The Cash Flow Blues

I make money, but where does it go?

I often hear this from prospective clients. They have long-term goals like saving for retirement, emergency funds, and investing but never have the cash to accomplish them. Despite earning 6 figures or more. They understand they spend too much but don’t know the steps to fix it.

When I start working with a client in this situation, the first thing I need is to understand the flow of money. Where is it coming from and how much? And where is it going out? The client says, “Oh, I know how much we’re spending on various things!” No, you don’t. Sorry to break it to you. Until you’ve looked at cold, indifferent numbers, you don’t know.

Here is an exercise for you:

1) Income:
Total your income for the last 6 months. If you have irregular or seasonal income (example: commissions, freelance work, small business distributions, etc.) look at one full year. Then find the monthly average by dividing your total by the number of months. Example: 6-month total is $72,000 / 6 = $12,000 per month average income.

Income worksheet Sept 2019v2

2) Expenses:
Go online and download transactions from all of your financial accounts for the last 6 months – checking, savings, credit card, lines of credit. Any account that you use to pay expenses. Then, assign a category to all of the transactions. Example: Rent/Mortgage, groceries, insurance, loan payments, dining out, auto maintenance, utilities, etc., etc. Then total the amount in each category. Finally, find the average amount per month as you did for your income.

Don’t forget to include annual or semi-annual expenses like property taxes or insurance payments. For these annual payments, also find the average monthly payment. Example: Property Taxes $12,000 per year / 12 = $1,000 per month.

expenses worksheet sept 2019

How does it look? Do your expenses equal your income? Are expenses more than income?

Okay, you have the cold, indifferent numbers in front of you. Now what?

Tune in to next month’s blog where I will explain what to do with this information.

If you are ready to start taking control of your cash flow NOW, click the button below to schedule a free one-hour consultation with Savvy Home Office Services to start building habits to take control of your finances.

Screenshot 2019-09-10 10.37.02



I don’t provide financial planning or investment advice. I won’t make any recommendations as to which savings goals are best for you or how much you need to be saving. I won’t provide recommendations as to the purchase or sale of securities. The content of this article is for entertainment purposes only. Cuz’ aren’t you having fun right now?

3 thoughts on “The Cash Flow Blues

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.