How to Design Your Cash Flow Table
Columns
As most people are paid monthly and have some monthly bills, we will use a months for the columns. This provides enough time to create a good average, and short enough to show you any issues. The top row will look like this.
Rows
This is the part that requires you to think about how you want to categorise your finances. Don't worry about getting it right first time, this app makes it easy to change.
Using this app, every transaction will be allocated a row using rules you create. If a rule does not yet exist for your transaction it will be allocated to a row called Unknown.
Consider how you want to categorise all YOUR income and expenses for YOUR cash flow table. If it's too detailed you will get lost in the detail. If it's too high level it will tell you nothing.
It's incredibly useful to organise your categories into a two level hierarchy. This will enable you to see what sub categories (subcategory) make up a top level category (main category)
In this example income and expenses will be categorised in the following way.
- Running the house incurs the following costs: mortgage payments, insurance, and utility bills.
- Food costs are supermarket spending, eating out, and buying random snacks.
- The cash flows (transactions) associated with work are, income, commuting costs, clothes, lunch, coffee.
- Then there is a side hustle with its income and expenses.
Using the first line as an example, main category would be "Household Expenses", and the subcategory below it would be "Mortgage", "Insurance", "Electricity" and "Rates".
In this example I have used a very general easy to understand categories (main category & subcategory). For you to get all the benefits of using a cash flow table it is important that you categorise your cash flow your way, because you're the one who understands your cash flows best.
Data
Now add up each coresponding cash flow (transaction) and place that number in the right place in the table. Don't worry if this seems daunting, we have a solution for you!
Source Data
Bank transactions are basically cash flows, therefore a good source of data for your cash flow table is your bank transactions. These days they are easily downloadable from your bank, no more going through statements typing in information, checking it, and checking it again.
Cash Flow Table Insights
Your cash flow table will provide clarity of your income and expenses.
Here are a few insights, if you look at the cash flow table you can formulate your own insights.
- In 7 months I am $31,337.62 dollars ahead.
- My side hustle income is increasing.
- I saved approximately $500 visiting my parents in January and not paying for food.
- Ditching the snacking would save me approximately $400 every 7 months.
