Simple Cash Flow Chart: Getting Started with a Budget

A cash flow chart is an important component of any personal finance system. I was never taught to budget, or if I was, it definitely didn’t stick when I was younger. It wasn’t until I was in college and kept over-drafting my checking account that I realized I needed to actively monitor my bank account, including what was going in and out at different times of the month. I developed a system that kept me from over-drafting my account that included an easy cash flow chart, but it wasn’t until after grad school that I learned how to use a budget in conjunction with my spreadsheet.

Why a Cash Flow Chart?

I have found that most personal finance advice encourages budgeting (and I do too!). However, I haven’t found many that advocate for tracking cash flow. Even when I was the director of a non-profit, we rarely looked at cash flow. Since most people receive their paychecks on a semi-monthly, monthly, or bi-weekly basis, cash flow can be an important factor. This is particularly true if you are living paycheck-to-paycheck, paying off debt, saving, or investing. Timing is important in finance, and monitoring cash flow is a quick and easy tool to help with it.

Below, I will share my easy cash flow spreadsheet as an example you can download. Read on to learn how I use it.

Creating My Easy Cash Flow Chart

As I mentioned, I was in college when I created this spreadsheet. I had racked up quite a bit of debt to my parents (all of which I paid back years later). It’s really embarrassing to admit, but I was NOT good with money when I was younger. I am still learning a lot, but this tool has been pivotal for me in making forward strides toward financial freedom.

Step 1: Income and Expenses

The first step to make your chart is to write down every bit of income you receive per month. Next to that, write the dates on which you receive the income on a regular basis. Next, write down every recurring expense that goes out of your bank account per month, and the dates on which they go out.

(Here’s a secret: You’ve just done the steps necessary to create a budget! Combine those items together by making the income positive numbers and the expenses negative numbers. You’ll see how much money you have leftover (or how much you are overspending) at the end of each month. Adjust these numbers how you see fit, and you now have a budget).

Step 2: Bank Account Balance

The second step is to find out how much cash you currently have in the bank. Just the balance number as of this moment. It’s that simple.

Step 3: Put it all together

Here’s where it gets a little bit tricky, but hopefully my downloadable example below will make it a breeze for you. You’ll want to start with a blank spreadsheet. Excel is an option, but I like to use Google Sheets. I like the auto-save feature of Google Sheets, and I can access it remotely from my phone or tablet.

Step 1

Put today’s bank account balance at the top as a positive number.

Step 2

Next, put your first upcoming income or expense. I say upcoming because you may be starting this at any point during the month, and that’s fine. If it is income, make it a positive number. If it is an expense, make it a negative number.

Step 3

Then, enter your next sequential income or expense item, and so on. Do this through the end of the month. Then, do a full month after that.

Step 4

Now, the purpose of this tool is to monitor what you have in the bank at any given moment. One way to do this would be to insert a total line between each item, but I think that’s overkill. Instead, I insert a line before each income line that totals everything above it. So scroll down from the top and find your first income line. Insert a blank line before it. In that cell add the following: =sum(first cell containing your balance, all the following cells up to this point)

Step 5

Next, find the next income line, and do the same, except this time put the following: =sum(the last cell you summed, all the following cells up to this point)

Step 6

Repeat this to the bottom.

Step 7

Now, the fun part (fun to me, but I’m a planning nerd). Copy and paste the entire month you created, excluding anything from this month. Copy and paste it over and over again below as many times as you want. I like to do about a year, and then go back and add the month next to it in a separate column.

Ta-da! You can now see how much money you will have left over in the future (or how much in debt you will be in the future) if you continue down this exact same path.

Here is your downloadable example spreadsheet:

How to Use Your Chart

Now that you have your cash flow chart, let’s put it to use. Here are all the ways I’ve found to use this tool:

1. Plan for tax season
2. Debt payoff
3. Travel planning
4. Project future income changes
5. Prepare for large purchases
6. Plan for gifts
7. Map out a savings plan
8. Adjust your budget (or create one)

Della