Whether you are a business owner, self-employed, or working for someone else, managing your personal cash flow is critical.

The basic message is that you need to make sure that you earn more than you spend.

It is surprising how many people spend more than they earn and even more surprising how many people just don’t know they are in that position.

The starting point is to work out how much it costs you to live each year and compare that with how much you are drawing out of your business or earning from your employment income after income tax.

At HYD Advisory, we have developed some fairly basic personal cash flow models that can help you calculate whether you are living beyond your means or whether there is a “surplus” income available to work with.

If your current spending is too high we can then look at some smart strategies to get this situation under control.

Once you have created surplus income you now have something to work with. You can look at options , such as; accelerating paying off your home loan or start building an investment portfolio.