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Personal Cash Flow Management

What is Personal Cash Flow Management?

When it comes to your personal cash flow, Drucker was right. “If you can’t measure it, you can’t manage it.”

A good personal cash flow management plan starts with a wireframe to organize your personal budget.

How Can You Improve Your Cash Flow?

There are two types of personal cash flow you want to track: positive and negative. Positive cash flow covers all expenses while negative cash flow gets you into debt. The idea of a personal cash flow management system is to see where your exact cash flow lies and adjust accordingly. And, of course, the ultimate goal is to have a positive cash flow.

Start With a Wireframe to Uncover Where Your Money is Going

Below is a basic cash flow management wireframe. Use this as a template to create your own. Keep in mind that no one management plan will be the same, as no one person spends and earns the exact same amount of money. Yours most likely will be different.

If it is financial independence you seek, make sure your model includes savings as if it were an expense. Savings is an obligation to yourself and your future.



Income is the base of a Personal Cash Flow Management Plan. List all forms of income.


Salary is a set total amount to be paid to the employee over the course a year. Employees receive paycheck every week/bi-weekly/or monthly. The amount does not change if the worked hours increase or decrease.


Hourly is a set amount the employee is paid per hour of work. Employees receive a paycheck every week/bi-weekly/or monthly. The amount will fluctuate depending on the amount of hours worked and if the place of employment pays overtime (hours worked over a 40 hour work week).


A person is paid on a contractual basis with a company and is paid based on the contract decided between the contractor and company. Self-employed workers receive a 1099 for taxes, not a W-2.

Bonuses and Investments

Bonuses are at the discretion of the employer. Prudent cash flow management doesn’t include bonuses because they are not guaranteed. Investments may or may not provide immediate income. Depending on the investment whether structured as an equity or fixed income will determine how likely you can rely on the income for your cash flow management.



  • Home Owners Association Dues
  • Rental Insurance
  • Home Owners Insurance

Fixed Expenses

  • Utilities
  • Gas
  • Electric
  • Water/Trash/Sewer
  • Cable/Internet/Phone
  • Cell Phone
  • Credit Cards
  • Car Expenses
  • Maintenance
  • Gas

Extra Expenses

  • Grocery (Food)
  • Clothes/Shoes/Hygiene
  • Extra for Home Expenses


  • Savings Account. Speak with employer; some saving plans can pull from paycheck before taxes. That means less of your paycheck is taxable.
  • Create an Emergency Fund. It should be at least 6 months of expenses. Emergencies can happen and drain a well-established savings account

Taxes (No explanation needed)

Fun Cash

  • Out with friends
  • Movies
  • Vacations
  • Etc.

In the End, You'll Know What Needs Tweaking

When creating a cash flow management plan, don’t be discouraged if it starts in the negative as evidenced by your wireframe.

The key is to understand how you are spending your money and determine what is essential, and what is luxury. Figure out which expenditures create happiness for you and which are adding more stress in your life.

Once everything is on paper, it is easy to see where the budget needs to be tweaked and adjustments made.

There are many useful programs out there to help you be diligent on your spending, however, working with a financial planner will allow you to explore where improvements and changes can and should be made. You can create alerts on programs and send to your cell phone when you’ve maxed out on Starbuck’s or other luxury goods for the month, for example. If you don’t have the discipline to stick to the budget, make sure you take advantage of these tools or work with a financial planner that can keep you focused on your plan.

A few helpful tips to improve and maximize cash flow:

  1. Keep your credit rating strong! Having a good credit score will keep your interest rates down and help your cash flow tremendously. Pay your bills on time!
  2. When buying or refinancing a home, shop around for the best interest rates and terms. There are many lending options out there and depending on your credit score and financial situation finding the best lender for your purchase will be time well spent.
  3. Be sure to revisit your insurance needs at least every other year. Life circumstances change and you may be under or over insured. If you are over insured scale back and put those dollars into savings.
  4. If your employer provides a 401k or other type of retirement savings plans take advantage of them! These funds won’t be part of your immediate use, but you will need them in the future.
  5. I also encourage taking advantage of a stock purchase plan. When you save in employer sponsored plans, you learn to live on the difference. Setting this money aside will benefit you later.
  6. Manage food and dining when going out… happy hour is a great time to go out with friends. You can still have drinks, but at half the price, and most restaurants have a happy hour food menu.
  7. Stay home or plan a hike with a friend. Spending time with friends doesn’t always mean you have to spend money. Going on a hike is a good way to hang out, work out, and save money.
  8. Vacations don’t have to break the bank, think about a “staycation” and take advantage of local site seeing and the fun spots you didn’t even know your own city had to offer.

Can You Use Some Personalized Help?

Now that you understand some of the basics of personal cash flow management, how about schedule some time with us to see how it could apply to your own situation?

We offer a FREE, NO-OBLIGATION 15 MINUTE CHAT to discuss your situation. You'll learn how we are helping clients manage their own finances and investments and how we can help you achieve the lifestyle you dream of by creating a personal financial roadmap.

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