The Importance of Cash Flow Analysis and Planning, Part 1

October 17, 2019 | Christina Hapanowicz
Couple Planning Finances

Life certainly has a habit of throwing us all unexpected curveballs. While you can’t plan for all of the events in life to come, you can take precautions with your finances to help safeguard what and who matters to you. 

Analyzing your cash flow is an essential process that allows you to simultaneously gain a complete understanding of your current finances, and prepare for a sometimes unpredictable future. When you have a comprehensive understanding of where and how your assets come and go, you can better plan for the near and distant future. At H&A, we can help you use cash flow analysis to prepare for and weather economic storms as well as clear skies. Here’s a better look at what that all means. 

What exactly is cash flow analysis?

Cash flow analysis is the assessment and projection of your income, expenditures, and assets throughout your lifetime. You should take milestone events, goals, and aspirations into account alongside one-off expenses that you anticipate or have come to expect. It also helps in the process of making some strategic guestimations, such as investment returns or future rates of inflation.

This analysis helps to determine how likely you will be to fulfill your expenses each year based on your capital and income. The results of this analysis provide you with a picture of your current financial health and what you need to do to plan for and pursue the future you desire. 

What are the benefits of cash flow analysis?

Cash flow analysis will first take a look at how you’re spending. Some of that spending will be essential, of course, and some of it will be lifestyle-based. Separating the two enables you to identify areas where you could save more strategically or put your money to more efficient use. Cash flow analysis will show you how you can free up income or find ways to be more conservative in your spending. That way, you can put more towards savings and plan for a better financial future.

One of the main benefits of cash flow analysis is that it removes some of the uncertainty and guesswork regarding your future and how you approach your retirement planning. With detailed cash flow analysis, you’ll be able to see how a financial decision today can affect your future. It also highlights otherwise hidden problems or potential hazards and gives you time to plan for them accordingly.

Let the professionals help you with cash flow analysis.

Carrying out a cash flow analysis is incredibly useful, but it can also be incredibly complicated. Many people find enlisting the services of a financial professional incredibly helpful. A professional can help you get the most out of your analysis and help you implement the changes you need to make to grow and protect your assets and wealth.

We encourage you to consider the benefits of going through cash flow analysis with a professional team. At Hapanowicz and Associates, we believe your vision is our guidepost. That means we pair that with a comprehensive understanding of your finances, and giving you the best recommendations based on a reliable analysis so that you can better secure your future.  To learn more about cash flow analysis, any additional aspects of financial planning, or to get started, call our team at H&A at 412-261-5966 or feel free to email me directly, at chapanowicz@hapanowicz-associates.com


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