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A Cash Flow Technique to Use in Household Budgeting
This technique can help you track the flow of your money. It's explained the easiest by using a simple example:
Bob and Peggy are both employed; Bob at an hourly job which pays every two weeks and Peggy as a secretary paid monthly.
To use this system they chart their income and expenses using the time frame of Bob's paychecks since he is paid the most frequently. Example #1 is a section of their chart. Note the dates at the top. These are Bob's paydays. Peggy is paid the first of the month so her income is entered in the appropriate column. The "P" column is for planned figures; the "A" column is for actual figures.
The utilities line includes the codes identifying each separate utility. "T" is for telephone, "C" for cable, "E" for electric, and "G" for gas. Examples #2 and #3 on the reverse side shows how their chart looked after they decided what to do about the negative balance of $199 for the time period 8/17-8/30.
Example 3 shows their chart on 9/13. Note the actual figures that had been entered:
While they still have a surplus of money, it's less than expected and is needed to cover expenses during the next period. To complete their sheet for 9/14, they would enter the surplus $69 at the top of the planned and actual columns under 9/14.
By looking at planned and actual figures and doing the necessary adjustments, they are able to meet their financial commitments.
Another suggestion would be to enter all planned figures in pencil. Enter actual figures in ink when the paychecks are received and when the bills or other expenses are paid.
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