Consequently, personal cash flow management is designed to handle your financial situation like a business, and you will function as the controller. It will allow you to see your financial situation from a long-term, systematic viewpoint. You will see how one move, such as a periodic tax payment, can affect your disbursements for several months prior to, and following, the actual payment. Budgets are too immediate in scope to allow you to relate a March income to a July expense. It is essential for you to begin a systematic savings and investment program to accomplish financial and retirement goals.
Every successful business relies upon a system to control income and disbursements.
Most persons have not saved as much as they would have wished. The reason is not that they did not intend to save, but they did not have a system. Lacking a system makes it very easy to be distracted by the many opportunities to spend earnings. Your financial needs and desires present unique situations, and your system must be flexible enough to accommodate whatever you require. While your friends or neighbors might be managing cash flow to save for a European vacation, you may need to direct cash flow towards current tuition for a degree.