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 —
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):
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.