As a planner working with people in their 30’s and 40’s, I spend a lot of time planning for investments, taxes, and risk management, but today I’m emphasizing the importance of cash flow planning.
Cash flow planning is about knowing your income sources and sticking to a spending plan so that you’re able to save! This is not an official definition but one that I use with clients. If the goal is to go on a trip, buy a car, save for a down payment, or start putting money in the college fund, PLAN FOR IT! The savings does not need to start today, but you can determine timing based on your income sources: the next paycheck, the next RSU vest, or the first check from a side hustle.
Money is a resource. It helps us get the things we need and want.
When you know these three things:
- when money is coming in,
- where your money is going, and
- what your money is doing for you, then,
You can live the life you want!
Forecasting your cash flow helps you see the future. You can make better decisions and experience what makes your life yours.
Remember, control what you can control. With that in mind, I like to share tips on spending. Here’s a short list of things that do matter when you are trying to extract more from your cash flow:
- Review and cancel subscriptions (we’ve heard this a million times but it’s true!)
- Discounts from credit card offers
- Cash back apps
- Returns (return anything with tags that you haven’t worn in the last month!)
- Eat out 3-4 times per week instead of 6-7.
- Make coffee at home
If these efforts save $100 per week, you just found $5200 to go toward that trip, car, down payment, or 529 plan! You might even be able to start saving automatically.
If you don’t look at the details, I encourage you to start now.
If you don’t look at the details, you don’t know where your money is going.
If you don’t look at the details, you can’t make the best decisions about your money.
Want more money tips? Watch Where to Stash Your Extra Cash!
Kelly Luethje, CFP®, is Founder of Willow Planning Group, LLC. She provides financial education and guidance to help you live life on your terms. Kelly can usually be found on a mountain or by a lake working virtually with clients across the country across the country.
