The flow of cash
The flow of cash, or formally known as cash flow.
What is it? Cashflow is the money coming in and going out within each period of time. These periods can be weekly, monthly, annually or even daily.
What’s most important is the cashflow balance at the end of each period. If what’s left over in your account after expenses is positive, that shows you have a healthy cash flow and you will have more choices when it comes to what you want to do with that balance. Alternatively, if your balance is negative, then you may need to make some changes to your expenses or even look at ways to increase your income.
I had a thought whilst training the other day, that cashflow is like input vs output when you’re exercising & dieting for performance.
If your input (food) is greater than your output (exercise), then you’re going to start putting on weight and feel sluggish. However, if your output is greater than your input, then you’re going to start losing weight. The greater your output compared to your input, the faster you’ll lose weight and start to feel drained.
The same applies to your cash flow, the goal is to find a happy medium.
The most important thing about cash flow is balance. Too much of your left over balance can lead to too many options without the right direction, but not enough at the end of your pay period can make you feel drained and restrict your options.
How does the cash flow feature work?
The cash flow feature gets its information from the budget. Once you create your budget, your information will automatically transfer & calculate in the cash flow feature. This is why the budget feature asks you to include dates when you were last paid or how frequently you get paid.
You can read more about the budget feature here.
Your cash flow will display all of your incomes & expenses per week. You can toggle between weeks by using the slider at the top. The cashflow will go all the way out to 12 weeks so you can see exactly where you’ll be in the future.
If you need to make adjustments in a week where you’re expecting to receive a work bonus or some extra/one off income, then you edit these changes in your income section. You can do the same for expenses, where you might have a one off bill like a dentist appointment that could hurt your pocket (and your pearly whites).
Life can be a little unpredictable at times, that’s why we’ve made it so you can apply those changes in your cash flow and reduce the impact it has on your financial health.
If you need to make any changes you know will occur consistently each week, then you’re best to make these in the budget feature which will then reflect in the cashflow.
Always check in a couple times a week to make sure you’re on track with your expenses.
If you have any questions about how the cash flow feature works or how to set it up, feel free to contact us here.
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Final words
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Disclaimer
This blog or any other information provided by BudgetBuddie is not financial advice. If you're needing financial advice please get in touch with a licensed financial advisor or professional.
