Cash Flow Statement

Cash Flow Statement

Cash flow statement serves as a tool to help identify your current spending patterns. Having insight to your spending habits is a good starting point for predicting spending in retirement. Despite your initial reluctance to create a cash flow statement, this exercise is usually eye-opening! The cash flow statement is illustrated by a simple formula.

Cash inflows – cash outflows = Net Cash Flow

Cash Inflows

Cash inflows come from gross salaries (i.e., before taxes and payroll deductions) and from other sources – namely investments.


Paola Salary                                       $40,000

Anthony Salary                                 $85,000

Interest Income                                $3,500

Total Inflows                                         $128,500

Cash Outflows

Cash outflows of cash go to savings and investments and to various fixed and variable expenses: mortgage and other loan payments, taxes, and entertainment and living expenses.


Savings and Investments          $5,000

Fixed outflows

Mortgage                             $15,780

Insurance                             $1,500

Car Note                               $5,400

Total Fixed outflows                                        $27,680

Variable Outflows

Food                                        $10,200

Transportation                      $2,600

Medical/dental                      $3,600

Taxes                                       $14,500

Miscellaneous                        $9,000

Travel                                      $12,000

Total Variable outflows                                           $51,900

Net Cash Flow (or Deficit)

Cash inflow     $128,500

Cash outflow   $79,580

Net cash flow  $48,920

Cash Flow Statement

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Cash Flow Statement

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