The key to cash flow is knowing what’s coming in and what’s going out! For many of us, what’s coming in is fairly steady. We’ll take a look at managing cash flow for self-employed, contract or part time income next time.

That leaves us with what’s going out … expenses. The most important piece of information is how much you must have each month to pay for necessities (housing, food, utilities, loans). Add these amounts up and this is the minimum monthly amount required to cover these bills. The next layer of information is knowing how you typically spend discretionary income – how much for what types of expenditures. It can be helpful to set guideline amounts and prioritize them. Add them up and this is another amount of money to bring in to support your lifestyle.

Another layer is saving for longer term items. Future planning is just that, for the future. Saving for years and years in advance may seem to far forward to think about but saving for a fabulous vacation is easier done over time. It can be very motivating to picture yourself on a beach relaxing or waiting in line for the Eiffel Tower with a cafe latte and pain au chocolat.