Controlling the Cash Flow
Money comes and money all too quickly goes. But if you are not keeping track off the flow of your bank account, you are making a pretty simple financial mistake: no cash-flow control. And it is something that will end up costing you dearly.
With Christmas approaching, there is no better time to organise your family’s financial plan and to manage those seasonal expenses. By getting on top of the boring day-to-day transactions that dictate your bank balance, you will find that your monthly budget will start to run itself, leaving you more time and money to spend on life’s fun stuff.
You will:
- Save Money – by not slipping into the red, you will save on bank charges and avoid having to pay high interest rates. Most utility companies also offer prompt-payment discounts.
- Save Time – automatic payments and direct debits mean you will spend less time online banking and shuffling piles of paper bills each month.
- Stop Worrying – by knowing down to the last cent how much you have to spend each month, it will help you match your spending to your budget, leading to fewer sleepless nights stressing about the state of your finances.
- Start Saving – a financial roadmap will help you navigate a long-term savings plan.
Five Easy Stages to Managing Your Cash Flow
1. Start Your Plan
set aside a quiet half-hour, grab a pen and paper and write down what you have coming in every month and what you need to pay out.
2. Look Ahead
plan for a whole year. Include every essential utility and bill: rent/mortgage, water and electricity, rates, insurance, school fees, work-travel/car costs etc.
3. Bank Clever
set up different bank accounts: rent/mortgage, bills, savings and your everyday living expenses. After you are paid each month, move your funds into your different accounts, and leave the money there.
4. Direct Debits
ensure all your essential bills are paid using automatic payments. Big bills, such as insurance, can be spread throughout the year to ease the pain. By automatically moving your money to your different accounts at the start of the month, you will never have to worry about missing payments again.
5. Put it on the House
if you have personal loans, talk to your trusted mortgage broker about consolidating them onto your home loan. Bank mortgage rates are very low, and are likely to remain that way for a while. Not only will you streamline your monthly cash flow, you will save money too.
By clearing the decks of all your essential bills each month, you will know exactly what you have to spend on day-to-day living expenses, the small luxuries that make the daily grind less grinding, and the occasional mall-splurge on your plastic.
A fear of the financial future is really just a fear of the unknown. By defining your budget and getting to grips with your cash flow, you will be able to look forward to a brighter and more prosperous year.
Frequently Asked Questions
What is Cash-Flow Control?
Cash-flow control refers to the practice of tracking the inflow and outflow of money in your bank account. It helps you avoid financial mistakes and enables you to manage your monthly budget effectively.
How can I start managing my cash flow?
Set aside a quiet half-hour to write down your monthly income and essential expenses. Plan for a whole year and include every essential utility and bill.
What are the benefits of managing my cash flow?
Managing your cash flow can help you save money by avoiding bank charges and high-interest rates. It also saves time as you can set up automatic payments and direct debits, and reduces stress by helping you match your spending to your budget.
How can I organize my bank accounts for better cash flow management?
Setting up different bank accounts for rent/mortgage, bills, savings, and everyday living expenses is recommended. After you get paid each month, move your funds into these different accounts.
What is the role of direct debits in cash flow management?
Direct debits ensure that all your essential bills are paid automatically. This helps you avoid missing payments and keeps your finances in order.
Can I consolidate my personal loans onto my home loan?
Yes, talking to your trusted mortgage broker about consolidating personal loans onto your home loan can streamline your monthly cash flow and potentially save you money.
Ready to take control of your finances? Contact Zippy Financial today for expert guidance and unlock a world of better financial choices.
Phone: 1300 855 022
Zippy Financial is an award-winning mortgage brokerage specialising in home loans, property investment, commercial lending, and vehicle & asset finance. Whether you are looking to buy your first home, refinance or build your property investment portfolio, the team at Zippy Financial can help find and secure the right loan for you and your business.
About the Author:
Louisa Sanghera is an award-winning mortgage broker and Director at Zippy Financial. Louisa founded Zippy Financial with the goal of helping clients grow their wealth through smart property and business financing. Louisa utilises her expert financial knowledge, vision for exceptional customer service and passion for property to help her clients achieve their lifestyle and financial goals. Louisa is an experienced speaker, financial commentator, mortgage broker industry representative and small business advocate.
Connect with Louisa on Linkedin.
Louisa Sanghera is a Credit Representative (437236) of Mortgage Specialists Pty Ltd (Australian Credit Licence No. 387025).
Disclaimer: This article contains information that is general in nature. It does not take into account the objectives, financial situation or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This article is not to be used in place of professional advice, whether business, health or financial.
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