Search


Subscribe to AFM


Subscribe to AllFinancialMatters
by Email

All Financial Matters

Promote Your Page Too

The American's Creed

Site Sponsors

Books I Recommend


AFM in the Media


Money Magazine May 2008

Real Simple March 2008

Blogroll (Daily Reads)

« | Main | »

How to Create a Cash Flow Statement

By JLP | October 10, 2006

With my last post, I introduced the cash flow statement. With this post I want us to look at a model cash flow statement so that we can see how it is arranged and what information we can glean from it.

Before we get started, I want to mention a couple of things about cash flow statements in general. Cash flow statements are used to track the sources and uses of income. And, although it doesn’t seem to make sense, investing in a 401(k) or other investment account is considered a “use” of funds. Your cash flow statement should be prepared at least once a year and updated monthly to reflect changes in your situation.

Below is a model cash flow statement that I put together. I meant for it to coincide with the net worth statement.


CASH FLOW STATEMENT

Sources of Cash

Wages/Salary

$105,000

Interest

$2,000

Mutual Fund Distributions

$0

Other

$0

Total Sources of Cash

$107,000

Uses of Cash

Payroll Deductions

Federal Income Tax

$23,000

Social Security & Medicare Tax

$7,103

State Income Tax

$0

Medical Insurance Premiums

$2,000

401(k) Plan

$12,000

Total Payroll Deductions

$44,103

Fixed Expenses

Mortgage

$11,600

Loan Payments

$2,000

Utilities

$6,000

Insurance

$3,000

Property Taxes

$3,500

Investment Plans

$4,000

Total Fixed Expenses

$30,100

Variable Expenses

Charitable Contributions

$10,500

Clothing

$2,500

Education

$4,000

Food

$6,000

Gasoline

$3,200

Gifts

$2,000

Travel/Vacation

$2,500

Total Variable Expenses

$30,700

Total Expenses

$104,903

Positive/(negative) Yearly Cash Flow

$2,098

With my next post, I’ll go into more detail about what to look for in a cash flow statement and how it ties together with your net worth statement.

Topics: Basics, Financial Planning | 3 Comments »


3 Responses to “How to Create a Cash Flow Statement”

  1. Free Money Finance Says:
    October 13th, 2006 at 5:23 am

    Star Money Articles for the Week of Oct. 9

    Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: Blueprint for Financial Prosperity asks you to analyze his homeowner’s policy. Consumerism Commentary details his current asset allocation. AllFinancialMatters…

  2. sravi Says:
    October 20th, 2006 at 5:52 pm

    check out the ebook on bills.com

    . i found the personal finance worksheets to be immensely useful. i used to be very disorganized with my financilas before. they certainly set me on the path ot financial organization.

  3. Daria Says:
    February 7th, 2010 at 10:13 am

    This looks interesting only you are over a dollar with your computation. Its supposed to be $2,097.

Comments