Cash Management

Cash management is the process in which you analyze and monitor the relationship between your income and expenses to better understand how you are allocating your financial resources relative to achieving your financial goals.

The first step in this process is to understand your current financial position. This can be done by using our Personal Income Statement & Balance Sheet templates on the following pages. With this information, you will be better able to adjust your Personal Income Statement (Budget) to fit your financial objects and goals.

If you don’t know some of the information that is asked for we would encourage you to find out. This can be best achieved by keeping detailed records of your expenses over a meaningful period of time (typically a month or two). Writing everything down in a small notebook works for some while collecting receipts works well for others. Once you have the information compiled into categories (using a spread sheet or budget software) it can be easily entered into your Personal Income Statement. Once this is done, you will be able to identify areas you are allocating resources to that could be redirected to reach more meaningful objectives.

Remember, the objective of effective cash management is to ensure you are making progress toward your short and long term goals. By being disciplined about how you spend your resources, you will better understand where you are currently and be in a better position to make decisions to get you were you want to go as quickly as possible.