What is cash flow management?

Cash flow management is more than just a budget. It is a mechanism by which individuals manage the flow of income and expenses to ensure their non-discretionary obligations are met (e.g. bills, living needs), and empower them to understand discretionary spending patterns which ultimately provide a framework aimed to achieve the balance between debt management and wealth accumulation. For this reason, cash flow management is at the core of quality strategic financial advice. 

Ultimately, cash flow management will provide clients with the following outcomes: 

  1. Vision and Goal Setting – Not withstanding that some clients are under more financial stress than others, setting some lifestyle attainment goals is important. Through cash flow management, your clients should start thinking about what it is they want to achieve in life. 
  2. Identify Gaps – what does their current cash flow look like? Where is the money going? 
  3. Create Structure – provide clients with a framework to manage the flow of income to ensure obligations are met. By setting budgets, your clients can track their actual vs. target spending habits. Ultimately over time, this will drive behaviours. 
  4. Create Balance – Life is not just about survival! Good cash flow management looks at setting a balance between non-discretionary obligations and the attainment of lifestyle goals. Goal attainment – Through cash flow management, clients are more likely to create the capacity to achieve their lifestyle and financial goals.

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The information within is general advice only, prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. You should obtain a Product Disclosure Statement relating to products mentioned before making any decisions. © Copyright 2018. The Master Plan Advisory Group Pty Ltd is a Corporate Authorised Representative of Millennium3 Financial Services Pty Ltd ABN 61 094 529 987 AFSL 244252 The information contained on this website is for Australian residents only.

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