Cash Flow

While the net worth statement is a great way of assessing your financial well being, it captures only a frame of your financial position at one time.

Unlike your net worth statement, the cash flow statement tracks your income/expense on a regular basis. That is like comparing the features of a picture camera and video camera.

And because you are recording all your transactions, coming in or going out, this makes your cash flow statement dynamic, allowing you to review your financial route from time to time.

Your Cash Flow Excel Work Sheet Pro

Please download this copy of Cash Flow Excel Work Sheet Pro. You will need Microsoft Excel to open this file.

This is a cash flow statement, similar to what I am using to keep record of my own income/expense on both daily and monthly basis. The cash flow work sheet is made to track your money’s flow in the right sequence.

Notice that the figures are already set to 0.00 (already assuming they are all with “$” sign added in front).

Using this statement will be extremely easy. Since the coordinates of the work sheet is already programmed for you, you just need to record your own figures on a daily basis until they add up automatically at the end of the month.

Upon opening this file, there are two sheets, named “Daily” and “Monthly”. Review the “Daily” sheet first. This is required of you to update daily.

Warning! On the “Daily” sheet, do not edit any columns in the rows highlighted in yellow.

Starting from the top, fill in the current month. There are two pages in the “Daily” sheet and the columns start from 1 to 31. These numbers assume the dates of the month. Of course, there can only be a maximum of 31 days in a month so you have all 31 columns to fill up.

First, let us review the Income statement. Note down all the money that you make everyday, if there are any. For example, if you receive your paycheck from your employer on the 28^th of the month, write 2000 (or whatever the income is) in the Salary column under the 28^th day. If you are a salesperson, your income falls under commissions and if you are a landlord, your income is in the rental column.

When you enter the figure, notice that the total will change immediately to calculate the total income you have made on that day itself.

Secondly, let us review the Expense statement. Again, record whatever expenses you make everyday and put them in the right categories. For instance, if you have paid your phone bills, jolt down 100 (or whatever the amount is) under the phone/hand phone column. Ate pizza? There is your $40 in the Food & Drink column.

Once you have recorded everything until the end of the month, see your second work sheet, namely the “Monthly” sheet.

There is nothing for you to edit or keep record of here, because as I have mentioned earlier, the calculations are all automated. What you have been recording for the last month is all summed up here in this page.

If you have been spending $300.00 on food for the whole month, for example, it will show up here as $300.00 in the Food & Drink column.

Notice that your income and expenses are now totaled up. And when you see your cash flow, it is:

Cash Flow = Total Income – Total Expenses

That is all to it. If your cash flow is zero, too little, or negative, again you are just getting ready for certain financial disaster.

But then, if your cash flow is positive and in good shape, you are good to go!