Do you know your personal cash flow? How much do you bring in each month and how much goes out? What happens to the rest, if any?

If you’ve spent the time getting organized, it will be a much easier task to look at your income and expenses. You’ll already have everything organized and filed neatly away, right? It may not be quite so simple for some, but it’s a step in the right direction.

Income is much easier to determine than expenses. How much is your paycheck? How much do you receive after taxes? It get’s a little more complicated if you start involving issues like Social Security, Pension payouts, or income distributions off portfolios, but you should be able to add up a fairly accurate number based off a few months information.

If you have a more variable income (seasonal, free lance, etc.), figuring out your income may not be an easy task.  All the more reason to get a firm grasp on your cash flow! Try looking at your annual income and averaging it per month or based on your seasonal work. If there’s been no change in employment, try looking at last year’s income for a good estimate.

Once you determine your income as close as you can, take a look at your expenses. This is much more tricky. Most people pay for expenses from many different accounts and in many different ways (checking accounts, credit cards, etc.).  First, list all of your fixed monthly expenses (mortgage, utilities, auto loans/leases, etc.).  Next review every account you have and pick out your normal monthly, more variable expenses off the statements (groceries, dining out, etc).

Scour all the accounts you may use to pay for expenses, including bank accounts and credit cards. Once you think you’ve covered all your bases, look again. Did you count your trip to the pet groomer every other month, or the $20 cash you withdrawal to fund your hobby a month? Try to be as thorough as possible so that you can get a realistic look at your cash flow.

Once you feel you’ve accounted for as much as you can, add it all up. If it’s more than you were expecting, you’re not alone—many people lose track of their spending, especially when it comes to credit cards.

Monthly vs. Annually

The simplest answer to figuring out your cash flow is to subtract your expenses from your income annually, but you can look at both the monthly and annual numbers.

If the number is positive, you have a surplus and are spending less than you earn. The question in this situation becomes what to do with the extra money. If it is negative, you have a deficit and are spending more than you earn. The question here would be how to cut back your spending so it is under your income. How to budget will be a topic for another day’s discussion.

Your annual number is what really counts here. Monthly cash flow numbers can vary due to changes in expenses and one time expenses. You can have both positive and negative monthly cash flow and still come out positive annually. However, it can still help to look at the numbers monthly. It may be able to show you where you could use some work.

This method can be used without aid, but if you’d like a program to help you sort it out, there are many to choose from, such as or However, be sure to do your research before choosing help to make sure you find the right fit for you.