Personal cash flow

management strategies

Manage your personal cash flow with expert financial advice.



Crunch the numbers to show you where you should be putting your monthly savings, based on your age and your personal financial goals.


Setup automated transactions, so that you know you are building towards your goals without having to lift a finger.


Employ tax-effective strategies to help you simultaneously build wealth and reduce your income tax obligations.


Figure out how any temporary cash flow shortfall or one-off capital expenses should be funded, while minimising the impact on your overall strategy.


Having a financial adviser determine how to best allocate your surplus income each month will allow you to achieve your goals and retire sooner.

This is achieved through detailed calculations of various options to conclude how much should be used to contribute to super, pay down debt or invest outside super, or a combination of one or more of these.

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What is cash flow management?

Cash flow management is the process of determining your sources of income, your level of expenses and allocating your surplus towards achieving your short, medium and long-term goals.

Cash flow management is arguably the most important part of financial planning and retirement planning.


Clearly, a higher income and/or lower expenses will provide you with a greater cash flow surplus which can help you meet your goals sooner. You may choose to use your surplus to reduce debt, contribute to super or invest in your own name, or maybe even a combination of all three.

How do I calculate personal net cash flow?

The first step to calculating your personal net cash flow is calculating all of your sources of income, such as salary, wages, rental income, social security, investment income, bank interest, etc.

The next step is to calculate the income tax payable on your income based on the current year individual tax rates, being sure to exclude any tax free income.

Then, calculate all of your lifestyle expenses, such as mortgage repayments, rent, groceries, travel, etc.

Once you have these figures, you deduct your income tax and lifestyle expenses from your total income and whatever is left is your cash flow surplus. You can then direct this to your loans, investments, superannuation and retirement plan.

What’s the Importance of personal cash flow?

The term living week-to-week applies to individuals or families who have no cash flow surplus because their total income is used to cover tax and lifestyle expenses, with nothing left over. Living this way doesn’t allow you to build savings and investments for longer term goals.

A personal cash flow is important because it allows you to identify where your income is coming from and how it is being spent. You can then use this knowledge to determine how many everyday expenses you are willing to sacrifice so that you can have more surplus to put towards future goals. This process becomes much easier once you jot down what your future goals are, as it gives you incentive to work towards something bigger than your day-to-day needs.

The next step is figuring out the purpose of your investment. What are you investing for and how far away is that? If you are saving for something where you need the money in a year or two, an aggressive portfolio is probably not the best option, as the returns over the short term for such a portfolio are very unpredictable and it might not meet your goal. However, if you are investing without needing to touch the money for 10 years, an aggressive portfolio may be suitable, provided you are comfortable with the short-term fluctuations.

You then need to do some rough calculations on the level of return you need over the timeframe to meet your goal and the amount of risk with your investments you are willing to accept. If the expected return from the investments chosen does not meet your goal amount, you may consider increasing the risk (to hopefully achieve higher returns), or you might reduce the amount you need to reach your goal. Conversely, if you project that the expected return provides you more capital than you need by the date of your goal, you may consider reducing the risk in order to provide more certainty that you will meet your goal.

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