Create a Budget

If your child is an appropriate age and you feel comfortable sharing information with her, you might consider showing her how you manage your cash flow.

You can use the worksheet below to fill in your data and determine where you spend your money. This is a great learning tool for your child. If you aren't comfortable sharing your real information, you can fill in "sample" data for your child to help her understand what is involved in determining cash flow and putting a budget together.

Cash Flow Worksheet

What To Do With Your Results

Positive cash flow: Do you have money left over? Then you're spending less than you make and are in good shape. You could apply the extra money to one of your credit cards or other debts. And if you still have money left over, you should consider increasing your savings.

Negative cash flow: If your expenses exceed your income, you should create a budget to cut back on your variable expenses. Remember, the key is to always spend less than you earn. If you can't find ways to cut expenses, then you'll need to step back and evaluate what you currently consider "necessities." They may be luxuries in disguise that you can live without.

Page 6 of 7: Cash Flow

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