Most people have the misconception that cash flow isn’t important, but it is important and if you manage your cash flow right then you can end up in a great financial position.
What is cash flow?
Cash flow is the money coming into your account and the money going out of your account. Your salary would be incoming and expenses are outgoings. Bottom line, you want to have more coming in then you have going out.
How to manage your cash flow.
Your personal cash flow is as important as a company’s cash flow and not something to be left to financial institutions. Take ownership of your money and start a budget. By understanding exactly what comes into your account and where the money is going, enables you to be more in control.
Track your spending rand by rand. Don’t make assumptions on what your expenses are. When you go and buy groceries, keep the receipt and write it into your budget. Do the same with all your purchases. You will then have a realistic view of what you are spending your money on.
Be sure to include any credit card or loan repayments. This is money that was not yours in the first place and negatively impacts your cash flow.
Check out our budgeting article for more.
One of the foundations of building wealth is to spend less than you earn. Having a view of your cash flow can tell you if you are on the right path. If you are running on a deficit you are on the back foot when it comes to building wealth and you will need to make urgent adjustments to your expenses.
If you are running into negative cash flow each month and unable to get back on top of your debt repayments, we may be able to assist. By negotiating a reduction in loan repayments, you will have surplus funds each month which will enable you to get back on track.
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