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Getting through the Month

Tracking when your money comes in and goes out can help you understand if you’ll have enough each week or month.

Making a cash flow budget

A cash flow budget projects what money you expect to come in and how much you think you’ll spend each week and when you expect the expenses to occur.

It’s different from a regular budget because it breaks your monthly budget down week by week. It accounts for when money and other financial resources are expected and when they must be used on needs, wants, and obligations.

The first step in making a cash flow budget is tracking your income and expenses.

Ideally, you should do this for an entire month.

Analyzing your cash flow

A cash flow budget can help you identify where you’re falling short each week.

It can help you figure out if you have the financial resources on hand to cover the most important expenses—so you don’t fall short covering the rent, for example.

A cash flow budget can also help you target areas where you can cut back or postpone expenses.

For people who have irregular, seasonal, or one-time income, a cash flow budget is even more important.

It can help you plan ways to spread the income you receive over future weeks or months when you don’t have money coming in.

Take a look at your total income and benefits and your total expenses for each week.

Do you have enough to cover all of your expenses each week?

Are there things you can adjust or postpone so you have enough to cover your needs each week?

There are expenses, such as rent and your car payment, which you cannot easily reduce. These are commonly called fixed expenses. Cutting back on these expenses requires major changes, such as moving or selling your car.

Sometimes you can work with your landlord or lender to adjust when these expenses are due, which can improve your cash flow.

For instance, can you pay your rent on the fifth of the month or even split the payment into two smaller ones, due on the first and fifteenth of the month?

Your cash flow budget is about setting targets for how and when you will spend your income going forward.

It’s important to be realistic when you set targets and focus on the things you have control to change.

Creating a cash flow budget

A cash flow budget is all about tracking the timing of your income and expenses to make sure you have enough from week to week.

Before you can build a cash flow budget, you will need to track your income, resources, and expenses for at least one month.

What to do

Enter your beginning balance for the week.

Add all of the income and benefits you receive that week.

Subtract all of your expenses for that week. Include the money you spend on everyday expenses, bills, and savings.

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