How to Transition from Budgeting to Cash Flow Management
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- čas přidán 12. 09. 2024
- How to Transition from Budgeting to Cash Flow Management
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Bo, I am so excited that you had Rebie stepping in for Bryan, nice job! I would imagine its not as easy as some might think.. She is my favorite person on the team because she keeps the guys on track and provides some good insight as well.
I appreciate how Bo clarified that he’s not spending aimlessly but is using cash flow management. The key takeaway is that he prioritizes setting aside money for investments, savings, and essential expenses first, and then spends what’s left.
I believe this approach works best when you’ve completed most of your FOO, have an emergency fund in place, cushion in your budget, and feel confident in managing your spending habits.
I budgeted for only a few months, then started cash flow managing, once I had an idea of my monthly spending. I did find budgeting liberating, not restrictive.
80% equities 20% cash. I plan to take advantage of the current market situation as leading indicators predict a bullish S&P 500 by 2025, my only concern is how to properly allocate a large stock/bond portfolio for maximum potential returns.
I don’t see a problem fully invested into stocks as long as you know what you're doing, whereas it's best to consider advisory services
Agreed, investing with the help of an advisor did the trick for me in barely 5 years. I worked hard everyday as a teacher for 32 years and my salary was over 100k, enough to get me fully invested. I'm semi-retired today with about $1m, and only work 7.5 hours weekly.
how to put my money to work has been my daily thought, did my research and most suggestions pointed at the stock market, the thing is i'm an absolute noob at investing... mind sharing info of this professional guiding you please?
Karen Lynne Chess is the licensed advisor I use. Just google the name and you’d find necessary details. To be honest, I almost didn't buy the idea of letting someone handle growing my finance, but so glad I did.
such an eye-opener! curiously inputted Karen Lynne Chess on the web and at once spotted her consulting page, she seems highly professional from her resumé..
I kinda sorta get the idea but is there an explanation anywhere of what “cash flow management”’is?
Budgeting 😂 lol.
I think it's more forward looking and being deliberate about where your money goes instead of tracking the past expenses, traditional budgeting
I think there are probably multiple ways to do it, but for me, I have multiple accounts for different things. I have an intake account where my pay hits from there some money goes into a 'free spend' account, some goes to investments and saving, and I also split fixed and variable expenses. All the cash movement is on automatic transactions and I pad the variable expenses enough that I never have to look at it. When I have an excessive amount of money in that account I just see it and move some to free spend or something else.
It's not like graduating. It's just different ways to approach it. Budgeting is more money efficient. Cash flow management is laxed. Both are OK It's just budgetting has much better results
Im not there yet, but from what I have heard them explain it, I would say budgeting is a negative payment structure and cash flow management is a positive payment structure. You restrict spending to save money and pay off debts, thats budgeting. You already have a set amount going into your retirment and savings and have to figure out what to allocate the rest for, thats cash flow management. At least thats what i got out of it. Hope that helps.
I'd say cash flow management is less I know how much I'm spending on groceries and clothing. Instead I think it's I know how much money I make, I'm going to save this much into retirement, this much into savings, and the rest I can spend without worry because I have everything else covered
I think income level plays a drastic role here. Low wage earners / people who's cost of living is a huge proportion of their income have a far greater need to manage every detail. When you make a lot of money or your fixed expenses are a smaller portion of your income it is a lot less necessary to track things at such a granular level because you have alot more room to manuever.
Personal finance is...personal! Do what works for you! (But make sure it works)
a few months after my husband and I married, and combined finances, we ended up agreeing that he could have X amount of cash each month and I didn’t want to deal with each of those transactions. And it’s there for him to do whatever he wants with it. His “fun” money, basically.
Budgeting once a week makes it a lot easier to track than once a month. Also married, doing it with my wife in those conversations help bring us together on our life goals.
I wasn't familiar with the term "cash flow management," but I guess that's what we've always done. I think it would be much harder if we'd had children.
My husband and I have always done cash flow management and we've never had any money issues. My husband is a good saver but doesn't have the discipline or patience to balance a check book. lol. All he knows is that he spends less than what's left over after investing. Everything else is busy work.
And that's the trick. If your income is great enough such that you don't have to worry about the different between your expenses and planned investing, your discretionary spending doesn't matter much.
So i think cash flow management is the classic "pay yourself first" - fill your 401k / Roth IRA / cash buckets, then you can spend the rest on anything. Good to know your approximate budget first
And that's just it, you can't fill those investment buckets first until you know that you have enough to meet your minimum expenses. So truly it is setting aside enough for your minimum expenses, and then see what is left to invest, and after that see what is left for discretionary spending. The larger income the easier this is.
YNAB is the best budgeting software!
For a little bit longer it is. Actual Budget is soon going to surpass it - for free (or near-free if you want linked bank accounts). Using YNAB now, big fan, but not a fan of the cost.
As someone who works 40-60 hours a week. It is hard to budget. Not knowing how much money I will make in two weeks.
I'm not sure what "management" is happening if you aren't tracking your expenses.
They manage the savings and investments first.
After that's covered, expenses are less impactful.
@@erGothmog - only because they earn well above their expenses. If you can barely make your expenses alone, then you can't earmark 25% for investing, etc.
Women be shopping. 😆
All the issues he has with budgeting rvery dollar does for you.
Biggest problem with Every Dollar is the ignorance over using credit cards for daily spending. YNAB is very similar, but allows for credit card spending (for rewards), but never spending more on CCs than you have in the bank to cover it (so it's not debt spending, it's spending on credit based on money in the bank and will be paid in full).
Video graphic is a bit naughty.
How?
😂 I see it
Your mind wants it that way
Rebie really needs to become more self conscious about the amount of times she says 'like'. Bo sounds articulate, professional and knowledgeable and unfortunately Rebie sounds the opposite mainly due to saying 'like' every fourth word. I am sure that she has the knowledge and ability to converse in an articulate and professional way but language is the tool and she isnt using it to her advantage.
She is representing a different demographic and life stage than what you're looking for. There are a lot of different people in this world. I like her and don't think she needs to change.
This woman talks like a teenager by using the word “like” every 6 seconds.
She is representing a different demographic and life stage than what you're looking for. There are a lot of different people in this world. I like her and don't think she needs to change.
I don't like these people advice
What would you do different?
They offered 2 different approaches. You don't like either? Please share your financial plan so we can learn from you.
@@ConserveMore someone is offended 👀
What is wrong with their advice?