Budgeting & Cashflow Management

To effectively manage cashflow, you need to know where your money is going. Once you know what you're spending (and where), you can then modify your behaviour to increase your savings.

A cashflow budget is an essential part of any financial plan. It helps you understand what cash will be available to meet expenses over a certain timeframe, usually 12 months.

It allows you to:

• highlight where you're spending money
• see what proportion of your income is being spent
• identify areas of unnecessary spending
• determine the expected flow of cash
• plan for those months when additional funds are needed

Just as important as creating a cashflow budget is reviewing it – regularly – because external events can always crop up that will not be in line with what you planned for.