The Art of Finance: A Single Source of Financial Truth

by Vinaya HS on January 16, 2012

in Finance

Thanks for visiting Capital Advisor. I frequently update this blog to cover various topics on personal finance such as investment strategies, financial products that you should buy and ones that you really should stay away from, financial calculators, emerging themes such as early retirement and financial independence, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

aof_e3

If I have to pick one strategy that’s helped me move up leaps and bounds with managing my personal finances, it’s got to be my single source of financial truth.

When combined with this really fundamental equation:

Each month —

Income

minus Annual Expenses EMI

minus Budgeted Expenses

minus Savings for Short-term Goals

minus Investments for Medium- to Long-term Goals

minus Non-budgeted Expenses

= My Free Cash Flow

for that month

you have at your disposal a strong framework for simply getting ahead with your personal finances.

On a side note, here’s what my sketching skills look like (for the same concept):

GEO_Blog_SST

I can’t draw if my life depended on it. But that’s a blessing in disguise because it actually helps avoid fighting over money issues.




Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.

{ 2 comments… read them below or add one }

Jayachandran April 11, 2012 at 2:04 PM

Hi,

You taught me a million dollar lesson for free .
I am in the middle of a financial mess/recovery and this is such a nice plan to control the monthly income .
Thanks

Vinaya HS April 11, 2012 at 8:36 PM

@Jayachandran –

Glad to be of help. :-) And good luck on your journey towards financial recovery.

Previous post:

Next post: