Everyone, rich or poor, needs to know where their money is coming from and where it is going. A personal cash flow statement will track how much you have left at the end of the day. It is not complicated to do, you only need to know how to add and subtract to make your own Cash Flow Statement.
1. List all inflows in a period (usually one month or one year): salary, dividends, interest, loans payable to you, alimony, child-support, gifts, bonuses, etc. If you are doing a monthly statement, include 1/12 of any annual income. Add them up.
2. List all expenses paid in the period. Include any cash taken from an ATM. If you are doing a monthly statement, add 1/12 of any annual expense like a car registration. Add them up.
3. Subtract the expenses from the income.
If you have a positive number then you are living within your means and can save the extra money for a rainy day.
"Remember your dreams and fight for them. You must know what you want from life." - Paul Coelho
"Failing to plan is planning to fail." - Alan Lakein Lakein
"Never underestimate the power of dreams and the influence of the human spirit." - Wilma Rudolph
"Before beginning, plan carefully." - Marcus Cicero