Where's Your Money Going?
Aug 12, 2011 |
Q: Do I need to hire someone to do a cash-flow analysis for me or can I do this myself?
A: It isn't extremely difficult to do your own cash-flow analysis, you just have to make sure that you won't let anything slip and that you record everything correctly. If you don't trust yourself to keep on top of that, then a financial planner might be the best way to go, plus your planner will look at the overall picture and give you recommendations of what to do with the money you have.
A cash-flow analysis is simply cataloging the money that goes into your accounts and the money that goes out of your accounts due to expenses and investments. Sometimes having a financial planner do this work for you will help you figure out better uses to put your money to, especially if you don’t have a flair for picking investments. But there are tools online that will help you do some basic calculations if your money isn’t moving around a whole lot. This article by the Financial Planning Association tells you if you’re in a strong financial situation or not and sets out the steps for building your own cash-flow statement.
A hired financial planner can also help you adjust your cash flow if your priorities change.
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