It is necessary to know how much cash you are getting and how much is getting used. This helps you stay out of debt. It helps one organize where to spend money and where not to.
What is a Personal Cash Flow Statement?
A personal cash flow statement is one that measures cash inflows as well as outflows so that you can see your net cash flow. This is for a certain period of time. When looking at cash inflows these usually are salaries, any interest from savings accounts, any dividends from investments, if you have capital gains, etc. Cash outflows are all expenses involved.
What to Include in a Cash Flow Statement Template?
If you need to make a cash flow statement template you can consider the below points:
- Microsoft Excel– Make the template in Microsoft Excel. Over here you can do calculations.
- Heading– You need to have a heading so that it is known what the template is for. For this, it can be “Personal Cash Flow Statement.”
- Income Summary– This can be in the form of a chart. Start off with this heading. Under this, you will have the Total Annual Income. Give this in numbers. The chart will have where your income came from. This will be from salary, commissions or bonus, other, etc. The chart will then have the amount from these. If it is a chart then it is simple to understand it by only viewing it. It will help you understand where the most income is coming in from by simply looking at it.
- Expenses Summary– You will have this heading next. Under this will be the total annual stated in figures. Here you can also have a Chart so that you can understand it by simply viewing it. This will have those things where you spent your money. It will be things like mortgage/rent, federal or medicare, food, car payments, state income tax, disability premiums, clothing, electricity, medical or dental, phone, water, gas, internet, insurance, vehicle tax, garbage, other, etc. You need to include all the places where you spent money. This chart will then be developed having the highest at the top and going in that order till the lowest. A pictorial representation is simpler to understand by only looking at it. You will not be confused by it.
Advantages of the Template:
The advantages of a personal cash flow statement template include the following:
- Let’s one know how much income they get
- Let’s one know clearly where their income is being spent and how much on which things
- Allows one to cut the costs where not needed and save for more important things
- Will let one remain out of debt
The personal cash flow statement template should be made carefully without any mistakes. This is because it is an important document that will help you know if you are remaining in your budget and if you are overspending. It can help you balance out your income.