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<\/figure><\/div>\n\n\n\nI mean, what is so hard about your own personal cash flow? It\u2019s quite literal the cash flow that you might have as an individual.<\/p>\n\n\n\n
So, what am I even asking?<\/span><\/p>\n\n\n\n Well, it\u2019s purposefully left up for interpretation, but first let me define the term \u2018cash flow\u2019 with this definition from Investopedia<\/a> \u2013 \u201cCash flow is the net amount of cash and cash-equivalents being transferred into and out of a business.\u201d<\/p>\n\n\n\n So, if we\u2019re looking for a personal cash flow, then I am asking you what the net amount of cash is being transferred in and out of your own accounts. Or, in a duller language, how is your budget doing?<\/p>\n\n\n\n Well, first of all, if you said any of those then you\u2019re very rude. But second, I have three responses:<\/p>\n\n\n\n Literally all that I am trying to ask you with this question is to find out how you\u2019re doing on your budget. <\/p>\n\n\n\n These are the types of things that you should be able to answer instantly, and if you can\u2019t then Houston, we have a problem.<\/p>\n\n\n\n I\u2019m not saying you need to be like, \u201cAndy, I have spent 560.29 thru the first 22 days of August in the year 2021\u201d.\u00a0 I am saying that you can have a general idea of how things are going.<\/p>\n\n\n\n Maybe I can answer this question a bit better.\u00a0 If you were to ask me this for the current month (August 2021), as it\u2019s the 21st<\/sup> or about 2\/3 the way through the month, I would say \u201ceverything is on track and according to plan, and actually, we\u2019re trending better than I hoped for!\u201d<\/p>\n\n\n\n How do I know this? Well, let\u2019s go through it:<\/p>\n\n\n\n\n\n\n\n First off, I use Doctor Budget<\/a> because it\u2019s simple, forces me to track my expenses (so I actually know all the crap that I buy) and it\u2019s 100% customizable. I will simply input the amount that I intend to spend the last week of the month for the following month. <\/p>\n\n\n\n After using it for a few months, you can really get a good feel for your spending patterns and it almost goes on autopilot in a way. It\u2019s a freaking awesome feeling to be totally honest.<\/p>\n\n\n\n So, now that I have step 1 accomplished of making sure that my budget was created with some intent and thought, I then start racking my brain of major purchases:<\/p>\n\n\n\n By quickly thinking about these things, and really it was just 6 simple thoughts, I was able to identify the fact that we\u2019re going to have a positive cash flow. I mean, maybe it was longer than three seconds, but it was less than 30!<\/p>\n\n\n\n But I only know this because I look at my spending daily. I am always looking at my credit cards, my bank account, everything, just to make sure that I am on top of what is coming in and going out. I find that by using the budget calendar it almost gives me that same \u201chigh\u201d that you get from crossing something off on a to-do list as when I make a payment on something.<\/p>\n\n\n\n I mean, when you agree to pay off a car in 60 months, it\u2019s really a 60-item to-do list, right? That\u2019s the mindset to have. They\u2019re tasks that you\u2019re knocking out month by month and if you can get it done early, then do it! But only if the interest rate is really high\u2026otherwise, invest that cash!<\/p>\n\n\n\n At the end of the day, the thing that I am really trying to say is that you need to stay on top of your finances and make sure that you\u2019re looking at things frequently.<\/p>\n\n\n\n I\u2019ve said it before and I\u2019ll say it again \u2013 I love Doctor Budget. But if you\u2019re 1000% against a budget tool, then maybe start even smaller. You can try to find out your personal cash flow simply by looking at income and expenses, but it is soooo much easier with a budget and a budget calendar <\/p>\n\n\n\n Why not just start with something even bigger picture? Look at your income for the month. Download your most recent credit card statement and your bank statement and just go from there. Look at the numbers at the very end.<\/p>\n\n\n\n If you find that you made $2000, spent $800 on your credit card and then spent another $1000 from your bank on things like a loan, mortgage, rent, etc., then just put it in Excel quickly to see how you\u2019re doing:<\/p>\n\n\n\n Honestly, the math is so simple that you could even put it in just a normal calculator. By doing this you can see that you\u2019re saving $200\/month. Is that good? Well, it depends on a ton of things.<\/p>\n\n\n\n It\u2019s really a question that is 100% personal and that\u2019s why they call it personal finance, but it\u2019s something that you need to be thinking about regularly.<\/p>\n\n\n\n I know that sometimes my personal finance posts can seem preachy, but I really want to just drive the point down that all that needs done is a mindset change. That\u2019s it. It\u2019s all in your head.<\/p>\n\n\n\n I\u2019ve had people tell me that they can\u2019t get out of debt and there\u2019s nothing that they can do about it. BS!<\/p>\n\n\n\n There\u2019s always something that you can do.<\/p>\n\n\n\n It\u2019s all effort. I guarantee that I can take a look at your budget and find ways for you to cut some money. Maybe it\u2019s a gym membership that you\u2019re not using. Maybe it\u2019s that you go out to eat at lunch everyday at work when if you could simply pack.<\/p>\n\n\n\n Do you know what the cost of going out to eat for lunch does to you? A $10 lunch bill, which is pretty dang modest, might only be $7 more than if you packed your lunch for $3, but if you did this just one day every week, you\u2019d have nearly $45K in 30 years.<\/p>\n\n\n\n 45 thousand $$s to pack your lunch\u2026.ONE DAY PER WEEK!<\/a><\/p>\n\n\n\n That\u2019s it. <\/p>\n\n\n\n If that doesn\u2019t motivate you to make a change then honestly nothing well. You can just go ahead now and exit out of this post because I think you\u2019re a lost cause.<\/p>\n\n\n\n Yeah, I said it. If you\u2019re struggling to hit your savings goals and you don\u2019t have that drive to get down and dirty and do literally anything that it takes to hit your goals, then you\u2019re going to perpetually be unhappy with your financial situation.<\/p>\n\n\n\n I don\u2019t mean to be doom and gloom, I really don\u2019t, but until you hit that breaking point you\u2019re never going to change. I can say that because I am speaking with experience as I\u2019ve been in the exact same situation as you.<\/p>\n\n\n\n I\u2019ve made a ton of money mistakes. I\u2019ve maxed out credit cards intentionally, borrowed from a 401k, made the biggest 401k mistake that I could possibly make by not maxing out my company match and even went years of LYING on my budget to make my budget fit my spending rather than my spending fit my budget.<\/p>\n\n\n\n I am saying this from a place of encouragement and I am ALWAYS happy to assist you and look at your budget, walk through Doctor Budget with you and explain how it works, or whatever else that you might need. Just reach out to me at andy@einvestingforbeginners.com<\/a>.<\/p>\n\n\n\n Becoming financially independent doesn\u2019t happen overnight. It\u2019s a snowball effect that takes a while to get going but once it\u2019s going, it\u2019s impossible to stop. The first part of making a snowball is a mindset \u2013 are you ready to go freeze your butt off? If you\u2019re not, you\u2019re going to sit inside and watch Netflix all day.<\/p>\n\n\n\nUse a Simple Cash Flow Tracker<\/strong><\/h2>\n\n\n\n
Why Awareness is Key<\/strong><\/h2>\n\n\n\n
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<\/a><\/figure><\/div>\n\n\n\nYou Need to Do What It Takes<\/strong><\/h2>\n\n\n\n