Now that you have an overview of your current financial health, it’s time to focus on what you’re doing daily to improve or harm your financial health.

Getting control of your finances would not be complete without understanding your personal cash flow. Cash-flow is a buzzword phrase that refers to money coming into and leaving your life. If you have income and expenses, you have cash-flow. This section will help you determine, manage and improve your cash-flow.

Most people automatically think of “budget” when they hear the word cash-flow.

For most people, budgets don’t work. In fact, they don’t even work for many businesses. You can control your finances without a specific and predetermined budget, and we know how to do it.

Taking control of your cash flow is central to your financial transformation because it allows you to save more. Your ability to save more of what you earn will drive your financial transformation. Our savings are the fuel for investing and achieving our goals. Not keeping track of our income and expenses causes unnecessary stress and upset and prevents us from achieving our goals.

Taking control of your cash flow is not just for great managers. If you are retired and have a steady income, are a young manager on a good salary or a single mother working two part-time jobs, you need to know how much money is coming in and how much is going out. Remember, it’s not how much you make, but how much money you save.

As an example, think of two friends who are about to go on a long trip.

They’re each driving their own car. One of them has a vehicle with a 60-litre petrol tank and the other has a compact with a small 20-litre tank. It would seem obvious which of them will reach their destination without stopping at a gas station. The person with the 60 litre tank has much more resources and won’t have to fill up.

Would you be surprised to find that the person with the small tank will reach their destination quickly and easily, but that the vehicle with the 60 litre tank will arrive late after a long wait at the petrol station? How is that possible? A larger tank provides more fuel, so it should take him further than a vehicle with a small tank. It makes more sense when you learn that the vehicle with the large tank is a Hummer that gets 13 miles per gallon of fuel, and the vehicle with the small tank is a Toyota Prius that gets 51 miles per gallon of fuel.

It’s not how much fuel you have, it’s how efficiently you can conserve, manage and use it. In this case, the Hummer burns through its resources, while the Prius makes efficient use of what it has.

As for your finances, it doesn’t matter how much or how little income you have as long as you use it efficiently. So don’t worry that you can’t achieve your goals if you don’t make a lot of money. You can always achieve your goals if you manage your cash flow effectively.

The first step to taking control of your cash flow is to figure out where you currently stand. So contact one of our advisors and get to work!