Why Cash Flow Is The Most Overlooked Wealth-Building Strategy
🎧 Prefer to listen? Check out the audio version above! 🎧
Too often, financial advice boils down to “spend less” or “save more.”
But that advice means nothing if your current cash flow doesn’t support it—and no one’s helping you figure out how to get there.
I’m an optimist. I love using a “goals-based” financial planning software—it’s an amazing tool to show what’s needed to reach your ideal lifestyle. But here’s where I like to take things a step further: I dig into your real-life cash flow—what’s coming in, what’s going out—to make sure your plan is actually doable.
Most people can’t just flip a switch and start saving $25K more per year overnight. That’s not failure. That’s reality.
So instead of saying “good luck,” I help build a bridge.
And cash flow is what determines the shape, strength, and length of that bridge.
💡 What Cash Flow Planning Actually Looks Like
To build a plan that works for you—not against you—we need to understand the full picture:
1. What’s Coming In
Your gross salary is a starting point, but it’s your after-tax, after-deduction take-home pay that tells us what you really have to work with. Don’t just look at monthly—get to an annual total (especially if you get bonuses!).
2. What’s Going Out
You probably know your average monthly spend. But here’s what most people miss: Annual expenses. Car registrations. Holiday travel. Big gifts. Once-a-year credit card fees. These things can add up!
✨ Pro Tip: Whatever number you land on for expenses? Add 20%.
It creates a buffer and avoids forcing yourself into scarcity (if that’s not your style).
Don’t forget to include debt payments. I like to segment those out so we can clearly see what’s going toward debt repayment and interest, and how that impacts your broader plan.
3. What You’re Already Saving
Add up contributions to savings accounts, retirement plans (like 401(k)s or IRAs), and any investment accounts. Skip employer matches for now—just count what you are contributing.
✨ Pro Tip: To avoid double-counting, remember that your take-home pay already accounts for things like 401(k) deductions. That’s why I like to track savings separately—so we get a true picture of how all the pieces fit together.
4. What’s Left Over?
This is the magic number. It tells us whether we need to course-correct—or lean in harder.
🔁 Based on That Number, Here’s What Might Happen:
If You’re Cash Flow Negative:
You may need to pause investing, build up cash reserves, or pull back on spending temporarily. The key is doing this in a way that feels aligned, not restrictive.
(✨ This is where I help clients realign spending with their values—so changes feel intentional, not like punishment.)
If You’re Cash Flow Positive, but Want to Free Up More:
Let’s prioritize. Do you need to reshape your spending plan so more money flows toward your goals? Need to bulk up savings before hitting investments hard? Could low-interest debt be managed differently?
It’s all about strategy and sequence.
If You Have More Left Over Than You Thought:
Amazing! Now we get to talk strategy: where to allocate that surplus to maximize growth, minimize taxes, and accelerate your goals—based on your values, time horizon, and risk tolerance.
🧮 For Business Owners, the Equation Is the Same—With a Few More Levers to Pull
If you’re self-employed, we layer in extra data points:
Is your salary aligned with your personal financial needs?
Are your distributions consistent and goal-oriented?
Can you improve operating efficiency or increase profit margins?
Is your debt structure as effective as it could be?
Is it time to open a new revenue stream to close the gap?
(More on this next month—stay tuned!)
✨ The Bottom Line
Cash flow isn’t just a spreadsheet exercise. It’s the foundation of your financial freedom.
Yes, we want to stretch toward big goals. But we also need to honor where we’re starting from—so the plan isn’t just aspirational, it’s actionable.
If a financial plan is a bridge to the life you want, cash flow is the blueprint.
And if that blueprint doesn’t match the terrain, the bridge will never hold.
When your plan actually reflects your reality—when it aligns with your life—your money starts flowing with intention. And that’s when everything else becomes easier: saving, investing, spending, growing.
Your cash flow tells a powerful story—what’s yours saying right now?
Comment below if you want to explore it together or just need a place to think out loud.
🔜 Next Month…
Next month, we’ll dive deeper into how to align your business and personal finances—so your money is working toward one unified vision.
You’ll learn how to make smarter decisions across both sides of your financial life and finally feel like everything is pulling in the same direction.
