Free Essay

The Monthly Cash Flow Plan

In: Business and Management

Submitted By alefros
Words 1333
Pages 6
The Monthly Cash Flow Plan

Hey, guys! Today, I just want to talk with you a little more about The Monthly Cash Flow Plan. This goes along with basically setting up your, and figuring out your zero based budget.

Basically, you use The Monthly Cash Flow Plan as a great resource for you to help you figure out and think of all the different things that you really wouldn’t think of. So I just start to go through these, just fill in the steps. It is very easy to just go through this.

Some of this stuff is kind of, it maybe too… I don’t know you dig a little bit too into it. You know, I kind of like to, let’s see. What is this word I’m kind of looking for? I encompass everything into one, more or less-- I do not break it down quite this much. I mean, you can, if you can. The more you can break it down, the better off you are, but, to break it down into, like even for example, I’ll start giving you examples as we go through, like transportation. It says gas and oil.

Yes! It is easy for you to break down what you should be spending in gas, but, how do you break down like, tires? I mean, it is just a whole different thing you can do, so for me, I would just put it in a budget as far as gas, oil changes, tires-- all that stuff into one thing. And then there is this one here has license and taxes, **car’s** (unsure) replacement—these kind of things, so if you would just kind of split it that way to make it one big expense instead of like breaking it down individually-- but it is just me. I kind of like I said, I kind of have a bigger budget just to cover the little things like that, just to kind of cover. You know, we have some money that gets put away every week from our paycheck into an account that’s separate from ours. That way, it pays like the vehicle’s taxes, the fees for the vehicle registration… insurance. It is just kind of money that we never see so it is out of sight out of mind; it is actually in a different bank. So it actually works out really good.

But, just start going through this here, as you’ll see, you got your charity. You can do your tithes and charity and offerings, however you want to do it. For saving your emergency fund, just you want to make sure that that emergency fund has a thousand dollars in it. And then, we’re not going to do anymore saving until we get past step two. So, you want to save up a thousand dollars first, and then we will go from there.

Housing - you got your mortgage, your second mortgage, your taxes, your repairs and maintenance. Repairs and maintenance is kind of tough. You know, especially if you’re trying to get out of debt quickly. To have a repair and maintenance, I mean obviously you’ll want to do little maintenance and things like that, but to say like I’m saving up for an addition or to, say you’re going to paint the house or something, those kind of things are really hard to save up for and pay off debt at the same time so you have to think about that and that aspect of thing.

Utilities - you got electricity; gas; water; trash, if you pay for your trash, your mobile phones; your phone; your internet; your cable. These are all bills that you know are going to come up every month. So you’ve got to think about those, write those down on here.

Food - your groceries, restaurants, if you’re truly dedicated to this, you shouldn’t see the inside of a restaurant unless you’re working there. Clothing - I said in an earlier video it’s just a matter of school comes around and then you’re going to shop for kids so that’s kind of, factor that stuff in.

Transportation, again here. Medical - health if you have medical bills, doctor bills, your dentist bills, vitamins, your optometrist, if you need to get your eyes checked, that kind of stuff, to save up and break down just a little bit more. And then it just has your insurances; we all have insurances that we have to pay. We can’t get out of that unfortunately.

Just personal stuff in here, you got your childcare, sitters, I mean for some of us, we have to do that. We don’t have a choice. Toiletries - that’s such a hard thing to, I mean, you’re getting really fussy if you have to know how much toilet paper you’re using. I just kind of, like I said, I put that in my slush fund. Here’s descriptions for things: pocket money, it’s part of my below money, his and hers.

Then recreation, I highly recommend that you do create a recreation account, just so that way you can go out, say you have a special night or something and you want to take your friend or take your wife or something out for dinner or a movie. Because you don’t, you see the thing is, with Linz and I, we decided that, we were going to do this, but we’re not going to do it where we live completely on beans and rice.

If you listen to the Dave Ramsey show, I mean these people are living on absolutely nothing; they’re not doing anything. And see, our point of view is that we truly love to have fun, our kids are only going to be little for so long, so for us, it’s important to actually get out there and enjoy ourselves too. I’m not willing to sacrifice two years of our lives just to get out of debt. And with us, it was just a matter of I got more income, so that way we could have more fun. And we’re still paying off debt, I mean, we’re attacking it a vengeance because we are telling our money where to go, but we’re not following this a hundred percent. So if you feel like you’re not following it a hundred percent, it’s ok, it’s fine. We’re doing the same thing. So, cause we like to have a lot of fun. Like I said, if we were really following it, we wouldn’t be able to have five vacations. That’s just the reality, cause that money could have gone to something else. But I tell you I wouldn’t take any of those back.

And then you list your debts: car payments, credit cards one, two, three, four, five, you know, I think we had all five of these when we started; student loans, one, two, three, four; and I think we’ve got two, and then just any other stuff, and so this monthly cash flow plan, it really helps you to, and this is if you don’t know it’s in the files section of this group. You can go in and just print it off, and it will really help you to create your zero based budget. It will give you all the ideas that you need, and like I said, you’re first budget isn’t going to be very good anyways, so don’t stress about it too much. But, this gives you all the ideas that you need, so you should be all set. But that’s it for today. So go through your monthly cash flow plan, get that part figured out, and then once you do, just let me know in the comments. Just say, “Yep, I’ve looked at it, I’m starting to really figure things out.” And if you have any questions, just ask. Remember this group is here for you to ask questions so the only way that I can answer them, is if you ask them. Okay? So I’ll see you tomorrow.

Similar Documents

Premium Essay

Toy World

...Introduction At Toy World Inc., President Jack McClintock is considering the adoption of a level monthly production plan for the coming year. The manufacturer of children’s plastic toys currently employs a production plan that follows the seasonality of sales. In considering whether to implement a level monthly production schedule, we compared the benefits and costs of both methods in relation to the financial and operational needs of the business. This allowed for an in-depth analysis of the savings allowed by a level monthly production schedule, and the impact of such a system on timing, cash flow and risk. As a toy manufacturer, Mr. McClintock’s company would face unique risks under the proposed system of production. These risks were compared to those accepted under a seasonal production schedule. By completing this analysis, we determined that Toy World Inc. would benefit the most from maintaining a seasonal production system. However, since a level monthly production plan would result in cost savings for the company, we have presented options through which Mr. McClintock can manage the financial implications of this schedule. Benefits of Level Monthly Production Mr. McClintock can expect to see savings of $490,000 in labour costs under this production system. These savings would be reflected in a lower cost of goods sold (70% of sales to 65.1%). A level monthly production plan allows the removal of overtime wage premiums in peak seasons, resulting in savings of $225,000...

Words: 1386 - Pages: 6

Free Essay

Personal Goals

...Personal Financial Plan A personal financial plan needs to look at all aspects of spending, as well as income. Looking over my spending in comparison to my income leaves me with a surplus at the end of each month to save or invest. My personal financial goals are mainly to pay off my debts quicker and not paying as much in interest to the debtors. My initial financial plan is to pay more each month to my unsecured creditors and get them paid off quicker and save on interest. Getting these credit card paid off will help with cash flow because I will not be paying as much out and able to save more. I have cash flow coming from both my full time job and from the Montgomery GI Bill through the Veterans Affairs. With both of these incoming cash flows it makes my monthly income look to be greater than it is going to be when I graduate from school. This is because the GI Bill will no longer pay me a monthly stipend after I have graduated from school. Without this stipend, my monthly income will drop by $1700. A $1700 monthly decrease will put a serious hurt on my ability to pay more on my unsecured credit. My plan is to pay as much of that unsecured credit off while still receiving the GI Bill payments of $1700 a month. Like most people in school, I am hoping that my college degree will assist me in making a greater income. Looking to the future if I pay off as much of the unsecured credit as I can with my extra monthly money I will be left with only my secure credit, one...

Words: 430 - Pages: 2

Premium Essay

Business Plan - Dormitory

...MANHATTAN BUILDING-DORMITORY NUEVA STREET, BINONDO MANILA BUSINESS PLAN Prepared by: Shane Martinez MANHATTAN BUILDING – DORMITORY NUEVA STREET, BINONDO MANILA BUSINESS PLAN 1. Executive Summary 1.0 Executive Summary Manhattan Building-Dormitory will offer benchmarked rental rooms and commercial units for the Universities of Intramuros Area and Binondo Area. The Building-Dormitory will balance safety, convenience, affordable price and a positive atmosphere for all tenants. These rentals will be provided with unmatched levels of customer service and attention. Gross Sales are projected to be Php _______________ in year one growing to Php _______________ in year three. The Market Manhattan Building-Dormitory will target three distinct customer segments. The largest segment that they will service is the University Students of Intramuros Area. This segment is growing at _____% a year with _______________ prospective customers. This segment is especially attractive since most of the local rental properties that are geared toward students are run down, poor quality units. The second market segment is faculty and staff of the Intramuros Area Universities. This section has a _____% growth rate and _______________ potential customers. And the third market segment is the professionals working within the Binondo Area. The Universities at Intramuros Area are the following: a. Colegio De San Juan De Letran ...

Words: 3710 - Pages: 15

Premium Essay

Fundamentals of Loan

...1. Fundamentals of Loan Analysis 1.1 Objectives and Methods of Loan Analysis Loan analysis is to ensure that loans are made on appropriate terms to clients who can and will pay them back. What analysis is needed and what is the most efficient approach to fulfill that need is primarily determined by the type and nature of the loan. • Objectives of Loan Analysis • To place good and appropriate loans -- can the loan generate income for repayment and will the client repay • Determine eligibility of the applicant -- is he/she eligible according to the the program criteria • Training needs and skills -- to assess the training needs and develop the financial management skills level of the client. (This is the basic principal of programs that integrate their credit and training methodologies.) • Program Indicators -- loan analysis may also be used to generate the indicators that will be used to evaluate the impact of the loan. 1.2 What Analysis is Needed? How do we determine what is needed to adequately analysis a loan? What type of information is critical? Some types of loans require more thorough analysis than others. Larger, long-term loans for fixed assets require more thorough analysis than short-term working capital loans. For individual loans, loan analysis and follow-up visits provide most of the guarantee for the institution and thus the analysis is necessarily more extensive. Group loans transfer most of this responsibility to the clients...

Words: 4915 - Pages: 20

Premium Essay

Fi 3300 Thps 3

...next year d. receiving $10,000 today and $10,000 next year e. Without an interest rate there is not enough information to tell. 2. In 3 years you are to receive $5,000. If the interest rate were to suddenly increase, the present value of that future amount to you would: a. Increase. b. Decrease. c. Remain unchanged. d. Either increase or decrease depending on the interest rate. e. Cannot be determined without more information. 3. Assuming an interest rate of 0 percent, which of the following cash-inflow streams should you prefer? Answer Choice Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow a. $400 $300 $200 $100 b. $100 $200 $300 $400 c. $250 $250 $250 $250 d. Any of the above, since the each sum to $1,000 4. Assuming an interest rate of 10 percent, which of the following cash-inflow streams should you prefer? Answer Choice Year 1 Cash Flow Year 2 Cash Flow Year 3 Cash Flow Year 4 Cash Flow a. $400 $300 $200 $100 b. $100 $200 $300 $400 c. $250 $250 $250 $250 d. Any of the above, since the each sum to $1,000 5. In a typical loan amortization schedule, the dollar amount of interest paid each period: a. increases with each payment b. decreases...

Words: 2917 - Pages: 12

Premium Essay

Project Management

...at a detailed level. * Transactional: Managing the project's work flows and performance. Establishing the project baseline metrics and parameters required to control the project during the implementation stage. * Control the project: Risk analysis, project effectiveness, contingency plans * Spend more time hands-on, leading the team and communicating the vision * Top level objectives of the project and the day to day activity * Critical Success factor * Metrics for Success i. Progress: Actual achieved (facts not opinion) with reference to planned delivery ii. Cost: Committed costs wrt planned cost iii. Scope: Level of agreed change. Change control iv. Risk: Risk analysis= management indulgence, level of exposure v. Performance: Delivering value? How much is it costing to for physical progress? vi. Forecasting: Effect of productivity on both planned completion dates and financial budgets for delivering them vii. Cash Flow: Financing f the project. Cost or saving associated with actual cash flows need to appear in the committed cost analysis. viii. Unresolved issues/actions: Tangible asset to measure the ability to develop project processes and outputs together. 20-80 Rule: 20% of the time should be spent understanding where the project is and identifying significant deviations from the plan 80% of the time should then be spent leading the team, to resolve issues...

Words: 450 - Pages: 2

Premium Essay

Eco 500

...SOLUTION ECO 550 . You have determined the profitability of a planned project by finding the present value of all the cash flows from that project. Which of the following would cause the project to look more appealing in terms of the present value of those cash flows? a. The discount rate decreases. b. The cash flows are extended over a longer period of time, but the total amount of the cash flows remains the same. c. The discount rate increases. d. Answers b and c above. e. Answers a and b above. . Which of the following statements is most correct? a. If the discount (or interest) rate is positive, the future value of an expected series of payments will always exceed the present value of the same series. b. To increase present consumption beyond present income normally requires either the payment of interest or else an opportunity cost of interest foregone. c. Disregarding risk, if money has time value, it is impossible for the present value of a given sum to be greater than its future value. d. Disregarding risk, if the present value of a sum is equal to its future value, either k = 0 or t = 0. e. Each of the statements above is true. . Which of the following statements is most correct? a. A 5-year $100 annuity due will have a higher present value than a 5- year $100 ordinary annuity. b. A 15-year mortgage will have larger monthly payments than a 30-year mortgage of the same amount and same interest rate. c. If an investment pays 10 percent interest...

Words: 2312 - Pages: 10

Premium Essay

Blank

...Form | ------------------------------------------------- Top of FormBottom of Form | ------------------------------------------------- Top of FormBottom of Form | ------------------------------------------------- Top of FormBottom of Form | ------------------------------------------------- Top of FormBottom of Form | ------------------------------------------------- Top of FormBottom of Form | Question #: | 1 ( Q02.1 ) | Grade: | incorrect | Question: | Assume a home appraiser were to value a home based on rental income only. Assume that a home is indefinitely rentable, without disruption, at a monthly rate of $700. What is the value of this home when the annual interest rate is 5% and the first payment starts next month? | Your answer: | 170731.707 | Correct answer: | 171816.085414    (difference= 1084.3784144) | Presicion: | 500 | Explanation: | The monthly interest rate is (1.05)^(1/12) - 1 = 0.0041 Thus, the perpetuity PV = $700/0.0041 = $171816.1 | Question #: | 2 ( Q02.2 ) | Grade: | correct | Question: | Your new job includes as one of your benefits a free doughnut each morning with a value of $1.05. If you expect doughnuts to increase in price 5% per year, and prevailing interest rates are 10%, how much do you value this benefit if you expected to live forever and work every day (oh dear!). Note, there are 365 days in a year and you have just finished your breakfast. | Your answer: | 8236.763 | Correct answer: | 8236.763236    (difference= 0...

Words: 2521 - Pages: 11

Premium Essay

Finance Help Sheet

...news. Describe corporate governance. Corporate governance is the set of rules that control a company’s behavior towards its directors, managers, employees, shareholders, creditors, customers, competitors, and community. Describe the corporate governance provisions that are internal to a firm and are under its control. The provisions under a firm’s control are: (1) monitoring and discipline by the board of directors; (2) charter provisions and bylaws that affect the likelihood of hostile takeovers; (3) compensation plans; (4) capital structure choices; and (5) accounting control systems. How does block ownership affect corporate governance? Block ownership occurs when an outside investor owns a large amount (i.e., block) of company’s shares. Large institutional investors, such as CalPERS or TIAA-CREF, often own large blocks. Blockholders often monitor managers and take active role, leading to better corporate governance. Operating Cash Flow2011 = NOPAT2011 + Depreciation and Amortization2011 Net Operating Profit after Taxes2011 (NOPAT2011) = EBIT2011 – EBIT2011 x Tax Rate Investment in Operating Capital2011 = Capital Expenditures2011 + Change in NOWC2011...

Words: 1543 - Pages: 7

Premium Essay

Netflix

...launching Netflix.com, offering pay-perDVD rental services by delivering DVDs via mail. As the company prospered during late 1999, NetFlix replaced its pay-per-DVD revenue model with a fixed monthly fee system that allowed customers to rent up to 4 DVDs per month with no due dates or late fees. In February 2000, it launched a new plan, where, with a monthly fee of $19.95 instead of its previous $15.95, subscribers were able to have up to 4 DVDs in their possession at one time. The website allowed subscribers to make their own lists or “queues” of movies that they browsed and selected to watch. Then, it shipped movies that were at the top of the queues of subscribers via mail. It also provided subscribers with individualized ratings on all movies that customers had previously rated after viewing. As the company enjoyed tremendous success, it decided to submit its S-1 filing for an initial public offering. However, soon after it was submitted, the NASDAQ stock market fell 25% to 3,794, making it more difficult for a company’s IPO to succeed with uncertainty in the financial markets. In July 2000, Reed Hastings, CEO of NetFlix, needed to decide whether the compnay should proceed with the IPO or withdraw it. Investment banks predicted that the IPO of NetFlix would succeed if it showed positive cash flows within a twelve-month horizon, but the executives at NetFlix were unsure whether they could achieve that goal. Long-Run Objectives & Performance To Date NetFlix’s long-run objectives...

Words: 2108 - Pages: 9

Premium Essay

Be Company

...Case Study 11-1 Medieval Adventures Questions 1. Prepare monthly income statements, balance sheets, and cash budgets based on sales increases of 500 units per month and 30-day advanced production for January through September. See attached income statements, balance sheets and cash budgets. When will the company need extra funds? How much will be needed? When can a short-term loan to cover the need be repaid? The company needs extra funds in April to keep from going into a negative bank balance by the end of April. If nothing changes the ending bank balance for April will be -$2500. A short term loan of $2500 will allow the company to continue operating through April. Unfortunately if nothing changes, they will need another short term loan of $25000 to operate through May, $37500 to operate through June, $40000 to operate through July, and $32500 to operate through August. If the business plan is not changed or customers made to pay within the net 30 terms, a short term loan cannot be repaid with the current sales and production schedule. 2. How is it possible that a company starts with $250,000 in capital and has profitable sales for a period of six months and still ends up with a zero bank balance? Why did Medieval Adventures need money in April? How could this need have been avoided? The company runs out of cash because the aggressive growth schedule cannot be sustained while the customers are allowed to pay invoiced 30 days late. Medieval Adventures needs money in April...

Words: 1247 - Pages: 5

Premium Essay

Tvm Chapter 6

...and discount rate 1. Answer: a Diff: E You have determined the profitability of a planned project by finding the present value of all the cash flows from that project. Which of the following would cause the project to look more appealing in terms of the present value of those cash flows? a. The discount rate decreases. b. The cash flows are extended over a longer period of time, but the total amount of the cash flows remains the same. c. The discount rate increases. d. Statements b and c are correct. e. Statements a and b are correct. Time value concepts 2. Which of the following statements is most correct? a. A 5-year $100 annuity due will have a higher present value than a 5-year $100 ordinary annuity. b. A 15-year mortgage will have larger monthly payments than a 30-year mortgage of the same amount and same interest rate. c. If an investment pays 10 percent interest compounded annually, its effective rate will also be 10 percent. d. Statements a and c are correct. e. All of the statements above are correct. Time value concepts 3. Answer: d Diff: E Answer: e Diff: E The future value of a lump sum at the end of five years is $1,000. The nominal interest rate is 10 percent and interest is compounded semiannually. Which of the following statements is most correct? a. The present value of the $1,000 is greater if interest is compounded monthly rather than semiannually. b. The effective annual rate is greater than 10 percent. c. The periodic interest rate is 5 percent. d. Statements...

Words: 30959 - Pages: 124

Premium Essay

Go, Chinese Economy

...quoted Mary two options— financing or leasing. The leasing deal requires a down payment of $1,999 and a monthly payment of $239 for 36 months. Alternative she can purchase Taurus at $21,999 using dealer’s promotional financing deal at 2.99% interest rate (APR on a monthly base) for 36 months. At the end of the 36 month, the car is worth 65% of the purchase price. (that is, if she leases the car, she can buy the car from the dealer at that price; if she purchases the car, she can sell the car at that price). Mary has heard that you are taking Fin6301 and would like to get your help. Assume that the interest rate is 6% (APR on a monthly base) (a) If Mary uses the financing deal to purchase her car, how much does she pay each month? (b) Which option is the best? (hint: comparing the PV of costs) 2. After graduating from UTD at age 25, John got his first job at Goldman Sachs with an annual salary of $60,000 a year and a one-time signing bonus of $25,000. He bought a car using his signing bonus. Goldman Sachs offers a 401K retirement investment plan that will match employee’s contribution up to 10%. For example if John invests 1% in the 401K account, Goldman Sachs will put in another 1% into his account. John is expecting an annual salary increase of 2.4% (APR on a monthly base). Suppose, the 401K investment plan will earn him an annual return of 8.4% (APR on a monthly base). (Assume the beginning of age 25 is month 0 and salary is paid at the end of each month, i.e., beginning...

Words: 1289 - Pages: 6

Premium Essay

Business Plan

...Table: Start-up Funding 4 Chart: Start-up 5 Table: Start-up 5 3.0 Services 6 4.0 Market Analysis Summary 6 5.0 Strategy and Implementation Summary 6 5.1 Competitive Edge 6 5.2 Marketing Strategy 6 5.3 Sales Strategy 7 5.3.1 Sales Forecast 8 Table: Sales Forecast 8 Chart: Sales Monthly 8 Chart: Sales by Year 9 5.4 Milestones 9 Table: Milestones Error! Bookmark not defined. 6.0 Management Summary 10 6.1 Personnel Plan 10 Table: Personnel Error! Bookmark not defined. 7.0 Financial Plan 11 7.1 Important Assumptions 11 Table: General Assumptions 11 7.2 Break-even Analysis 12 Table: Break-even Analysis 12 Chart: Break-even Analysis Error! Bookmark not defined. 7.3 Projected Profit and Loss 13 Table: Profit and Loss 13 Chart: Profit Monthly 14 Chart: Profit Yearly 14 Chart: Gross Margin Monthly 15 Chart: Gross Margin Yearly 15 7.4 Projected Cash Flow 16 Table: Cash Flow 16 Chart: Cash 17 7.5 Projected Balance Sheet 18 Table: Balance Sheet 18 Table: Sales Forecast 1 Table: General Assumptions 3 Table: Profit and Loss 4 Table: Cash Flow 5 1.0 Executive Summary Introduction Fayetteville Salon is a hair salon that specializes in braids and hair extensions for African American women in Fayetteville, North Carolina. Other salons of this nature only provide the minimum services, whereas the upscale salons can be inconvenient due to scheduling...

Words: 4326 - Pages: 18

Premium Essay

Businss Plan Outline Example

...information provided by _______________ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _______________. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to _______________. Upon request, this document is to be immediately returned to _______________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities. 1.0 Executive Summary 1 Chart: Highlights 1 1.1 Objectives 1 1.2 Mission 1 1.3 Keys to Success 1 2.0 Company Summary 1 2.1 Company Ownership 1 2.2 Start-up Summary 2 Table: Start-up 2 Chart: Start-up 2 3.0 Services 3 4.0 Market Analysis Summary 3 4.1 Market Segmentation 3 Table: Market Analysis 3 Chart: Market Analysis (Pie) 3 4.2 Target Market Segment Strategy 3 4.3 Service Business Analysis 4 4.3.1 Competition and Buying Patterns 4 5.0 Strategy and Implementation Summary 4 5.1 Competitive Edge 4 5.2 Marketing Strategy 4 5.3 Sales Strategy 4 5.3.1 Sales Forecast 4 Table: Sales Forecast 4 Chart: Sales Monthly 5 Chart: Sales by Year 5 5.4 Milestones...

Words: 3131 - Pages: 13