This week in the Roadmap to Financial Success course we are stepping through a cash flow template so each participant can see whether she moved toward or away from her money goals last month. This is such a crucial step to growing your money; your household or family cash flow will guide you to your financial goals because you can easily see if you are moving toward them, with a positive number each month, or away from them, with a negative number each month.
My goal is that this simple routine will be completed each and every month by every woman seeking financial freedom. It’s easy for a year to slip by before we realize that we should have put aside more money to grow, but when you look at your progress on a monthly basis, it is easier to naturally slip those money growing behaviors into your life to accomplish those things that really matter to you. Your daily earning and spending habits just become a part of your life as you live each day when you regularly monitor your progress toward your financial goals.
You will likely find that some months will be positive, while others are negative, especially around year end when you may have extra expenses due to the holidays and property taxes. (I have a special tip for avoiding that holiday spending ouch!) Other events such as major home expenses, car replacements, moves, and federal income taxes, can push you into negative territory for the month. For this reason, I suggest keeping a contingency fund for those unexpected or once-a-year unavoidable expenses, so that you can establish a regular and predictable income and expense stream. This way, you won’t feel defeated in your plan to reach your financial goals.
It’s usually the unexpected that throws us off track, and we all know that unexpected expenses are going to happen; we just don’t know when or how much they will be. Owning that, you can feel prepared and more in control with a contingency fund, and this is what gives you financial peace. A contingency fund isn’t for a European family vacation, but rather, it’s for those completely unavoidable, but non-recurring, expenses that must be paid to stay afloat.
Take some time to calculate cash flow for the last complete month. If you want some hand holding, it’s not too late to jump into the course with us. Either way, embrace this important step on your money journey toward financial freedom; become a financial woman.