From the course: Recovering from a Financial Setback
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What is your cash flow and how to calculate it?
From the course: Recovering from a Financial Setback
What is your cash flow and how to calculate it?
- Understanding and managing cash flow is critically important to becoming financially stable, especially in a world that assumes that you get paid every two weeks, which for many people like contractors, gig workers, and freelancers, is simply not true, and remember, regardless of when you get paid, your bills still show up like clockwork. So cash flow is basically the difference between the money you earn every month and the money you spend every month. Think of it as inflow and outflow. The money that flows into your houses income and the money that flows out as expenses. Now let's see how you can calculate your monthly cash flow. In order to do this, you must add up all of your income from that month, and from that, subtract all of your expenses, but it's not as simple as that, so here's a few issues to be aware of. Sometimes you can see variance in your income, especially for contractors or alley workers and people…
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