• Ben Graham-Nellor

Smart.Happy.Money 3: Cash Flow, Cash Flow and More Cash Flow

Can I depersonalise you for a minute? Make you feel like less than a human being?

You're an entity. An entity that has the ability to make money.

Does it feel good? Not really, right?

But it is what we do. When we are born we are raised to learn, to enquire and eventually to focus on a career. That career will make us money and that money determines our place in society. It’s a little sad really.

Humans are complex creatures, in reality, you are more than just an entity. However, we live in a world in which money has been, and continues to be a necessity.

Money however should not be our goal. Our happiness and fulfillment should be. Money is a means to an end, but I digress from original point that, for the purpose of this blog post, you are an entity that makes money, just like a business does.

Some of you reading this will be business owners and like me you will track your income and expenses within your business because you need to know if you are making a profit. If you don’t make a profit, eventually you will fail. It seems strange to me that people don’t do this with their personal finances. Just like a business, you bring in income and you have expenses. Do you make a profit or are you slowly drifting into debt?

It’s time to start paying attention to your cash flow.

Imagine for a moment that you are a sports coach at the highest level, let’s say basketball. It’s halftime and you are on the court with your team holding a whiteboard. You are drawing all over it explaining where each of them should be, how they should move in order to reach their goal.

Cash flow works the same way. Your players are your dollars, you need to take control and direct them to where they need to be. They can’t just run around on the court doing whatever they want, or what somebody else is telling them to do, that’s not how you win the game.

There are many cash flow systems and strategies out there. From withdrawing cash and separating it into little envelopes each pay to complex and expensive software systems.

I like to keep things simple, I use the 50/20/30 rule.

50% of your net income goes to your living expenses. Rent, mortgage, food, petrol, etc

20% goes to your financial goals. Debt reduction (in excess of your minimum payments) or asset growth (that’s where things get exciting)

30% goes to your lifestyle choices. Eating out. subscriptions, clothes etc.

You can think of it as 3 buckets.

This is not a hard and fast rule. If you can get somewhere close to this, you are on the right path. When your circumstances change, let’s say you get a pay rise, put it in the 20% bucket.

What to do with the 20%? Well that’s a whole other blog post.

The basis of financial success is control of your cash flow, without this nothing else will come together.

Take control, you can do it and let’s get rich slow.


Ben Graham-Nellor

Ben Graham-Nellor is an advisor, coach, blogger and speaker who has worked in the financial services industry for over 15 years.

BGN Financial Management Pty Ltd is a Corporate Authorised Representative 468796 of Professional Investment Services Pty Ltd AFSL 234951 ABN 11 074 608 558 www.centrepointalliance.com.au

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smart.happy.money is a trading name of BGN Financial Management PTY LTD

Ben Graham-Nellor is a Sub Authorised Representative (291391) of BGN Financial Management PTY LTD (ABN 45 672 104 196) which is a corporate authorised representative (468796) of Professional Investment Services Pty Ltd (ABN 11 074 608 558) which is the holder of Australian Financial Services License No.234951.

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