Normally I handling budgeting and cash flow management for businesses, but when people have changes in their personal lives such as: loss of loved ones, changes in marital status, additions of expenses, additions of family members or responsibilities. With these changes, you need to alter your cash flow management or cash planning to handle the changes that have taken place.
Many people who find themselves in these situations are not familiar with managing their cash flow, bank accounts, and expenses. Many people who were in relationships that suddenly find themselves responsible for their own cash flow management have not been the ones responsible in the past for those activities. This creates a lot of excess stress in an already emotional time.
Let me see if I can help simplify it for you and then suggest some other support that is available to you. Think about it this way. You have a bunch of money in a cookie jar, and you have to determine how and when and where it is spent to support you during the month, and you have enough in the jar for essentials first, and then if there is anything left you can use it for non-essentials or start some savings. You can’t use more than what is in the jar!! So let’s look as some steps to simplify:
Step one: Collect all the bills and statements that you receive. Don’t forget to include bank statements so you can identify any amounts that are automatically withdrawn from your accounts. These are only things that you MUST have to live. “Nice to haves” are excluded at this point.
Step two: Create a list, including Name of company, date it is due, amount owed (if variable, just try to estimate it), frequently (monthly, annually, etc)
Step three: If you aren’t sure of the bills you should receive here are some examples: utilities bills (gas, electricity, water, etc), phone bills, internet, cable or satellite, mortgages or leases or rent, insurance for vehicles, vehicle payments, and school fees.
If you are in a position to be able to do this now, ahead of a change of status situation, then you have the luxury of pre-creating and maintaining this list so you have all the details when you need them.
Step four: Total the amounts of the bills owed by month and then total all to get an annual amount for expenses. Now we are going to create what I call the “Breakeven” for you personally, so you know how much money you need to have monthly to be able to live. Take the total for expenses for a year, and divide it by 12. This gives you an approximate monthly expense amount, excluding food and entertainment and personal spending.
Step five: Create an estimate for food and required personal spending for each month. This excludes expenses that aren’t “required” like movies, eating out that aren’t MUST Haves.
Step six: Total the monthly amounts from step four and step five to give you a monthly total for all expenses. This is the amount you MUST cover every month. So whatever you do for employment must cover this amount. If it doesn’t then you have some choices to make, such as what can I exclude, how can I make more money, what can I do without, what isn’t necessary, etc. You must focus on the essentials before the “nice to haves”.
Step seven: Now comes the monthly activity part. On a computer or in a log book, you need to track your expenses versus your bank account to ensure that you know when expenses are paid and how much money is still in your bank account. This process helps you to maintain control of your cash flow and finances so you can make decisions when required.
Step eight: Excess money should be put aside in a separate bank account or into investments with the help of a financial advisor or investment banker. This stops you from being tempted to spend it all and not plan for the unexpected. You don’t want to start living pay cheque to pay cheque, because you can’t control yourself. This discipline will help you to build for the future.
Step nine: Be sure to get connected with specialists to help you, in the areas of accounting, tax returns, banking, financial planning, and insurance. These specialists will help you maintain control and monitor your situation.
I hope this simplified cash management process helps you to create control of your finances in times of change. This in turn will give you piece of mind. If you need help let me know.


Cheryl Dyck, MBA, ISP, ITCP, IP3P
Certified Business Coach
Business Edge Coaching Inc / ActionCOACH
Coaching Consulting Training
Canada’s #1 Business Coaching Firm
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