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Cash flow

How to Prioritise your spending

How to Prioritise your spending

Personal Income Spending Flowchart


As usual, before reading this post, please read our general advice disclaimer!

If you are like most people, you might be in a quandary on how to prioritise your income. For those who grew up in families that lived paycheck to paycheck, cashflow management was definitely not something taught at home, let alone at school!

When I sit down with my clients and ask them what they are aiming to achieve and what they expect from me, most think about investing in property, shares, super, discretionary trusts and tax planning among other things. While sound investing is an appropriate focus, it should not come at the cost of ignoring essential cash flow management.

For those in survival mode - they simply earn income and pay expenses. The only way to escape this cycle is to earn more and spend less. But earning more and spending less is not enough,  you must also engaged in the process of cash flow management.

Real cash flow management involves the understanding of where your money comes from and where it goes, and examining what choices are appropriate to create a life of greater satisfaction. Cash flow management is an active process.

This infographic is designed to help those people who need help in prioritising their spending. While procrastinating on Reddit a few weeks back, I saw a couple of magnificent posts by /u/beached69 and /u/atlasvoid. Inspired by their work, I created the Australian "How to Prioritise your Income Flow Chart.