At one point or the other, you might have heard the term “Cash Planning”. If you haven’t, don’t worry. Continue reading.
What is cash planning?
Cash Planning is nothing but keeping your finances under control. It is the central point of finance functions. Throughout your life, you will have to maintain cash in a responsible manner.
What makes effective cash planning?
- Effective cash planning involves a pragmatic, conscious and encyclopedic review of both short term and long term goals
- Coherent procedures for the release of appropriations
Intent behind Cash Planning
Cash Planning is done in order to manage personal finance and business finances better. Individuals and corporate use cash planning to estimate their cash concerns. Cash planning ensures a budget is also kept and maintained.
What is a budget?
A budget is a financial plan for a defined period of time. It is the sum of money assigned for notable intent and how to attain financial goals.
A budget contains your income, expenses, savings, investments and financial goals charted together. Each month when you open your budget (you have to verify at least once every month) you will note down your savings and expenses for that month while aiming to increase your savings and investments and also looking to clear debt (if any).
Internally, be it a family or a corporate organisation, cash planning is done so as to keep an eye on cash inflows and outflows during a period of time and cash balances after a period of time.
Cash planning makes you set a goal or a couple of goals and work towards attaining them. You can estimate how much you earn, how much you spend, how much investment is necessary for you to achieve your financial goals within the set period and how much do you actually invest.
Who all can do cash planning?
Cash Planning can (and has to) be done irrespective of age, gender, etc. Especially if you earn income, this is all the more important for you. If you are retired, there is no harm n doing this and it’s actually good.
How do I start?
Easy peasy! Just sit down and note down all the following:-
- Your income
- Your expenses
- Your savings
- Your investments
- Amount of debt remaining (if any)
- Your financial goals well classified into short term, midterm and long term
Your short term goals consist of goals that can be completed within 3 years. Your midterm goals are goals that need 3 to 5 years in order to be completed. Your long term goals are goals that take more than 5 years for completion.
Once you complete these basic steps, you will have to find out how much to invest based on your income and the time frame of each goal. For information on this visit www.moneymindz.com or give a missed call to 022-62116588
For More Information Visit: