Don't tell me where your priorities are.

Show me where you spend your money and I'll tell you what they are.

-James W. Frick

Plan YOUR work! Work YOUR Plan!

Wednesday, January 11, 2012

Guest Post - Cashflow Plan or Budget?

Sanni KrugerSanni Kruger, of Holistic Money Manager, is a finance coach helping people to become competent and confident money managers who live within their means without stressful money concerns. She assists her clients in reducing their debts whilst building up savings, as well as clarifying their desired long term vision and learning how to expand their resources to reach it. Her self-help book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” is available from Sanni is also a motivational speaker with over 30 years experience of speaking to groups of any size on a variety of subjects.

Recently I was asked whether cashflow planning isn’t the same as budgeting.  My answer is an emphatic “no”, even though at first glance they look the same.  However, cashflow planning is slightly different.  It looks at our needs first, and then how we can meet them within our means.  Not at how much money we have and how we can meet our needs within that.  The difference is subtle – and huge at the same time.  Cashflow planning is more flexible and gives you a sense of prosperity, while budgeting usually gives you a sense restriction.

This is what a reader of my book “Making Friends with Money – How to start feeling wealthy without waiting till you’re rich” ( says about it: “Cashflow planning categories help me remember through the month what I need more money for – better than just keeping an eye on the balance in the D2D account going down. I can afford Waitrose all month – I decide where the money goes, not the money what I can afford.”

That’s it in a nutshell.  In my work I help my clients identify what their individual needs are, and also to prioritise them in a personal hierarchy of needs, which, incidentally, has very little to do with Maslow’s.  Rather I let my clients work out what matters most to them and what meeting those needs would look like at different levels from “survival” to “luxury”.

Then we work out together how that can be translated into numbers for a cashflow plan.  For instance, in a recent blog a wrote about Jim and Natalie who identified that they absolutely need to take a breather in the supermarket cafĂ© before heading home with their two small children after the weekly shop.  They know that this costs them about £30 per month, and they are finding ways to generate the cash.

I describe how to do this in practice in “Making Friends with Money”, and, of course, I’m available for one to one sessions to go through the process with you.

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