How do you manage your personal cash flow?

Dave Cain | April 12th, 2012

There’s no such thing as a free lunch… but a little planning ahead can make it a lot cheaper.

Let’s say you go out for lunch, on average, twice a week. At $8 per meal, you’ll spend more than $800 in one year on those lunches. And if you add in a weekly dinner out ($20), you’ll spend upwards $1,800 per year in restaurants. These little indulgences – fast food here, a sit down dinner there – add up and wreak havoc on your checkbook – and possibly your credit.

As CPAs, we talk a lot about the need to set business budgets and manage your company’s cash flow; but we’re also concerned about the finances of another entity; let’s call it You, Inc.

So, how is the cash flow of You, Inc.? You know what’s coming in, but do you know what’s going out? Go through your checkbook or you credit card statements from the last few months and track where your money went. You might be surprised by the results.

Cut Expenses

Once you understand your spending habits, develop a plan to make improvements. Making small changes to your everyday purchasing habits could have a big impact.

  • Pay for cable, but don’t have time to watch TV? You might find that everything you care to see is available online for free. That could put $40/month back in your pocket.
  • Who provides your utilities? Do you have other options? Most of us are so used to writing a check to our local utility company every moth that we might not know that a competitor entered the area. Check on your options; even if you only save $5/month, that’s $60/year.
  • Do you really need to go there? As gas prices keep creeping up, many business owners are looking for ways to economize on transportation costs. We ask our employees to carpool and limit in-person meetings unless necessary. Applying those same principals to your own driving could save you a few gallons of gas per week.

As we come out of this recession, we’ve all gotten a bit better at cutting costs. We join the library queue rather than rushing out to buy the newest best seller. We pack our lunches and catch up with our coworkers over $1 PB&Js rather than $8 burgers.

How does You, Inc. balance the budget? What bright ideas do you use to manage your personal cash flow?

Contact our Ohio Accounting Professionals

If you’re struggling to balance the books for You, Inc. or Your Company, Inc., it might be time to consult a professional.  Contact Rea & Associates for assistance in evaluating your cash flow situation and creating a plan for improvement.  Our Ohio accounting team will review your books and develop a plan to improve your cash flow to keep You, Inc. in the black.

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