Please help to answer the question 🙏🥺

Question

What is the importance of understanding cash inflows and outflows as you apply in your daily family expenses and income. How will it help you to save money? Share ways on how you can save money regularly.

Answer 1

Introduction:

Cashflow and Budget plays vital role in personal finance and also in company activities, that is when it comes to business which shows the cash performance that are taken place in day to day activities same like that some family also follows budgeting which will helps more in leading the family in good ways.

"If Cash Inflow exceeds Cash Outflow, the business is facing profit cashflow or positive cash flow. if it is opposite the business will have negative cashflow".

There are 3 types of cashflow:

1. CASH INFLOW
2. CASH OUTFLOW
3. NETRUAL CASH FLOW

1.CASH INFLOW:

Cash inflow means generation of fund in business or in family, cash which is getting inside as profit. one of the example of cash inflow is cash received from customer or loans.

2.CASH OUTFLOW:

Cash outflow happens in business mainly while purchasing goods for business which should record on the business reports. examples of cash outflow in business is rent, payroll, taxes etc.

3.NETRUAL CASHFLOW:

Neutral cash flow means that expenditure and income will be on same level. This situation happens when the company fails to maintain the savings amount.

Importance of cashflow

1. Helps to check the position of the company
2. Prevents from cash mismanagement
3. Helps to maintain savings in business/ in family

CASHFLOW IN FAMILY / BUDGETING:

Family budget is one of the backbone of your financial plan. By maintaining cashflow statement in family, will help the head member for leading family in right way.

1. Cash Inflow in family includes salary of a family member, business income if any, interest from saving, dividend share amount etc.
2. Cash Outflow in family includes day to day expenses, loan expenses etc.

Set Investment as your 3rd child:

here I would like to conclude my point that is for example, if you have 2 child then please consider investment as your 3rd child why because if your kids left you after they grownup. At that time, of your retirement period then trust me your 3rd child that is investment will never left you in your hard time. so that you can lead your life as your own. that's why I'm stressing my point that maintaining savings by investing your money on best plan will help you in future or in hard time. so investing your money is one of the best returns that everyone should maintain to lead a good lifestyle