e grew up with our grandparents always telling us tricks to save money when we were kids. We never forget, even as adults, those words of our grandparents. They are drilled in our mind because of how many times we heard them. Did you ever think to use them in your life? What about when your grandparents would explain that they bought their home or automobile in cash? Did you assume they were confusing the word “loan” for “cash”? Let’s pretend for a minute that when our grandparents said the word cash, it really meant cash. What if they were trying to teach us their “sock drawer” savings method because they knew it worked? Our grandparents were never rich but survived because of their method of savings. Our grandparents made it through times of emergency that we will never know. They lived their whole life managing their cash flow because it led them to a better way of life! Once you realize what they were teaching you, shouldn’t you look into managing your cash flow so you can live like them?
Many people do not understand what the meaning of cash flow is to an individual. Until you know the meaning, you cannot change to live like your grandparents did. An individual’s cash flow is the money coming in their household, and the money going out of their household. The money coming in is a paycheck or income. The money going out is an expense, or what you spend your money on. Cash flow is not the balance of your account, but the actual numbers that come in your bank statement that you ignore each month. If we look at our income and expense, then we are paying attention to the cash flow. The flow of money in and out, which will help us better understand ways to better our lives. The money that we spend, good or bad, does not just disappear out of our account each month. That money was spent, and it was spent by you.
To manage our cash flow, we have to think of the dreaded word “budget”. Hopefully, I did not lose you by saying the word budget. Many fear this word because they believe that having a budge means that they cannot enjoy life. If you think that, then think of the family of eight that seems to do more than your family of four. How do you think that a family twice the size of yours is able to have more money for entertainment? They budget their money. They have a plan to manage their cash flow, and they stick to it. Our grandparents budgeting by finding what money they had to spend, and what money they did not have to spend.
Creating a budget is just the beginning of managing your cash flow. Looking at the income you bring in your household and comparing it to write down expenses you have to pay each month. Most people do not even know how much they spend on revolving bills because they are so into their get by way of life. We have to sit done with our partner and think about where we spend our money each month by writing these revolving bills and normal other expenses out on paper.
There are wonderful tools and forms available for free online to help any type of person begin a monthly budget. Cash flow management is not begun overnight but is a learning process. Over time, you will become a pro like your grandparents and learn great ways to save like they did you do not.
A wonderful speaker on cash flow management is Dave Ramsey. He wrote a book called “The Complete Guide to Money” (I highly recommend you take some time and read it). This is a wonderful learning tool to help teach you how to manage your personal cash flow. For people who want to spend more than the cost of a book, Dave Ramsey has a course called “Financial Peace University” which is a lifetime tool in all areas of money.
From the words of Dave Ramsey, “We need to learn how to not crisis live”. I know through education and time, you can live a better life with less stress and worry using cash flow management. Learning to live better financially will help your personal life and your business growth.