Cashflow Tips Every 20-Something Must Know!

Cashflow as the name suggests, is the movement of cash flowing in and flowing out. The idea is simple. To become wealthy, you want to have more cash flowing in than cash flowing out. But how many of us actually track where our cash is flowing? Tracking your cashflow can make a huge difference in your spending habits and your personal wealth. If you haven’t started, it’s definitely not too late! Personally, I started tracking my cashflow during my polytechnic days and that has made a world of a difference for me in terms of networth growth.

Have you ever looked into your wallet mid-week and wonder where all your cash has been spent on? You’re suddenly left with that little bit of allowance that you have to ration over the next few days. I constantly found myself in that predicament in the past but I gradually took some steps to help improve the situation so I was able to spend without worrying, have all my needs met, and watch my networth grow every month. Did I have to take drastic measures? Definitely not. I didn’t feel like anything changed much, but I was definitely happier every month as I track my networth on a monthly basis.


What Made All The Difference For Me?

Average Cash Outflow

If I Don’t Need It, Keep It

Track And Enjoy The Process

Average Cash Outflow

The first thing I did was to estimate how much I was spending on average each week without having to make any compromise in my lifestyle, and I found that I lived quite well with about $50 per week, and I continue to enjoy the same lifestyle till now. Of course there are the occasional splurges, but that will be taken care of without me having to worry if I have enough money to last through the week or month. (I’ll touch on this point next!)

Everyone has a different cash outflow and at different points in our lives we will have different spending power and lifestyle. So all that you need to do is to understand on a normal basis how much you are spending. Now that we have settled this, everything else is easy!

If I Don’t Need It, Keep It

Now this is probably by far the easiest step, and the one that is going to make the biggest difference. Whenever I receive my allowance or pay, I immediately put aside the excess of my $50 spending per week and never see them again. If I don’t see my wallet filled with money, I wouldn’t have a spending mentality. So far that works very well for me and I believe it works well for anyone! Remember I was talking about occasional splurges? Here’s the best part. Because of the excess I’ve been putting aside for weeks and months, I know very comfortably that I can afford the splurge and not have to worry if I’ll have enough to spend the next week or month like I used to. Of course the word ‘Occasional’ is a pretty loose term. What’s your ‘occasional’ may not be mine. But it doesn’t matter because we have the next step to keep us in check!

Track And Enjoy The Process

You won’t see the effects of your actions until you do up a simple chart to track how much you have saved up thus far. This is also the step where I track what my large purchases are and if they are justified purchases. Now, over here is when you can keep your ‘Occasional’ spending in check. Is it hindering you building your wealth? If so, take steps that you deem necessary. The rule of thumb is to make sure your networth go up every month. If there is a hiccup, ask yourself, why? 🙂

I hope you’ve learnt something today and give it a try! Save this article somewhere on your Facebook or something so that you may refer to it from time to time to make sure you are still on track! I can’t wait to hear your success stories so please share with me how it’s been going!

Read More:

Timeless Guide To Fattening Your Wallet

Aloysius Lee

Aloysius has been investing in Singapore Equities from the age of 18 and is still madly enthusiastic about it. He strives to sharpen his edge while guiding others along the way to snowball their way to financial freedom!

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