Do you know how much money you make or know where all of your money goes? You may have a general idea, but it’s important to know how much money you make and how you spend that money with more specificity.

A cash flow analysis can help you track this information. This is a financial exercise that records your income and expenses over a period of time, and calculates whether you have more or less money at the end of that period. Understand that this isn’t a budget: a budget is a plan for your finances whereas a cash flow analysis is a snapshot of your finances.

If you’re interested in analyzing your cash flow, you can use our cash flow analysis worksheet as a guide. It has several income and expense categories listed, but don’t limit yourself to these if you feel they aren’t sufficient. In order to effectively complete the form, you’ll have to track all your expenses for a specific period of time (a month may be the best option since most bills are paid monthly). If you don’t use cash, you can review your credit card and bank statements to find the information you need. Otherwise, you can make a plan to start tracking your expenses at the beginning of the next month. Just remember to include every bit of money you spend, whether it’s a dollar at a vending machine or $1,000 for rent.

Tracking your cash flow will give you a better understanding of your finances. For example, it can tell you that you’re spending more money than you’re making. Or, it can make you more aware of how your expenses add up: picking up food at a drive-thru every now and then may not seem like much, but when you add all the money you spend at restaurants throughout the month, you may be surprised by how expensive your dining habits are.

Your budget can greatly benefit from tracking your cash flow, too. Fixed expenses are easy to account for in a budget, but it can be difficult to calculate just how much you should budget for variable costs like groceries and utilities. While it’s unlikely you’ll be able to predict the exact amount on these expenses for the future, a historical look at your spending can give you a better idea of how much you actually need to spend on these costs each month.

Tracking your expenses and reviewing your cash flow means never wondering where all your money is going, or if you’ll have enough money to meet all your expenses. It gives you a better understanding of your financial situation, which might be just what you need to make effective, positive changes in your financial life.

Covenant Trust Company is a financial services company owned by the Evangelical Covenant Church and its affiliates. Our services are available to anyone in need of asset management, retirement planning, legacy planning, gift planning, or trust services. In addition, we seek opportunities to encourage and promote healthy financial habits, and keep a personal finance blog at

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