Tips for Cash Flow Planning

These are all tips that have worked for me; if you have been frustrated with budgeting try some of these ideas.

1.) Use a computer. They are good for you. If you do it in excel you can make it calculate your total as you go. Not only that, if you forget something you can just insert a row instead of erasing everything like you would on a sheet of paper.

2.) Budget for upcoming expenses. If you know something is coming up a few months from now, start budgeting now. It makes things so much easier when it comes time to pay whenever that something comes.

3.) Do your budget monthly. Each month changes. I am single with a basically simple lifestyle and still things change for me on a monthly basis. You are not going to come down from the mountain with the stone tablet budget, you have to continue to tweak and change things depending on what life throws at you.

4.) Start your EMERGENCY FUND. I don't think anyone will argue with me that life throws curve balls. Why would we not plan for this? This is the FIRST thing recommend you to do, it is SO important. Save up $1,000 and set it aside. Then attack your debt. (See Attack that Debt) After that is completed I suggest you set aside 3-6 months income as your emergency fund. (See Emergency Fund)

5.) Keep copies of old budgets. I like looking back on things from a year or so ago and see how far God has brought me in life. Not only would it be neat to see this in our cash flow planning, it is also a good reference tool.

6.) Use envelopes to hedge overspending. If you plan for $200 for groceries one month, just put $200 in an envelope and have all your money come out of there. Dunn & Bradstreet did a study that says in our psychology we spend less money when we use cash. It is a fact and we can argue but because debit/credit cards are so convenient we end up spending more. If you set aside a few envelopes a month: food, groceries, fun money, etc. it will aid in your effort to not overspend.

Side Note: My friend Dean has a "five pocket wallet" that he uses to set aside his cash for each category, rather than having five envelopes . This idea intrigues me and I think I would like to try that in the near future.

7.) Do NOT turn to debt. If you can't fit everything into your budget that you want/need to spend money on do NOT turn to debt. You need to cut things out of your life, debt cannot be an option anymore.

8.) People with irregular income still have to budget. You do not have a round number each month and to planning for your budget will look a little different. You need to prioritize your spending. Rank your expenses. 1.) Food 2.) House 3.) Transportation 4.) Basic Utilities 5.) Clothing from there rank what you deem most important then next importance. It is a skill and will take time to develop.