The last step is creating cash flow statement so that you can see how your money moves and how much comes in and how much goes out and where it goes.
Plus the amount of your total income (Listing your Income), Total Expense (Your outgo) into the table show below to see your cash flow. Do you have positive cash flow – more coming in than going out – so that you can start investing in stock or are expense overpowering your income? Doing a cash flow statement isn’t just about finding money in your financial situation to fund your stock program. First and foremost, it’s about your financial well-being. Are you managing your finances well or not?
Looking at Your CashFlow
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Item |
Monthly $ Amount |
Yearly $ Amount |
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Total Income |
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Total outgo |
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Net inflow/outflow |
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Personal debt in expenses far exceeded whatever income they generated. That announcement is another reminder to watch your cash flow; keep your income growing and your expense and debt as low as possible.
Analyzing your Cash Flow
Use your cash flow statement to identify sources of funds for you investment program. The more you can increase your income and the more you can decrease your outgo, the better. Scrutinize your data. Where can you improve the result? Here are some question to ask yourself:
How can you increase your income? Do you have hobbies, interests, or skills that can generate extra cash for you?
Can you get more paid overtime at work? How about a promotion or a job change?
Where cna you cut expense?
Have you categorized your expense as either “necessary ” or “nonessential”?
Can you lower your debt payments by refinancing or consolidating loans and credit card balances?
Have you shopped around for lower insurance or telephone rates?
Have you analyzed your tax withholdings in your paycheck to make sure that you are not overpaying your taxes
Finding investment money in tax savings
According to the Tax Foundation, the average U.S. citizen pays more in taxes that in food, clothing and shelter combined. Sit down with your tax advisor and try to find ways to reduce your taxes. A home-base business for example is a great way to gain new income and increase your tax deductions, resulting in a lower tax burden. Your tax advisor can make recommendations that work for you.
One tax strategy to consider is doing your stock investing in a tax-sheltered account such as a traditional Individual Retirement Account (IRA) or a Roth Individual Retirement Account. Again check with your tax advisor for deductions and strategies available to you. For more on the tax implications of stockinvesting keep reading our article at http://www.stockpreacher.com
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