of combined experience to work and reach out to our team to help you with your financial future.