When you get into financial planning, whether for yourself or someone else, it's easy to get caught up in the numbers. When you have a question like "should I pay off my mortgage early?" or "should I take Social Security at 70 or 65?)?", you've got your Monte Carlo simulations and straight-line projections to give you a nice, numerical answer.
It's clean and clear, but it's not the whole picture.
As you know by now, cash flow management is the first step and foundation to financial success. There are as many ways to manage cash flow as there are people in the world, from spreadsheets to "carrying it around in your head", but my personal favorite is a budgeting app called, directly enough, "You Need A Budget". What sets YNAB apart isn't just the stellar customer support or the ever-expanding feature set, but the cash flow management framework that underpins the whole thing. They call it the Four Rules, and it might be the single best cash flow management system out there. (And no, I have no association with YNAB. I think it's the best cash flow management system out there.)
If you ask an investment manager what the foundation of financial success is, they'll say it's a solid Investment Policy Statement. Ask an insurance agent, and they'll tell you that it's the right insurance policy. Ask a CPA, and they'll say that it's a good tax strategy. Ask a banker, and they might tell you that it's a goodsavings account or CD. And while all of these are very important, none of them are truly the foundation of financial success. No, that honor belongs to cash flow management.
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