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Financial planning worksheet12/1/2023 Set up automatic contributions to an IRA, Roth IRA, or brokerage account. Holding too much cash over long periods of time erodes purchasing power due to the impact of inflation. If you’ve already built up 3-6 months of living expenses (identified using the expense worksheet) of cash in an emergency fund, then the excess cash should be going to work elsewhere. In the case you’re accumulating cash in your checking account, meaning you have excess cash flow, the expense worksheet can help determine, on average, how much that is every month. As long as you’re saving and investing a good percentage of your income every month, the remainder can be comfortably spent. Once the debt is paid off, start automating all your savings and investments. Start using cash to pay for things so you can begin paying down your credit card debt. Set limits on how much you’re spending on certain line items to limit your overall spending. This is where a traditional budget exercise can come in handy. In the case of accruing credit card debt, the expense worksheet can help you identify things you’re spending too much on. Obviously accruing credit card debt month over month is more of a problem and stuffing a bank account with cash isn’t necessarily a “problem”, but I’ll explain later. If you’re currently accruing debt on a credit card or stuffing your bank account with cash on a monthly basis, you have a cash flow problem. The following are a few of the uses for our personal expense worksheet. A lot of people come back to us once they’ve completed the worksheet having found at least one line item they are surprised by. It can be surprising how little or how much you’re spending on a monthly basis. It automatically calculates the annual expenses once you’ve entered the monthly numbers and helps you identify fixed expenses vs variable expenses. The personal expense worksheet can be used for individuals or families. For most people, we believe that identifying free cash flow, working to increase it if need be, and automating contributions to retirement, savings, or other investments is a more practical and reliable way to work towards your goals. We don’t believe in traditional budgeting unless it’s truly necessary to break bad spending habits. We hesitate to call it a budgeting template because it’s not. We developed a personal expense worksheet to help our clients identify where they’re spending their money, and how much they’re spending on average, monthly and annually.
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