The New Year is here, so it is a good time to start thinking of cash flow. Why now? November starts the holiday season with spending that often leaves us wondering in January, when we get the Credit Card bill, where did all my money go? So, follow a few steps to help answer your own question.
Start a spending plan now. You can pull Credit Card statements for the months of September, October and November to get an average of what your usual spending is. If you would like an easy way to track expenses, lets us know and we'll send you an excel spreadsheet that will help breakdown your spending and categories. The key to being consistent about a spending plan is finding a resource that works for you. Just ask, I have a lot of resources in this area.
Let’s talk cash flow. What exactly is cash flow? Cash flow is basically your money coming in minus your monthly outflows to determine your net discretionary income. According to a statistic cited by BBC news, the cost of living for Americans has risen by 6.2% over the last year1 - the highest rise in three decades. What that means for you, is it is important to know where you are spending your money to make sure, over time, you are still able to meet your goals with the financial plan you have set in place.
Looking at your spending plan accomplishes an added bonus. By looking at your credit card spending and amounts coming out of your accounts, you are making sure that spending is being done by you and that no fraudulent charges are taking place. Often times, someone trying to commit fraud, will start with small charges on an account or credit card, that can easily be overlooked. The charge will then jump to a large amount and will draw your attention. This can be avoided by maintaining oversight of your monthly charges and disputing any charges you are not familiar with on your account.
Lastly, don’t let those subscriptions get away from you. We have all been known to add a subscription on to our account that we may forget about a month or two down the road. By reviewing your accounts on a monthly basis, you keep a firm hold on the subscriptions you are really needing. I myself have been known to blow this tip. I once paid for double pest control service on my home for 6 months because of an overlap in charges from two different companies. Had I been paying attention to my statements; this could have been avoided.
If creating a spending plan and staying accountable to it is something you need help with, let us know. We are happy to be your accountability partner to help you meet those financial goals in the New Year.
If you found this article useful, you might like the following blog posts:
Military Finances 101: What's the Deal with I-Bonds?
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by C.L. Sheldon & Company, LLC ), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. C.L. Sheldon & Company, LLC does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to C.L. Sheldon & Company, LLC website or incorporated herein, and C.L. Sheldon & Company, LLC takes no responsibility therefore. All such information is provided solely for convenience, educational, and informational purposes only and all users thereof should be guided accordingly. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from C.L. Sheldon & Company, LLC . To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. C.L. Sheldon & Company, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the C.L. Sheldon & Company, LLC ’s current written disclosure statement discussing our advisory services and fees is available for review upon request. DISCLAIMER OF TAX ADVICE: Any discussion contained herein cannot be considered to be tax advice. Actual tax advice would require a detailed and careful analysis of the facts and applicable law, which we expect would be time consuming and costly. We have not made and have not been asked to make that type of analysis in connection with any advice given in this blog post. As a result, we are required to advise you that any Federal tax advice rendered in this blog is not intended or written to be used and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS. In the event you would like us to perform the type of analysis that is necessary for us to provide an opinion, that does not require the above disclaimer, as always, please feel free to contact us.