1. Topic 5: Cash Flow Management
Net Worth Statement (Balance Sheet)
Assets
Liquid
Investments
Retirement
Education
Real Estate
Personal/Use
Liabilities
Short-term versus long-term
Personal versus business
Deductible versus non-deductible
Secured: has collateral such as home, car
Lower rates

2. Topic 5: Cash Flow Management
Income and expense statement
Income
Salary versus self-employed
Reinvested income: dividends
Data from income tax return
Expenses
Income and payroll taxes
Fixed (Dedicated)
Mortgage payment
Car payment
Student loan payment
Savings/investments: retirement, education, other
Discretionary
Food/entertainment/transportation
“Net Income”
Not what you make, it is what you keep
Savings strategies
Automatic
First, not what’s left over
Save raises

3. Topic 5: Cash Flow Management
Income and expense statement
Debt Management Ratios
Consumer debt < 20% take-home pay
Car loans, credit cards, etc.
Mortgage payments < 28% gross income
Monthly payments all debt < 36% gross income

4. Topic 5: Cash Flow Management
Budgeting
Motivate
Measure progress
Should be simple, flexible
Should be compared with actual results
Emergency Fund
3 – 6 months of expenses
Sources of liquidity
Lines of credit