Wealth Blog Post

How to Create a Monthly Cash Flow Plan

George Grombacher September 23, 2022

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How to Create a Monthly Cash Flow Plan

Having a monthly cash flow plan is essential for your long-term financial success. Without understanding how much money you have coming in, and how much is going out, you won’t be successful. 

When it comes to personal cash flow, Earnings – Spending = Savings. When we have a positive “Savings” number, we have positive cash flow. Meaning, you’re taking in more money than you’re spending. This is really important because it allows us to save and invest money. 


When we have a negative “Savings” number, we have negative cash flow. This means we’re living paycheck-to-paycheck, and more than likely stuck in debt. In that situation, we aren’t able to save or invest, and we aren’t able to work towards our financial goals. Either you’re treading water, or falling deeper into debt. 

Most Americans don’t know how much they earn, or how much they spend. Creating a monthly cash flow plan will help change that.   

I’ve been helping people improve their personal finances for over 20 years as a financial advisor. I’m honored to be named to Investopedia’s list of the top 100 financial advisors many years running. 

Here’s what we’ll cover:

  • Tracking your cash flow
  • Setting your financial priorities
  • Conducting a cash flow audit
  • Your cash flow plan

Let’s get started.

Tracking your cash flow

A cash flow statement is a valuable tool for tracking your money coming in and your money going out. How you track your cash flow is up to you (Spreadsheet, software, app). What’s important is that you’re monitoring every transaction from all of your accounts. If you use one bank account for all your finances, great. If you have multiple accounts, you’ll need to merge and review every transaction. 

Your cash flow statement provides you with a snapshot of how you’re doing from a short-term perspective. Remember the simple, but impactful, equation Earnings – Spending = Savings. When you have a positive number, great! You can decide which priorities to allocate your savings to. When your cash flow is negative, you can determine what changes or adjustments need to be made. 

You can download our Personal Financial Statement. 

Setting your financial priorities

In order to become financially successful, you need to have clear goals, and maintain a personal budget. 

You can access our Goals course for free, and learn more about budgeting in this post

Once you have your goals and your budget completed, you’ll know which priorities to allocate your savings to. 

Conducting a cash flow audit

If you’ve not been in the habit of consistently reviewing your cash flow, I recommend you go through the last 12 month’s worth of your spending.

To make the most of this exercise, it’s important to get as detailed as possible, which means really digging into expenses line by line. Looking at credit card and bank statements and going back through online accounts, such as Amazon, can help us recognize charges we’ve forgotten about and reduce monthly expenses.

Look at everything you’ve spent money on and determine if there are any expenditures you can reduce or eliminate all together. Once you identify unnecessary expenses, cancel those subscriptions or create ways to curtail those buying behaviors. 

If you’re unsure whether or not you need something, try cutting it from your spending for a week or month. If you don’t miss it, it’s probably a good sign you don’t need it.

Your cash flow plan

When you’re getting started, go through your spending on a monthly basis. The key idea is to align your spending, saving, and investing with your goals and your budget. The more aligned you get, the greater your likelihood of financial success. 

When you’re on top of your cash flow, you can move to quarterly checkups. 


Creating your monthly cash flow plan is essential for your long-term financial success. This will serve as an important part of your financial foundation, which will help you find financial peace of mind. Once you have that, you’ll be able to pursue financial prosperity. 

If you’re ready to take control of your financial life, check out our DIY Financial Plan course. 

We’ve got three free courses as well: Our Goals Course, Values Course, and our Get Out of Debt course. 

Connect with one of our Certified Partners to get any question answered. 

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