Regardless of how much money you earn, cash flow is the foundation upon which most of financial planning is built. Understanding what’s coming in and going out can help you determine what is available to fund various goals, including debt pay-down, college funding and retirement planning. That’s why nearly every CERTIFIED FINANCIAL PLANNER™ professional (CFP) will start a client relationship asking about how much money you spend today. If you don’t know, she may encourage you to create or adhere to some type of tracking system. Cash flow is probably the least sexy part of planning. In many ways, it’s like dieting and exercising because it relies on self-control and discipline. The best personal trainer can create an effective work out regime, customized to your body type, but she can’t force you to do the squats and dead lifts. Similarly, a nutritionist can design a diet plan that will help you manage your weight, but only if you stick to it.
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