Planning is the basis of success: how to make your own cashflow table
Having a good overview of your own money is the basis of success, and we don't have to talk about investments.
Having a good overview of your own money is the basis of success, and we don't have to talk about investments. Today we will show you how to improve this a little with the cashflow table. Our Eva created it when she was embarking on her first investments. She'll teach you how to work with her today.
Years ago, I bought an investment apartment and I needed to plan when I would be able to pay the bills for the renovation first. But to do this, I had to calculate how much I was going to send to the bank for a mortgage and how much it simply cost me to live. Thanks to my understanding of cashflow, I found that I can plan everything smartly and quickly. When you renovate an apartment, you also need to rent it quickly.
If you have a good track of when money arrives in your account and when it leaves it, you will be able to plan expenses and investments much more accurately. And not just “for now” or until the next paycheck, but calmly for half a year or a year ahead. When you open This sample tableIt will be clear to you immediately what we are talking about. In the first tab you will find sample cashflow — just let you know what it should look like. In the second tab you will find a clean table in which you can write directly. Save a copy of the document to your disk and start filling in.
Step # 1: add up all the money
The first step is definitely filling in the sum of all the money you have. Write the number in line 4. Add up income on all accounts, but also cashthat you can find in your wallet (casket, piggy bank). This is your starting line, accordingly, the table will begin to count. The ideal is to start on the first day of the month. Perhaps you can think of what to do if there is no beginning of the month? Don't worry about it yet, try to approximate the number or look at the account statement. If that box gives you”Total available at the end of the month” does not work out exactly, on the first day of next month you write down the exact sum of your fortune in line 4 and start again, and this time exactly.
Step # 2: replenish income
To the part Revenue fill in all the money that lands in your account in a given month. Thus, in the November employment income, you will write down the amount that the employer sends you for work in October. If you are in business and have clients, you will add other types of income in the same way. If you have an investment apartment, be sure to fill in the rental income. Feel free to add more lines. Think of everything you get money for. Even if it will be a contribution from parents or a sold jacket on Vinted.
Step # 3: replenish expenses
First, focus on Regular (fixed) expenses. Remember everything you pay regularly — rent, flat rate, but also multi-sport. Line 32 then tells you how much is 100% disappearing from your account each month.
Variable expenses They are a little less predictable and change often. One month you're not going anywhere and saving up for gas or train tickets, another time you're going on a few weekend trips. This is all part of variable expenses. You can try to estimate them and then recalculate each month of spending. For example, using estimates, tracking down every coffee and adding up receipts from purchases would cost me years of my life. If the detailer is your middle name, feel free to add back the variable expenses at the end of the month. Don't forget to add lines if you're paying more per month.
Step # 4: investment
In part Investment It's good to plan how much you can put into securities, for example, or how much you can manage microinvest with us on Investown. I also include the costs associated with an investment apartment. Maybe just the renovation or the purchase of a built-in wardrobe. It includes everything that appreciates over time or that you put off for the future.
Step 5: how much do I have left?
We're almost to the finish line! We are waiting for the last, but the most important part of the table. There will be no more filling, because the table calculates all this on its own. Line 5 shows you total revenue, line 6 then all monthly expenses. It's key Balance sheet shows if and by how much you are in the plus or minus in that particular month. And right under it you can see an estimate of how you will be at the end of the month. Tada!
Step 6: what about the inaccuracies?
Is the end of the month and the amount in your account does not match the estimate in the table? If you do not write down expenses for the crown accurately, you will always discover inaccuracies. When it's small differences, don't worry about it. Are they in the order of thousands? Try to find out where the error occurred. You may have forgotten an expense. Do you ask how to deal with inaccuracies in the table? As for small differences, just write in line 4 at the beginning of the month the sum of what you have combined in cash and in the account. In fact, with the new moon, you start again and accurately.
Planning is the basis of success
A carefully completed cashflow table is the basis of success for any novice investor. Thanks to it, you will always have an overview of what your account will look like at the end of the month, how much you can manage (micro) invest and what else you can indulge in. Now you have it started and all that remains is to return to it regularly and compare it with reality. 🙂