Home Wealth Personal Finance 3 steps to manage your cashflow

3 steps to manage your cashflow

It could be your ticket to financial wellbeing.

Senior Digital Journalist, Your Money

Editor’s note: The following article contains information only. It is not intended as general or personal advice. Your Money recommends seeking professional advice specific to your personal circumstances.


We all know the feeling, staring at a bank account balance trying to figure out what you spent all that money on.

After paying for your mortgage, bills and groceries each month, it can seem like there’s hardly any money left over for those New Year’s goals, let alone for investing.

It might not get the hype it deserves, but financial coach Rebecca Pritchard of Wealth Enhancers says the key to reaching financial wellbeing is to properly manage your cash flow.

“The first thing is to be really intentional about this. Cashflow doesn’t happen by magic, it happens by us creating it,” she told Your Money Live.

Step 1: Set your goals

Setting short- and long-term goals about what you’re wanting to achieve with your life is the crucial first step, according to Pritchard.

“You need to understand why you do it in the first place… Having a really clear framework of why this important to you and therefore what it’s going to create.”

She said the first goal is to be able to meet basic necessities such as bills, groceries and transport.

Once you work out what money needs to be spent on the necessities you can begin to work how much is available to put towards short-term and long-term goals.

“Taking a step back and forgetting about the money for one moment, and think about why this is important to us, what it’s going to mean for our lives… That’s a really good place to start.”

Step 2: Set up your bank accounts

For short-term goals – anything within three years – Pritchard says cash is king.

And according to her the best way to manage cash is to set up multiple accounts and label them appropriately.

For the necessities, that could be accounts labelled ‘personal spending’, ‘everyday cash’ and ‘bills.’

Short-term goals such as overseas-trips might be labelled ‘Spain holiday,’ ‘kids education’ or ‘wedding.’ If the goals change, Pritchard says, just change the labels.

Pritchard advises that long-terms goals should be viewed as more of an investment structure, rather than cashflow.

These might include ETFs, term deposits, superannuation accounts or shares.

Step 3: Check in frequently

Once everything is set up, it’s important to check in regularly to make sure everything is still on track, because goals and financial circumstances frequently change.

“It’s really about circling back around to these things and checking is it working, do I have enough money in there?”

Pritchard says people should try to always be aware of what’s coming in and out of their accounts, but as a rule, she says it’s good to check in do a refresher every three to six months.

“Pop a reminder on your phone and come back to it.”

Watch the video for more tips.

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